Separate
financial
statements of
UBI Banca Spa
as at and for the year ended
31st December 2015
MANAGEMENT
REPORT
UBI Banca: key figures and performance
indicators1
31.12.2015
31.12.2014
31.12.2013
31.12.2012
31.12.2011
31.12.2010
31.12.2009
31.12.2008
Net loans to customers / total assets
30.9%
31.5%
34.1%
30.8%
22.1%
20.5%
19.8%
16.9%
Direct funding from customers/total liabilities
61.6%
58.8%
50.6%
42.7%
49.7%
49.1%
33.5%
32.2%
Net loans to customers/direct funding from customers
50.2%
53.5%
67.2%
72.1%
44.6%
41.8%
59.0%
52.4%
Equity (inclusive of profit/loss for the year) / total liabilities
12.4%
11.5%
12.5%
11.7%
10.7%
14.6%
16.8%
16.7%
1.4%
4.0%
0.8%
2.6%
4.2%
2.7%
3.8%
0.2%
STRUCTURAL INDICATORS
PROFIT INDICATORS
ROE
(Profit (loss) for the year/equity including profit (loss) for the year)
ROTE
(Profit/loss for the year/equity inclusive of profit/loss for the year net of
intangible assets)
ROA (Profit/loss for the year/ total assets)
1.4%
4.0%
0.8%
2.6%
4.2%
2.9%
4.0%
0.2%
0.17%
0.47%
0.10%
0.30%
0.45%
0.40%
0.64%
0.04%
The cost:income ratio (operating expenses/operating income)
59.8%
49.2%
47.9%
48.1%
96.9%
59.5%
39.4%
58.9%
Personnel expense/operating income
25.2%
22.3%
21.5%
19.5%
43.7%
28.1%
18.0%
24.8%
Dividends/operating income
37.1%
40.2%
34.7%
51.0%
135.2%
64.6%
78.0%
141.3%
Net result on financial activities/operating income
41.4%
25.9%
32.7%
37.3%
-2.1%
27.8%
17.9%
-30.1%
1.46%
1.36%
1.18%
1.01%
0.00%
0.00%
0.00%
0.01%
54.75%
55.08%
60.13%
61.25%
94.94%
94.82%
94.51%
85.44%
5.55%
5.49%
5.54%
2.29%
0.00%
0.00%
0.00%
0.01%
Tier 1 ratio
(Tier 1 capital after filters and deductions / Risk weighted assets)
35.87%
34.60%
50.36%
56.23%
59.23%
67.64%
67.04%
45.89%
Total capital ratio (Total own funds / Risk weighted assets)
42.16%
43.82%
71.22%
84.49%
85.62%
90.42%
95.15%
64.25%
9,725,315
10,509,912
13,707,454
14,194,716
12,972,683
13,713,202
14,285,982
13,655,979
RISK INDICATORS
Net bad loans (previously termed “non-performing loans”) / net loans to
customers
Impairment losses on bad loans (previously termed "non-performing") /
gross bad loans (coverage)
Net non-performing loans (previously termed "deteriorated" loans) /net
loans to customers
CAPITAL RATIOS Basel 3 from 31st March 20142
Total own funds (figures in thousands of euro)
of which: Tier 1 capital after filters and deductions
8,272,455
8,297,667
9,693,641
9,447,070
8,973,902
10,258,059
10,064,763
9,753,795
23,065,310
23,985,029
19,247,607
16,799,510
15,151,704
15,165,464
15,013,954
21,253,805
Profit (loss) for the year
123,423
(918,437)
71,340
223,496
(2,713,054)
283,720
406,317
23,886
Profit (loss) for the year before redundancy expenses and impairment
132,580
345,452
382,601
304,265
316,723
302,156
452,430
27,444
Profit (loss) for the year normalised
115,930
207,687
137,718
266,742
70,124
195,474
388,152
441,574
Operating income
672,508
687,772
713,096
664,554
262,202
465,070
708,460
640,100
(401,845)
(338,670)
(341,302)
(319,622)
(254,048)
(276,650)
(278,852)
(376,816)
21,901,390
23,330,321
25,168,913
22,584,747
15,692,663
14,536,121
12,560,060
10,446,768
319,461
317,590
295,805
227,442
280
277
272
849
Risk weighted assets
INCOME STATEMENT, BALANCE SHEET FIGURES (in thousands of
euro) STRUCTURAL DATA (numbers)
Operating expenses
Net loans and advances to customers
of which: net bad loans (previously termed non-performing loans)
net non-performing loans (previously termed deteriorated
loans)
Direct funding from customers
Equity (inclusive of profit/loss for the year)
Intangible assets
Total assets
Branches in Italy
1,214,834
1,280,777
1,393,606
516,918
280
277
272
849
43,622,826
43,610,938
37,435,005
31,302,960
35,223,005
34,790,516
21,277,596
19,942,079
8,758,946
8,566,696
9,231,816
8,607,721
7,609,829
10,328,266
10,662,230
10,358,682
410
410
410
410
448
542,792
545,893
596,756
70,767,330
74,171,865
73,914,645
73,336,254
70,895,253
70,897,601
63,450,192
61,983,318
4
4
4
3
2
2
2
2
1,730
1,675
1,588
1,412
1,250
1,380
1,405
1,566
1,612
1,579
1,569
1,393
1,212
1,349
1,451
1,509
Total personnel at the end of year (actual employees in service + w orkers on
agency leasing contracts)
Average total personnel (actual employees in service + w orkers on agency
leasing contracts) (*)
1. The indicators have been calculated using the reclassified figures contained in the section “Reclassified financial statements, reclassified income statement
net of the most significant non-recurring items and reconciliation schedules”.
Information on the share is given in the relative section of this Management Report.
The profit indicators for 2011 and 2014 were calculated on profit for the year before redundancy costs and impairment losses.
2. In the absence of any Additional Tier 1 capital for the years 2014 and 2015, the Tier 1 ratio is the same as the Common Equity Tier 1 ratio. The figures as at
31st December 2013 and as at 31st December 2012 were calculated according to AIRB Basel 2 rules and relate to the following ratios respectively: the Tier 1
ratio (Tier 1 capital/risk weighted assets); the Core Tier 1 ratio after specific deductions from the Tier 1 capital (Tier 1 capital net of preference shares and
savings or privileged shares held by non-controlling interests/risk weighted assets) and total capital ratio (regulatory capital + Tier 3)/risk weighted assets).
For previous periods the figures were calculated according to the Basel 2 standard rules.
(*) Part time employees have been calculated within total average staff numbers according to convention on a 50% basis.
2*
The organisational structure of UBI Banca
Unione di Banche Italiane became a joint stock company on 12th October 20151.
Listed on the Milan stock exchange, UBI Banca is the parent of the banking group of the same
name, which has a federal, multi-functional organisational model and a product range
diversified by market.
As the Parent of the Group, it performs the functions of strategic policy-making (formulating
the Group business strategy), of supervising business functions (by supporting and coordinating the commercial activities of the network banks and product companies), monitoring
risks and providing centralised services (either directly or through subsidiaries).
With regard to governance, UBI Banca employs a two tier system, with full respect for the
prerogatives and specific characteristics of the two corporate bodies which hold separate
responsibilities for supervision and management.
***
Changes were made in the second half of 2015 with a view to improving some areas of the
organisational structure of UBI Banca, which involved, amongst other things, the first tier in
the organisation chart.
Changes to organisational units reporting to the Chief Operating Officer and the Chief
Business Officer came into operation with effect from 7th October 2015 as follows:
• on the one hand, supervision in the commercial area was revised with particular reference
to activities arising from continuing developments in digital innovation. Consequently,
changes were made both to units and to the perimeters of the Direct Channels and
Communication Area with the creation of a new Multichannel Banking Area, which reports
directly to the Chief Business Officer;
• on the other hand it was decided to ensure greater efficacy and efficiency in communication
activities as a whole. With regard to external commercial communication, both conventional
and digital, the Communication Service was placed directly on the staff of the Chief
Business Officer, partly in view of the across-the-board nature of the activities carried out
for all customer segments.
As concerns internal communication, on the other hand, the unit responsible, previously
located in the Human Resources Area, was placed on the staff of the Chief Operating Officer
and at the same time it was renamed as the Company Multichannel Experience Area.
The new organisational structure of units under the Chief Risk Officer came into effect from 1st
November 2015.
The new configuration, considered advisable in view of international best practices and to
comply with supervisory provisions, has a new unit to supervise “data governance” activities in
order to ensure an efficient process to aggregate these and to manage the reference framework
for the production of reports. This unit has been placed directly on the staff of the Chief Risk
Officer and has been named Data Risk Management Service. The Risk Governance Service,
previously a staff unit, has been reallocated as a line function with the status of an area unit.
This action was accompanied by a renaming of all units in the English language in order to
bring them into line with the terminology adopted by European supervisory authorities.
Finally, on 1st February 2016 the organisation of the Compliance Area at the Parent was
revised with the creation of a Compliance Operations Service into which all the activities
1
The transformation from a co-operative company into a joint stock company took place in compliance with the provisions of Decree
Law No. 3/2015, converted into Law No. 33/2015 which made it compulsory for “popular” co-operative banks with assets of over €8
billion to comply with the new legal status within 18 months of the Bank of Italy implementation provisions coming into force (the
provisions were issued on 9th June and came into force on 27th June 2015).
Details of the steps which lead to the transformation are given in the section “Significant events that occurred in 2015” in the
consolidated management report, which may be consulted.
3*
previously carried out by the Compliance Sector at UBI.S were moved and that sector was
discontinued.
The new configuration – designed to comply with the update to the “UBI Group compliance
risk management policy” and with the revision of the compliance organisational model –
complies with supervisory regulations on internal controls which make it compulsory to assign
responsibility for IT compliance to the Compliance Function.
UBI Banca’s organisation chart is published on the corporate website www.ubibanca.it in the
corporate governance section.
4*
Organisation Chart of UBI Banca Spa
Management and Supervisory bodies
AREA
Service
Function
Areas, Services and Staff Functions
SUPERVISORY
BOARD
Operational Co-ordination Companies
SUPPORT TO THE
SUPERVISORY
BOARD
CHIEF AUDIT
EXECUTIVE
MANAGEMENT
BOARD
PROCESSES
AND RISK
AUDIT
GOVERNANCE AND
METHODOLOGIES
AUDIT
CHIEF EXECUTIVE
OFFICER
SALES
NETWORK
AUDIT
CHIEF FINANCIAL
OFFICER
CHIEF OF GENERAL
AFFAIRS AND
EQUITY
INVESTMENTS
Risk Governance
FINANCIAL,
OPERATIONAL AND
STRUCTURAL BALANCE
RISK CONTROL
Tax advice
and compliance
Financial Reports
CHIEF RISK
OFFICER
CREDIT RISK
CONTROL
Accounting policies and
controls and law 262
INVESTOR AND
MEDIA RELATIONS
COMPLIANCE
MONEY
LAUNDERING
AND CLAIMS
RISK CONTROL
CORPORATE AFFAIRS,
EQUITY INVESTMENTS AND
RELATIONS WITH
AUTHORITIES
LEGAL AFFAIRS
AND LITIGATION
STRATEGIC
PLANNING, ALM AND
STUDIES
MANAGEMENT
CONTROL
ADMINISTRATION
AND TAX
OBLIGATIONS
EXTRAORDINARY
OPERATIONS
GENERAL
MANAGER
Customer Care
CHIEF LENDING
OFFICER
Lending policies and
loan quality
CREDIT
CHIEF OPERATING
OFFICER
CHIEF BUSINESS
OFFICER
PROBLEM LOANS
AND CREDIT
RECOVERY
RETAIL
Distribution models, planning and
reporting
PRIVATE &
CORPORATE
MARKETS
FINANCE
Prevention and safety at
work
GLOBAL
DIRECT CHANNELS
AND
COMMUNICATION
TRANSACTIONS
AND
OPERATIONS
Corporate social responsibility activities come under the direct supervision of the Chief Financial Officer .
5*
ORGANISATION
HUMAN RESOURCES
COST
OPTIMISATION
UBISS
UBI ACADEMY
Introduction
Specific sections of the consolidated management report may be consulted for information on
the following aspects of UBI Banca operations in 2015:
-
MACROECONOMIC SCENARIO;
-
EUROPEAN BANKING UNION;
-
SIGNIFICANT EVENTS THAT OCCURRED DURING THE YEAR;
COMMERCIAL ACTIVITY, DIGITAL INNOVATION AND PAYMENT CARDS;
RESEARCH & DEVELOPMENT;
SOCIAL AND ENVIRONMENTAL RESPONSIBILITY
THE INTERNAL CONTROL SYSTEM;
TAX ASPECTS.
-
Human resources
As at 31st December Composition of UBI Banca personnel by "work force"
2015 employees on the
payroll of UBI Banca Number
31.12.2015
31.12.2014
Change
numbered 2,486, down
Employees on the payroll of UBI Banca
2,486
2,487
-1
by one compared with a
Staff on secondment at other Group companies
-1,213
-1,233
-20
year earlier. In detail,
of which: at UBI Systems e Services
791
820
-29
51 staff were appointed
Staff on secondment from other Group companies
457
421
36
Employees actually in service at UBI Banca
1,730
1,675
55
on permanent contracts
Total staff
1,730
1,675
55
and 31 on flexible
contracts
compared
with a total of 83 staff leaving (of which 46 in relation to the redundancy scheme under the
Framework Agreement of 26th November 2014, five transfers to other Group companies, three
due to the end of flexible contracts and the remainder for other reasons of “natural attrition”).
In terms of the staff actually employed by the Parent, at the end of the year the workforce
consisted of 1,730 staff, up over twelve months by 55 due primarily to the centralisation at
UBI Banca as a service provider of some of IW Bank’s activities (the most important were:
administration and tax, credit, anti money-laundering, legal and corporate affairs and
compliance) and the expansion of some specialist parts of the “Multichannel Banking”
commercial area and of “Banking compliance services”.
As shown in the table, at the end of 2015 employees on secondment from UBI Banca at other
Group companies had fallen to 1,213, 65.2% of whom were in service at UBI Sistemi e Servizi
(791 staff, down by 29 over the year, due primarily to the effect of 21 staff applying for the
voluntary redundancy scheme mentioned above).
At the same time an increase of 36 was recorded in staff seconded to the Parent from other
Group companies, due to the centralisation processes already mentioned.
In the fourth quarter employees actually in service grew by 39 (from 1,691 as at 30th
September to 1,730 at the end of the year) as a result of 33 appointments, 11 staff leaving and
a net increase of 17 staff on secondment at the Parent.
6*
In consideration of the Composition of personnel by management level
particular
operational
31.12.2015
nature of the Parent, the Number
composition of staff by
Senior managers
139
Middle managers 3rd and 4th level
542
rank continues to show a
Middle managers 1st and 2nd level
412
greater
percentage
of
3rd Professional Area (office staff)
635
higher ranking personnel
1st and 2nd Professional Area (other staff)
2
compared
with
the
Employees actually in service at UBI Banca
1,730
consolidated figure. No
substantial changes occurred compared with the end of the 2014.
%
31.12.2014
%
8.0%
31.4%
23.8%
36.7%
0.1%
136
532
382
622
3
8.1%
31.8%
22.8%
37.1%
0.2%
100.0%
1,675
100.0%
With regard to the provisions of the Framework Agreement of 26th November 2014, 11,176
days of extraordinary leave were granted in 2015, taken on the basis of the workload and
organisational requirements of individual units at the Parent (13 thousand days of
reduction/suspension of working hours in the 2014). For 2016, approximately 13.500 days of
extraordinary leave the will be granted on the basis of the applications received under the 21st
November 2015 Agreement.
As concerns the transformation of full-time employment contracts into part-time contracts,
nine applications were submitted, mainly with effect from February 2016. The agreement also
involved the extension of the duration of part-time contracts entered into in 2015.
As concerns, on the other hand, the Group Agreement of 23rd December 2015 regarding
redundancy applications, voluntary redundancies were agreed for 17 staff currently in service
at UBI Banca 1 with access to the sector “Income Support Fund”. They were selected from
among those who had made applications for redundancy under the 2014 Framework
Agreement and whose applications had then been rejected because they were surplus to the
goals set.
Further details on the two agreements are given in the section “Significant events occurring in 2015”
contained in the Consolidated Management Report.
The average age of employees on the UBI Banca payroll in December was 45 years and 10
months (compared with 45 years and 5 months in 2014), while the average length of service
was 17 years and 7 months (the comparative figure was 17 years and 3 months). The
percentage of female staff was 38.8%, up compared with the end of 2014 (38.2%).
***
Details of remuneration and incentive policies are given in the Remuneration Report in another part of
this document. It was prepared in accordance with articles 123-ter of the Consolidated Finance Act and
84-quater of the Issuers’ Regulations and also pursuant to “Supervisory Provisions on remuneration and
incentive policies and practices for banks and banking groups” issued on 18th November 2014.
Further information is given on the matter in the UBI Banca report on corporate governance, again in an
attachment to this document.
Finally, activities relating to trade union relations, training, internal communication, the workplace and
welfare initiatives are co-ordinated at Group level and details are given in the relative sections of the
Consolidated Management Report.
1
Voluntary redundancies for staff on the UBI Banca payroll numbered 55.
7*
Reclassified financial statements,
reclassified income statement net of the
most significant non-recurring items and
reconciliation schedules
Reclassified balance sheet
31.12.2015
31.12.2014
%
changes
Changes
Figures in thousands of euro
ASSETS
10.
Cash and cash equivalents
20.
Financial assets held for trading
138,226
160,330
-22,104
-13.8%
1,088,262
1,544,835
-456,573
-29.6%
30.
Financial assets designated at fair value
40.
Available-for-sale financial assets
50.
Held-to-maturity investments
3,494,547
3,576,951
-82,404
-2.3%
60.
Loans and advances to banks
15,489,215
14,055,649
1,433,566
10.2%
70.
Loans and advances to customers
21,901,390
23,330,321
-1,428,931
-6.1%
80.
Hedging derivatives
592,409
647,972
-55,563
-8.6%
90.
Fair value change in hedged financial assets (+/-)
4,637
5,583
-946
-16.9%
9,657,401
9,624,011
33,390
0.3%
615,661
634,178
-18,517
-2.9%
410
410
-
-
1,529,553
1,688,730
-159,177
-9.4%
2,032
507
1,525
300.8%
196,034
193,167
2,867
1.5%
15,357,571
18,066,883
-2,709,312
-15.0%
100.
Equity investments
110.
Property, plant and equipment
120.
Intangible assets
130.
Tax assets
140.
Non-current assets and disposal groups held for sale
150.
Other assets
699,982
642,338
57,644
9.0%
Tota l a sse ts
70,767,330
74,171,865
-3,404,535
-4.6%
15,845,354
19,140,417
-3,295,063
-17.2%
7,357,586
7,065,270
292,316
4.1%
36,265,240
36,545,668
-280,428
-0.8%
LIABILITIES AND EQUITY
10.
Due to banks
20.
Due to customers
30.
Debt securities issued
40.
Financial liabilities held for trading
608,600
722,181
-113,581
-15.7%
60.
Hedging derivatives
700,871
937,018
-236,147
-25.2%
80.
-24.6%
Tax liabilities
265,926
352,883
-86,957
100.
Other liabilities
881,275
751,071
130,204
17.3%
110.
Post-employment benefits
39,975
45,443
-5,468
-12.0%
120.
Provisions for risks and charges:
43,557
45,218
-1,661
-3.7%
1,035
1,144
-109
-9.5%
42,522
44,074
-1,552
-3.5%
8,635,523
9,485,133
-849,610
-9.0%
123,423
-918,437
1,041,860
n.s.
70,767,330
74,171,865
-3,404,535
-4.6%
a) pension and similar obligations
b) other provisions
130.+160.
+170.+
180.+190.
200.
Share capital, share premiums, reserves, valuation reserves and
treasury shares
Profit (loss) for the year
Tota l lia bilitie s a nd e quity
8*
Reclassified quarterly balance sheets
31.12.2015
30.9.2015
30.6.2015
31.3.2015
31.12.2014
30.9.2014
30.6.2014
31.3.2014
Figures in thousands of euro
ASSETS
10.
Cash and cash equivalents
20.
Financial assets held for trading
138,226
133,039
107,492
112,426
160,330
126,217
122,196
129,992
1,088,262
760,790
1,463,279
1,654,371
1,544,835
1,119,978
2,280,749
4,011,024
30.
Financial assets designated at fair value
40.
Available-for-sale financial assets
50.
Held-to-maturity investments
3,494,547
3,486,873
3,535,692
3,528,010
3,576,951
3,076,556
3,049,841
3,113,263
60.
Loans and advances to banks
15,489,215
16,343,837
15,026,560
15,073,014
14,055,649
13,841,245
15,450,016
14,460,750
70.
Loans and advances to customers
21,901,390
20,942,260
21,854,404
22,625,687
23,330,321
22,666,345
23,352,148
23,962,361
80.
Hedging derivatives
592,409
611,992
544,207
673,536
647,972
609,406
447,010
300,274
90.
Fair value change in hedged financial assets (+/-)
4,637
4,707
4,804
5,349
5,583
5,714
5,751
5,606
100.
Equity investments
9,657,401
9,656,107
9,625,683
9,624,090
9,624,011
10,576,618
10,625,008
10,708,381
110.
Property, plant and equipment
615,661
620,736
624,701
629,089
634,178
638,243
642,485
645,244
120.
Intangible assets
410
410
410
410
410
410
410
410
130.
Tax assets
1,529,553
1,497,100
1,536,122
1,623,234
1,688,730
1,549,868
1,538,252
1,684,885
140.
Non-current assets and disposal groups held for sale
2,032
2,036
2,036
3
507
82,063
82,063
2,329
150.
Other assets
699,982
552,551
745,198
639,077
642,338
525,106
721,697
699,446
Total assets
70,767,330
69,575,682
71,576,922
73,791,908
74,171,865
72,591,868
74,506,075
75,199,613
15,845,354
14,675,513
13,199,889
17,798,453
19,140,417
22,953,493
24,223,696
25,086,834
7,357,586
6,357,264
10,254,377
6,598,990
7,065,270
2,180,592
3,423,416
2,658,889
36,265,240
37,356,497
36,831,103
37,080,038
36,545,668
35,242,182
34,662,145
34,489,699
196,034
195,490
197,223
198,365
193,167
193,637
192,408
193,692
15,357,571
14,767,754
16,309,111
17,405,247
18,066,883
17,580,462
15,996,041
15,281,956
LIABILITIES AND EQUITY
10.
Due to banks
20.
Due to customers
30.
Debt securities issued
40.
Financial liabilities held for trading
608,600
614,788
754,027
844,803
722,181
675,565
600,017
1,513,524
60.
Hedging derivatives
700,871
820,178
736,087
1,163,274
937,018
752,063
573,317
462,440
80.
Tax liabilities
265,926
292,254
243,599
448,391
352,883
366,121
290,029
451,208
100.
Other liabilities
881,275
550,167
765,959
784,573
751,071
580,445
898,336
705,434
110.
Post-employment benefits
39,975
39,275
39,701
43,409
45,443
44,617
43,921
43,545
120.
Provisions for risks and charges:
43,557
57,229
56,092
45,666
45,218
45,550
49,554
60,828
a) pension and similar obligations
b) other provisions
130.+160.
+170.+
180.+190.
200.
Share capital, share premiums, reserves, valuation reserves and treasury
shares
Profit (loss) for the period
Total liabilities and equity
1,035
1,016
1,029
1,135
1,144
1,105
1,114
1,052
42,522
56,213
55,063
44,531
44,074
44,445
48,440
59,776
8,635,523
8,674,932
8,518,872
8,781,902
9,485,133
9,538,886
9,496,994
9,500,185
123,423
137,585
177,216
202,409
-918,437
212,354
244,650
227,027
70,767,330
69,575,682
71,576,922
73,791,908
74,171,865
72,591,868
74,506,075
75,199,613
9*
Reclassified income statement
Figures in thousands of euro
2015
2014
A
B
Changes
A-B
% changes
A/B
4th Quarter
2015 C
4th Quarter
2014 D
Changes
C-D
% changes
C/D
10.-20.
Net interest income (expense)
(13,593)
96,444
(110,037)
n.s.
(7,507)
25,062
(32,569)
70.
Dividends and similar income
249,430
276,489
(27,059)
(9.8%)
1,573
796
777
97.6%
48,979
24,255
24,724
101.9%
9,967
10,727
(760)
(7.1%)
278,605
178,153
100,452
56.4%
161,625
42,443
119,182
280.8%
109,087
112,431
(3,344)
(3.0%)
26,725
30,197
(3,472)
(11.5%)
40.-50.
Net fee and commission income
Net income from trading, hedging and disposal/repurchase activities and from
80.+90.
+100.+110. assets/liabilities designated at fair value
190.
Other net operating income/expense
Operating income
150.a
Staff costs
Other administrative expenses
Depreciation, amortisation and net impairment losses on property, plant and
170.+180. equipment and intangible assets
150.b
Operating expenses
Net operating income
130.a
Net impairment losses on loans
130.
b+c+d
Net impairment losses on other financial assets and liabilities
160.
210.+240.
n.s.
672,508
687,772
(15,264)
(2.2%)
192,383
109,225
83,158
(169,417)
(153,425)
15,992
10.4%
(44,866)
(36,793)
8,073
76.1%
(210,847)
(163,615)
47,232
28.9%
(90,358)
(47,302)
43,056
91.0%
21.9%
(21,581)
(21,630)
(49)
(0.2%)
(6,351)
(5,326)
1,025
19.2%
(401,845)
(338,670)
63,175
18.7%
(141,575)
(89,421)
52,154
58.3%
270,663
349,102
(78,439)
(22.5%)
50,808
19,804
31,004
(104,166)
(116,738)
(12,572)
(10.8%)
(28,278)
(32,699)
(4,421)
(13.5%)
156.6%
170.5%
(15,847)
(4,813)
11,034
229.3%
(8,282)
(3,062)
5,220
Net provisions for risks and charges
6,955
(311)
7,266
n.s.
21,825
(1,301)
23,126
n.s.
Profits from the disposal of equity investments
1,594
133,676
(132,082)
(98.8%)
1,340
134,153
(132,813)
(99.0%)
250.
Pre-tax profit (loss) from continuing operations
159,199
360,916
(201,717)
(55.9%)
37,413
116,895
(79,482)
(68.0%)
260.
Taxes on income for the period/year from continuing operations
(26,619)
(15,464)
11,155
72.1%
(42,710)
16,203
(58,913)
n.s.
Profit (loss) for the period/year before redundancies expenses and
impairment losses/reversals on Group equity investments
132,580
345,452
(212,872)
150.a
Redundancy expenses net of taxes
210.
Net impairment losses on Group equity investments net of taxes
290.
Profit (loss) for the period/year
(61.6%)
(5,297)
133,098
(138,395)
n.s.
(11,995)
(2,838)
(23.7%)
(8,865)
(11,995)
(3,130)
(26.1%)
-
(1,251,894)
(1,251,894)
(100.0%)
-
(1,251,894)
(1,251,894)
(100.0%)
123,423
(918,437)
n.s.
(14,162)
(1,130,791)
(1,116,629)
(98.7%)
(9,157)
10*
1,041,860
Quarterly reclassified income statements
2015
Figures in thousands of euro
4th Quarter
3rd Quarter
2014
2nd Quarter
1st Quarter
4th Quarter
3rd Quarter
2nd Quarter
1st Quarter
10.-20.
Net interest income (expense)
(7,507)
(13,178)
(3,211)
10,303
25,062
30,058
16,386
24,938
70.
Dividends and similar income
1,573
3,451
14,035
230,371
796
375
38,760
236,558
Net fee and commission income
9,967
12,665
13,507
12,840
10,727
9,636
3,491
401
40.-50.
80.+90. Net income from trading, hedging and disposal/repurchase activities and from
+100.+110. assets/liabilities designated at fair value
190.
150.a
Other net operating income/expense
51,072
42,443
8,520
69,470
57,720
27,108
27,441
30,197
28,626
25,944
27,664
192,383
51,249
96,849
332,027
109,225
77,215
154,051
347,281
(44,866)
(39,861)
(42,158)
(42,532)
(36,793)
(40,211)
(38,660)
(37,761)
(90,358)
(36,738)
(44,531)
(39,220)
(47,302)
(36,920)
(40,699)
(38,694)
(6,351)
(5,040)
(5,073)
(5,117)
(5,326)
(5,314)
(5,458)
(5,532)
(141,575)
(81,639)
(91,762)
(86,869)
(89,421)
(82,445)
(84,817)
(81,987)
Operating expenses
Net operating income
160.
45,410
27,813
Staff costs
Other administrative expenses
Depreciation, amortisation and net impairment losses on property, plant and
170.+180. equipment and intangible assets
130.b+c+d
20,498
26,725
Operating income
150.b
130.a
161,625
50,808
(30,390)
5,087
245,158
19,804
(5,230)
69,234
265,294
(28,278)
(19,641)
(28,418)
(27,829)
(32,699)
(31,172)
(27,221)
(25,646)
Net impairment losses on other financial assets and liabilities
(8,282)
(3,565)
(1,535)
(2,465)
(3,062)
(374)
(2,263)
886
Net provisions for risks and charges
21,825
(2,325)
(12,601)
56
(1,301)
124
1,868
(1,002)
1,340
256
12
(14)
134,153
103
334
(914)
Net impairment losses on loans
210.+240. Profits from the disposal of equity investments
250.
Pre-tax profit (loss) from continuing operations
260.
Taxes on income for the period from continuing operations
37,413
(55,665)
(37,455)
214,906
116,895
(36,549)
41,952
238,618
(42,710)
16,034
12,262
(12,205)
16,203
4,253
(24,329)
(11,591)
Profit (loss) for the period before redundancies expenses and
impairment losses/reversals on Group equity investments
(5,297)
(39,631)
(25,193)
202,701
133,098
(32,296)
17,623
227,027
150.a
Redundancy expenses net of taxes
(8,865)
-
-
(292)
(11,995)
-
-
-
210.
Net impairment losses on Group equity investments net of taxes
-
-
-
-
(1,251,894)
-
-
-
290.
Profit (loss) for the period
(14,162)
(39,631)
(25,193)
202,409
(1,130,791)
(32,296)
17,623
227,027
11*
Reclassified income statement net of the most significant
non-recurring items
2015
net of nonrecurring items
2014
net of nonrecurring items
Changes
%
changes
Figures in thousands of euro
Net interest income (expense)
(13,593)
96,444
(110,037)
n.s.
Dividends and similar income
249,430
276,489
(27,059)
(9.8%)
24,724
101.9%
Net fee and commission income
48,979
24,255
Net income from trading, hedging and disposal/repurchase activities
and from assets/liabilities designated at fair value
196,409
168,243
28,166
16.7%
Other net operating income/expense
109,087
112,431
(3,344)
(3.0%)
Operating income
590,312
677,862
(87,550)
(12.9%)
Staff costs
(169,417)
(153,425)
15,992
10.4%
Other administrative expenses
Depreciation, amortisation and net impairment losses on property,
plant and equipment and intangible assets
(179,405)
(163,615)
15,790
9.7%
(20,218)
(21,630)
(1,412)
(6.5%)
Operating expenses
(369,040)
(338,670)
30,370
9.0%
Net operating income
221,272
339,192
(117,920)
(34.8%)
(104,166)
(116,738)
(12,572)
(10.8%)
Net impairment losses on other financial assets and liabilities
(291)
(1,818)
(1,527)
(84.0%)
Net provisions for risks and charges
6,955
(311)
7,266
n.s.
Profits from the disposal of equity investments
1,594
381
1,213
318.4%
125,364
220,706
(95,342)
(43.2%)
(9,434)
(13,019)
(3,585)
(27.5%)
115,930
207,687
(91,757)
(44.2%)
Net impairment losses on loans
Pre-tax profit from continuing operations
Taxes on income for the year from continuing operations
Profit for the year
12*
Reclassified income statement net of the most significant non-recurring items: details
Non-recurring items
Impairment
losses on
equity
instruments,
bonds and
units of
UCITS (AFS)
2015
Figures in thousands of euro
Non-recurring items
Redundancy
expenses
Impairment
(pursuant to
Profit from the Extraordinary losses on
trade union
partial
contribution to property,
Conclusion
agreements
disposal of the
the
of tax
plant and
of 4th
investment
Resolution
litigation
equipment
February
ICBPI Spa
Fund
(owned
2015 and
properties)
23rd
December
2015
net of nonrecurring
items
2014
Impairment
Profit on the
losses and
Profit from
2014
Adjustment to
Redundancy
disposal of equity
recoveries in
the
Impairment net of nonthe disposal expenses (purs.
investmentsAviva
value on
disposal
losses on
recurring
price of BDG
to Framework
Vita, Aviva
shares,
of the
Group equity
items
Sa
Agreement 26th
Assicurazioni Vita
bonds and
interest in
investments
(Switzerland) November 2014)
and UBI
units in
SIA Spa
Assicurazioni
UCITS (AFS)
Net interest income (expense)
(13,593)
(13,593)
96,444
0
0
0
0
0
0
96,444
Dividends and similar income
249,430
249,430
276,489
0
0
0
0
0
0
276,489
48,979
48,979
24,255
0
0
0
0
0
0
24,255
Net fee and commission income
Net income from trading, hedging and disposal/repurchase activities and
from assets/liabilities designated at fair value
278,605
Other net operating income/expense
109,087
Operating income
672,508
Staff costs
(169,417)
Other administrative expenses
(210,847)
Depreciation, amortisation and net impairment losses on property, plant
and equipment and intangible assets
Operating expenses
Net operating income
Net impairment losses on loans
Net impairment losses on other financial assets and liabilities
(82,196)
-
-
(82,196)
-
-
-
31,442
(21,581)
1,363
(401,845)
-
-
-
31,442
1,363
-
270,663
-
-
(82,196)
31,442
1,363
-
(104,166)
(15,847)
15,556
196,409
178,153
0
0
0
(9,910)
0
0
168,243
109,087
112,431
0
0
0
0
0
0
112,431
590,312
687,772
-
-
-
(9,910)
-
-
677,862
(169,417)
(153,425)
0
0
0
0
0
0
(153,425)
(179,405)
(163,615)
0
0
0
0
0
0
(163,615)
(20,218)
(21,630)
0
0
0
0
0
0
(21,630)
(369,040)
(338,670)
-
-
-
-
-
-
(338,670)
221,272
349,102
-
-
-
(9,910)
-
-
339,192
(104,166)
(116,738)
0
0
0
0
0
0
(116,738)
(291)
(4,813)
2,995
0
0
0
0
0
(1,818)
Net provisions for risks and charges
6,955
6,955
(311)
0
0
0
0
0
0
(311)
Profits from the disposal of equity investments
1,594
1,594
133,676
0
891
0
0
(134,186)
0
381
Pre-tax profit from continuing operations
159,199
15,556
Taxes on income for the year from continuing operations
(26,619)
(4,175)
Profit for the year before redundancy expenses
132,580
11,381
Redundancy expenses net of taxes
Impairment losses on Group equity investments net of taxes
Profit (loss) for the year
(9,157)
-
-
(82,196)
31,442
1,363
-
125,364
360,916
2,995
891
-
(9,910)
(134,186)
-
220,706
6,406
(10,223)
(451)
25,628
(9,434)
(15,464)
(88)
0
0
688
1,845
0
(13,019)
(75,790)
21,219
912
25,628
115,930
345,452
2,907
891
-
(9,222)
(132,341)
-
207,687
-
(11,995)
0
-
11,995
-
-
-
-
-
(1,251,894)
-
-
-
-
0
1,251,894
-
115,930
(918,437)
2,907
891
11,995
(9,222)
(132,341)
1,251,894
207,687
9,157
123,423
11,381
9,157
(75,790)
21,219
912
13*
25,628
Reconciliation for the year ended 31st December 2015
Reclassifications
RECLASSIFIED INCOME STATEMENT
2015
Separate
mandatory
financial
statement
Item s
Figures in thousands of euro
2015
Depreciation
Redundancy
for leasehold
expenses
improvements
Tax
recoveries
Reclassified
financial
statement
10.-20.
Net interest income (expense)
(13,593)
(13,593)
70.
Dividends and similar income
249,430
249,430
48,979
48,979
40.-50.
Net fee and commission income
80.+90.+ Net income from trading, hedging and disposal/repurchase
100.+110. activities and from assets/liabilities designated at fair value
190.
278,605
Other net operating income/expense
Operating income
150.a
Staff costs
278,605
117,590
(8,630)
127
681,011
(8,630)
127
109,087
(183,099)
Other administrative expenses
Depreciation, amortisation and net impairment losses on
170.+180. property, plant and equipment and intangible assets
(219,477)
150.b
(210,847)
Net impairment losses on loans
130.
b+c+d
Net impairment losses on other financial assets and liabilities
(127)
(21,581)
(424,030)
8,630
(127)
13,682
256,981
-
-
13,682
Net operating income
130.a
672,508
(169,417)
8,630
(21,454)
Operating expenses
13,682
(401,845)
270,663
(104,166)
(104,166)
(15,847)
(15,847)
Net provisions for risks and charges
6,955
6,955
210.+240. Profits from the disposal of equity investments
1,594
160.
250.
Pre-tax profit from continuing operations
145,517
260.
Taxes on income for the year from continuing operations
(22,094)
Profit for the year before redundancy expenses
123,423
150.a
Redundancy expenses net of taxes
290.
Profit for the year
1,594
-
-
-
-
123,423
-
13,682
159,199
(4,525)
(26,619)
9,157
132,580
(9,157)
(9,157)
-
123,423
-
Reconciliation schedule for the year ended 31st December 2014
RECLASSIFIED INCOME STATEMENT
Ite ms
Figures in thousands of euro
10.-20.
70.
40.-50.
Net interest income
Dividends and similar income
Net fee and commission income
80.+90.+ Net income from trading, hedging and disposal/repurchase
100.+110. activities and from assets/liabilities designated at fair value
190.
Other net operating income/expense
Operating income
150.a
Staff costs
Other administrative expenses
Depreciation, amortisation and net impairment losses on property,
170.+180. plant and equipm ent and intangible assets
150.b
Operating expenses
Net operating income
130.a
Net impairment losses on loans
130.
b+c+d
Net impairment losses on other financial assets and liabilities
160.
Net provisions for risks and charges
210.+240. Profits (losses) from the disposal of equity investments
250.
Pre-tax profit (loss) from continuing operations
260.
Taxes on income for the year from continuing operations
Profit (loss) for the year before redundancy expenses and
impairment losses on Group equity investments
150.a
Redundancy expenses net of taxes
210.
Impairment losses on Group equity investments net of taxes
290.
Loss for the year
Reclassifications
2014
2014
Impairment
Separate
m andatory
financial
statem ent
Depreciation
losses on Redundancy
for leasehold
Group equity
expenses
improvements
Tax
recoveries
investments
Reclassified
financial
statem ent
96,444
96,444
276,489
276,489
24,255
24,255
178,153
178,153
120,159
(7,855)
127
695,500
(7,855)
127
112,431
-
(169,970)
(171,470)
-
687,772
16,545
(153,425)
7,855
(21,503)
(163,615)
(127)
(21,630)
(362,943)
7,855
(127)
-
16,545
332,557
-
-
-
16,545
(338,670)
349,102
(116,738)
(116,738)
(4,813)
(4,813)
(311)
(311)
(1,122,065)
(911,370)
1,255,741
-
-
(7,067)
(918,437)
-
-
1,255,741
16,545
360,916
(3,847)
(4,550)
(15,464)
1,251,894
(918,437)
14*
133,676
11,995
345,452
(11,995)
(11,995)
(1,251,894)
-
-
-
(1,251,894)
-
(918,437)
Notes to the financial statements
The mandatory financial statements have been prepared on the basis of Bank of Italy Circular No. 262 of 22nd
December 2005 and subsequent updates. Therefore, for the purposes of the preparation of these financial statements,
the provisions of the fourth update of that document issued on 15th December 2015 have been observed.
The following rules are 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 190 of the mandatory income statement (other net operating income) are reclassified as a
reduction in indirect taxes included within other administrative expenses;
-
the item net impairment losses on property, plant and equipment and intangible assets includes items 170 and 180 in the
mandatory financial statements and the instalments relating to the depreciation of costs incurred for improvements to leased
assets classified within item 190;
-
expenses for redundancy schemes (net of taxes) partially include item 150a in the mandatory financial statements;
net impairment losses on Group equity investments (net of taxes), present in the fourth quarter of 2014, include almost all of item
210 in the mandatory financial statements.
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 special 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
same basis.
In order to facilitate analysis of UBI Banca’s operating performance and in compliance with Consob Communication
No. DEM/6064293 of 28th July 2006, two special schedules have been included, the first a brief summary (which
provides a comparison of the normalised results for the period) 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 2015:
- impairment losses on equity instruments, bonds and units of UCITS (AFS)
redundancy expenses charged in relation to trade union agreements of 4th February
2015 and 23rd December 2015;
- profit from the partial disposal of the investment in Istituto Centrale delle Banche
Popolari Italiane;
- extraordinary contribution to the Resolution Fund;
- impairment losses on property, plant and equipment (owned properties);
- settlement of tax litigation.
-
Full year 2014:
- impairment losses and recoveries in value on shares, bonds and units in UCITS (AFS):
- adjustment to the price of the sale of Banque de Dépôts et de Gestion Sa (Switzerland);
- redundancy scheme expenses (purs. to Framework Agreement 26th November 2014)
- profit on the disposal of the investment in SIA Spa;
- profit on the disposal of interests held in Aviva Vita, Aviva Assicurazioni Vita and UBI
Assicurazioni;
- net impairment losses on Group equity investments (BBS, Carime, BPA, BRE, UBI
Banca International and UBI Leasing).
15*
The income statement
The income statement figures commented on are based on the reclassified financial statements (the income
statement, the quarterly income statements and the income statement net of the principal non-recurring
items – in brief and detailed versions) 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 over twelve months
(2015 compared with the year before) and those occurring in the last quarter of the year (this, which is
highlighted with a slightly different background colour, is compared with the previous quarter).
UBI Banca ended the year with a net profit of €123.4 million1, affected by a modest fall in
revenues (-€15.3 million), with less need for provisions, but above all by growth in operating
expenses as a result of the progressive entry into force of European supervisory provisions,
together with the intervention that the banking sector was called upon to make with the
payment of extraordinary contributions.
A loss of €918.4 million1 was incurred in 2014, arising from the recognition of impairment on equity investments held
in Group banks (€1,252 million) as part of periodic impairment tests on items on the accounts.
The quarterly performance recorded a net loss of €14.2 million, affected by tax charges
resulting from the settlement of litigation proceedings with the tax authorities, despite the
profit on ordinary activities, which was up 157% on the fourth quarter of 2014 that had
recorded a loss of €1,130.8 million, as a result of the impacts of the impairment test.
In quarterly terms, the result for the last three months of the year compares with a loss of
€39.6 million recorded in the third quarter of 2015, which incorporated weak revenues due to
the reduced contribution from finance activities and greater net interest income expense.
Over the full year, operating income – a measure of core banking operations2 – amounted to
€672.5 million, compared with €687.8 million in the comparative year due to the reasons
given later in this section.
Dividends received totalled €249.4
million, provided almost totally by
investments in Group companies,
€188.3 million of which came from
the network banks and €39.4 million
from the product companies.
The reduction compared with the
comparative year (-€27.1 million) is
the
result
of
network
bank
performance (-€21.2 million, due to the
presence in 2014 of both an extraordinary
distribution made by BRE and the distribution
of a dividend by Banca Carime, not distributed
insurance
business
in
2015),
performance (-€21.9 million, following,
amongst other things, the full/partial disposal
in December 2014 of investments which had
distributed substantial amounts), and also
Dividends and similar income
2015
Figures in thousands of euro
Banca Popolare di Bergamo Spa
Banca Regionale Europea Spa
2014
133,512
10,704
129,109
36,111
28,221
28,199
-
25,800
20,053
11,180
Banca Popolare di Ancona Spa
UBI Banca Private Investment Spa
7,467
5,492
4,146
3,837
Banco di Brescia Spa
Lombarda Vita Spa
8,411
8,598
3,151
14,083
UBI Factor Spa
Other equity investments (item 100)
5,722
4,221
20,831
Dividends received from item 100 equity investments
Dividends received from item 40 AFS
Dividends received from item 20 for trading and item 30
fair value options
240,547
5,829
268,301
5,985
3,054
2,203
Total
249,430
276,489
Banca Popolare Commercio e Industria Spa
UBI Pramerica SGR Spa
Banca Carime
1 Non-recurring items were recognised in both 2015 and the previous year. They recorded a positive balance of €7.5 million in 2015
(from the partial disposal of the interest held in ICBPI, offset by extraordinary contributions to the Resolution Fund, the settlement
of tax litigation, write-downs of financial instruments and redundancy expenses). The balance for 2014 was negative by €1,126
million (due to the impacts of impairment losses on Group investments, which were only marginally offset by profits on the disposal
of investments). Net of those items the results of the year came to €115.9 million compared with €207.7 million in 2014.
2 It is important to consider the role played by UBI Banca as a holding company. On the one hand it manages the cash flows of all Group
banks and companies for which it operates to guarantee the necessary funding and to enable them to invest surplus liquidity
accumulated, and on the other hand it acts as the single manager of the portfolio of financial assets. In consideration of its role as coordinator and policymaker, as a consequence of the organisational configuration of the Group, UBI Banca holds investments in all the
main consolidated companies and the profits that they distribute constitute its main source of income. This role has been progressively
accompanied by commercial activity in recent years: specialist lending resulting from the former Centrobanca business, as a credit card
issuer and as the manager of the residual non-captive mortgages and personal loans from former B@nca 24-7 operations.
16*
performance by other Group investments (-€0.2 million), while an increase was recorded by the
product companies (+€15.5 million the result of improved results by UBI Pramerica SGR and UBI Factor).
Dividends received from shares held in portfolio grew marginally to €8.9 million. The comparative
figure included €3.1 million distributed by the company SIA Spa (disposed of in the fourth quarter of 2014).
Net trading income
Incom e from
trading
(B)
Gains
(A)
Figures in thousands of euro
1. Financial assets held for trading
1.1 Debt ins trum ents
1.2 Equity ins trum ents
Net income
2015
Los s es from
trading
(D)
Los s es
(C)
2014
[(A+B)-(C+D)]
381
278
95
22,101
13,049
239
(2,336)
(1,286)
(997)
(3,787)
(2,158)
(5)
16,359
9,883
(668)
28,611
27,872
327
8
-
11
-
(53)
-
-
(34)
-
16
-
1.5 Other
2. Financial liabilities held for trading
2.1 Debt ins trum ents
-
8,802
1,473
1,473
-
(1,624)
(1,543)
(1,543)
7,178
(70)
(70)
396
9,657
9,657
2.2 Payables
2.3 Other
3. Other financial liabilities: exchange rate differences
4. Derivative instruments
4.1 Financial derivatives
-
-
-
-
X
161,550
161,550
X
243,183
243,183
X
(174,920)
(174,920)
X
(224,433)
(224,433)
433
9,180
9,180
770
(5,368)
(4,825)
157,239
432
229,410
3,695
(171,037)
(4)
(213,745)
(623)
1,867
3,500
(5,352)
(1,095)
1.3 Units in UCITS
1.4 Financing
- on deb t instruments and interest rates
- on equity instruments and share indices
- on currencies and gold
3,879
10,078
(3,879)
(10,065)
3,800
13
1,628
(6)
161,931
266,757
(177,256)
(229,763)
25,902
(543)
33,670
X
- other
4.2 Credit derivatives
Total
X
X
X
Net hedging income (loss)
2015
Figures in thousands of euro
Net hedging income (loss)
2014
11,078
(8,069)
Profit from disposal or repurchase
Profits
Figures in thousands of euro
Financial assets
1. Loans and advances to banks
2. Loans and advances to cus tom ers
3. Available-for-s ale financial as s ets
3.1 Debt instruments
3.2 Equity instruments
3.3 Units in UCITS
3.4 Financing
4. Held-to-m aturity inves tm ents
Total assets
Financial liabilities
1. Due to banks
2. Due to cus tom ers
3. Debt s ecurities is s ued
Total liabilities
Total
Net profit
2015
Los s es
2014
3,914
257,701
(8,164)
(599)
(4,250)
257,102
(9,324)
166,743
168,620
82,196
(575)
(7)
168,045
82,189
137,182
9,839
6,885
(17)
6,868
19,722
-
-
-
-
261,615
(8,763)
252,852
157,419
-
-
-
-
164
164
261,779
(15,747)
(15,747)
(24,510)
(15,583)
(15,583)
237,269
(7,940)
(7,940)
149,479
Net profit on financial assets and liabilities designated at fair value
2015
Figures in thousands of euro
Net profit on financial assets and liabilities designated at fair value
Net income from trading, hedging and disposal/repurchase activities and from assets/liabilities designated at
fair value
2014
4,356
3,073
278,605
178,153
The net result for financial activity rose to €278.6 million, an increase of over €100 million
compared with 2014, the result, amongst other things, of a non-recurring item, a profit (€82.2
million) on the partial disposal of the investment held in Istituto Centrale delle Banche
Popolari Italiane (see the section “Significant events that occurred in 2015” in the Consolidated
Management Report).
The composition of the item by individual portfolio and type of business is as follows:
17*

25.9 million (€33.7 million in 2014) was earned from trading composed as follows: +€9.8
million from debt instruments (related almost entirely to profits/losses from trading), +€2.8
million from equity instruments and above all from closing the relative derivatives contracts
(almost all listed on regulated markets and with equity indices as the underlying), +€11.4
million from business in foreign currency 3 ; +€1.9 million from derivatives on debt
instruments and interest rates (profits, gains and accruals). The latter relate to fair value
movements in the derivatives themselves (at the same time as medium to long-term swap
rates rose and as swap rates on shorter maturities fell) and to differentials accrued;

€11.1 million (-€8.1 million4) from hedging, – consisting of changes in the fair value of the
derivatives and the relative items hedged – relating primarily to the impacts of fair value
changes in derivatives on AFS securities (as the long-term swap rate curve rose in the
second quarter) and also due to fair value movements in bonds, which benefited from the
fall in the swap curve on shorter maturities in the fourth quarter;

€237.3 million (€149.5 million in 2014 5 ) from the disposal/repurchase of financial
assets/liabilities, of which +€82.2 million from the partial sale of the investment held in
ICBPI (non-recurring), +€165.2 million from the sale of Italian government securities, +€2.8
million from bonds (mainly issued by banks), +€6.9 million from the disposal of units in
UCITS (ETFs which aim to replicate the performance of the EURO STOXX® 50 Index), -€4.2
million from the disposal of bad loans (previously termed “non-performing loans”) and -15.6
million from the repurchase of outstanding securities as part of normal direct business with
customers in a context of bond prices above par;

€4.3 million (compared with €3.1 million before) from fair value movements in investments
in Tages Funds and in the private equity investments of the former Centrobanca. The
performance of the item also incorporated the exchange rate effect from a residual position
in hedge funds, while the fair value of these had a modest negative impact (-€0.2 million).
Other operating income and expense Other net operating income
came to €109.1 million (-€3.3 million
2015
2014
compared with the previous year), the Figures in thousands of euro
result of performance by prior year Other operating income
112,437
116,934
Recovery of expenses and other income on current accounts
2
2
income and expense.
9,187
10,136
Items
of
income
were
largely Recovery of other expenses
Recoveries of taxes
8,630
7,855
unchanged. Expense recoveries fell Rents and other income for property management
33,228
33,456
slightly and rental income from Income for services to Group member companies
65,334
64,797
4,686
8,543
property
management
remained Other income and prior year income
Reclassification of "tax recoveries"
(8,630)
(7,855)
stable, while prior year income
(3,350)
(4,503)
operating expenses
practically halved (-€3.9
million Other
Depreciation of leasehold improvements
(127)
(127)
mainly due to a penalty incurred as a Costs relating to finance lease contracts
(3,350)
(4,503)
consequence of the early repayment of Other expenses and prior year expense
a loan in the fourth quarter of 2014). Depreciation on improved leaseholds for rented assets
127
127
Prior year expenses also fell, although
Total
109,087
112,431
to a lesser extent (-€1.2 million), due
to the disappearance of an item present in 2014 relating to reimbursements paid to Prestitalia
customers (€2.4 million).
“Income for services rendered to Group companies,” – the largest component – rose to €65.3
million (+€0.5 million), in relation to the completion of the centralisation at the Parent of the
management and monitoring of network bank restructured counterparties that started in April
2014, even though some services reduced, and those connected with auditing in particular
(e.g. fewer days charged to Group companies for inspection activities), as well as due to the
disposal of a company in January 2015.
3 Since no speculative trading is carried out, the amounts shown in the table under line items 1.5, 3 and 4.1 must be interpreted
jointly, because they relate to the results of spot and forward currency trading carried out by the Parent on its own behalf or for
customers, balanced operationally on the market. The large fluctuations that occurred during the year and therefore the increase in
business with customers explain the increase in the result.
4 The amount originated mainly from fair value changes in derivatives on AFS securities, only partly offset by derivatives on bond
issues.
5 This was composed as follows: +€137.2 million from debt instruments (of which +€128.9 million from the sale of Italian government
securities); +€9.8 million from the disposal of equity instruments (of which €9.9 million from the sale of SIA Spa, non-recurring);
+€19.7 million from the disposal of UCITS units (ETFs); -€9.3 million from the disposal of non-performing positions (previously
termed deteriorated positions) (concentrated mainly in the fourth quarter); also -€7.9 million on the repurchase of debt securities in
issue.
18*
Net interest income6 became negative falling from +€96.4 million in 2014 to the current net
expense of -€13.6 million, mainly incorporating the impacts (never experienced before) of the
change in the structure of interest rates in the two periods7. In detail8:

the securities portfolio generated €285.2 million (€410.9 million in 2014), in the presence of
investments in debt securities which reduced in the twelve months by over €3 billion. The
smaller contribution from the AFS portfolio (€366.5 million compared with €408.7 million
before) was accompanied by reductions in the contribution from both the held-to-maturity
portfolio (€45.8 million compared with €97.7 million before, in relation to lower returns on the
reinvestments made at the end of 2014) and the trading portfolio (€2.6 million compared with
€22.3 million, after the progressive disposals made in the first three quarters of the year).
This business also incorporated the costs of uncovered short positions (down from €16
million to €2.2 million) and of partial hedges on fixed-rate bonds (the differentials paid on
derivatives were up from €101.9 million to €127.5 million);
Interest and similar income: composition
Debt
instrum ents
Figures in thousands of euro
1. Financial ass ets held for trading
2. Available-for-s ale financial assets
3. Held-to-m aturity inves tm ents
4. Loans and advances to banks
5. Loans and advances to custom ers
6. Financial ass ets designated at fair value
7. Hedging derivatives
8. Other ass ets
Total
Other
transactions
Financing
2015
2014
2,638
366,506
45,809
-
-
2,638
366,506
45,809
22,305
408,737
97,731
70,469
2,726
X
X
14,830
327,629
X
X
43,968
151
85,299
330,355
43,968
86,120
464,189
43,234
151
155
488,148
342,459
44,119
874,726
1,122,471
Interest and similar expense: composition
Borrowings
Securities
Other liabilities
2015
2014
Figures in thousands of euro
1. Due to central banks
2. Due to banks
3. Due to cus tom ers
4. Debt securities iss ued
(7,110)
(37,448)
(11,853)
X
5. Financial liabilities held for trading
6. Financial liabilities designated at fair value
7. Other liabilities and provisions
8. Hedging derivatives
(2,199)
X
X
Total
(58,610)
X
X
(829,393)
-
(7,110)
(37,448)
(11,853)
(829,393)
(19,846)
(78,973)
(20,143)
(890,745)
X
X
(829,393)
(316)
(316)
(2,199)
(316)
(888,319)
(15,959)
(361)
(1,026,027)
(13,593)
96,444
Net interest income (expense)

business on the interbank market, focused mainly on intragroup activities, generated a
positive balance of €40.7 million (a negative balance of €12.7 million in 2014). This
performance is explained both by (i) a fall in funding from banks (down €3.3 billion over
twelve months, of which €2.2 billion relating to ECB funds repaid, net of new allotments),
against lower growth in lending (+€1.4 billion), and by (ii) the drastic reduction in the interest
rate applied to principal refinancing operations down from 0.25% at the beginning of 2014 to
the current 0.05%;

business with customers generated interest expense of €339.4 million, (-€301.5 million in
2014), due to a reduction in interest income from financing (-€133.8 million, partly the result
6 Net interest income includes the financial expense that UBI Banca incurs against investments in Group subsidiaries, while the related
financial income is driven by the item dividends.
7 The one-month Euribor rate has been negative since March 2015, therefore the average over the twelve months of 2015
was -0.071%, compared with +0.135% in 2014.
8 The calculation of net balances was performed by allocating interest income and expense on hedging derivatives within the different areas
of business (financial, with banks, with customers).
The commentary given here reports the contribution to net interest income by area of business, although it must be considered that the
Parent’s operations continue to involve movements across different business areas (e.g. funding from customers or from the network banks
used for loans to the product companies).
19*
of a year-on-year decrease of €1.4 billion in the portfolio) and despite a fall in the cost of
funding (-€61.4 million for funding from securities and -€8.3 million for demand deposits),
while the relative total assets remained unchanged. Moreover, the net balance benefited from
the differentials received on hedges on bonds (€171.5 million, compared with €145.2 million
in the comparative twelve months).
Net fee and commission income almost doubled to €49 million, an improvement of €24.7
million, the result of growth in income components (+€9.9 million) and a reduction at the same
time in the expense (-€14.8 million).
Fee and commission income included increases not only in investment advisory services
(+€1.6 million), but above all in “other services” (+€7.2 million), which comprise returns on
financing (totalling €27.4 million net, an improvement of over €6 million) and on credit cards
(€15 million net, largely unchanged).
Expenses, on the other hand, saw increases in trading in financial instruments (+€2.4 million,
paid to institutional intermediaries for business in listed derivatives and securities on various
markets) and in other services (+€0.7 million consisting mainly of commissions paid to
network banks for the origination of financing that forms part of the former Centrobanca
business and commissions paid to a major interbank credit card network). This growth was
amply offset by the benefit received from the early redemption on 7th March and 7th August
2014 of government backed bonds, the cost of which – recognised within guarantees received –
had been €18.4 million in 2014.
Fee and commission income: composition
Figures in thousands of euro
a) guarantees granted
c) management, trading and advisory services:
Fee and commission expense: composition
2015
2014
Figures in thousands of euro
2015
2014
7,572
18,607
8,360
17,665
a) guarantees received
c) management and trading services:
(392)
(26,183)
(18,845)
(24,625)
1. trading in financial instruments
2. foreign exchange trading
3. portfolio management
9,342
229
-
9,667
961
-
1. trading in financial instruments
2. foreign exchange trading
3. portfolio management
(4,907)
(1)
-
(2,537)
(5)
-
4. custody and administration of securities
5. depository banking
1,198
-
999
-
(2,020)
-
(1,411)
-
6. placement of securities
7. receipt and transmission of orders
8. advisory activities
620
(1)
5,935
524
(1)
4,361
(19,255)
(3,279)
(14,579)
(20,672)
(2,958)
(12,791)
8.1 on investments
9. distribution of third party services
9.2. insurance products
5,935
1,284
301
4,361
1,154
426
(44,433)
(59,219)
9.3. other products
d) collection and payment services
983
18,925
728
18,107
i) current account administration
j) other services
21
48,287
22
39,320
93,412
83,474
48,979
24,255
Total
4. custody and administration of securities
5. placement of financial instruments
6. financial instruments, products and
services distributed through indirect networks
d) collection and payment services
e) other services
Total
Net fee and commission income
From a quarter-on-quarter viewpoint operating income of €192.4 million (€109.2 million in the
same three months of 2014) increased compared with €51.2 million recorded in the third
quarter, explained mainly by the profits realised on the disposal of AFS securities. In detail:
 dividends received in the October-December period fell to €1.6 million and came mainly
from a private equity investment (the €3.4 million received in the July-September period
related, on the other hand, to funds held in the AFS portfolio, €3.2 million of which came
from a Luxembourg UCITS);
 financial activities rose to €161.6 million, having benefited by €82.2 million from a nonrecurring item related to the partial disposal of ICBPI and by €85.6 million from the profit
realised from the sale of Italian government securities. In the last months of the year
trading generated a loss of €3.2 million (originating primarily from derivatives on debt
securities and interest rates, partly as a result of “unwinding” phenomena amounting to
€6.3 million in the period), which was more than offset by hedging and fair value
movements in FVO assets held in portfolio. The total result in the third quarter came to €20.5 million,
the aggregate result of disposals of Italian government securities amounting to €23.6 million and of profits on
trading of €4.2 million, which were held down by fair value movements in FVO assets, by the repurchase of own
financial liabilities and by the disposal of former Centrobanca bad loans (previously termed non-performing loans);
20*
Quarterly performance by financial activities
Figures in thousands of euro
2015
2014
4th Quarter 3rd Quarter 2nd Quarter 1st Quarter
4th Quarter 3rd Quarter 2nd Quarter 1st Quarter
Net trading incom e (los s )
(3,247)
Net hedging incom e (los s )
Financial assets
Financial liab ilities
4,202
5,781
19,166
(1,406)
(1,326)
9,777
26,625
3,893
828
8,927
(2,570)
(4,123)
(471)
(1,827)
(1,648)
165,496
20,017
33,834
33,505
49,195
10,609
64,194
33,421
(5,062)
(2,816)
(3,434)
(4,271)
(3,104)
(1,756)
(1,803)
(1,277)
160,434
17,201
30,400
29,234
46,091
8,853
62,391
32,144
Net incom e (los s ) on financial as s ets and
liabilities des ignated at fair value
545
(1,733)
302
5,242
1,881
1,464
(871)
599
Net income
161,625
20,498
45,410
51,072
42,443
8,520
69,470
57,720
Profit from dis pos al or repurchas e
 other operating expenses and income fell to €26.7 million from €27.8 million in the previous
three months, which reflects the varied and non-structural nature of the items of which
prior year income and expense are composed;
Quarterly net interest income
Figures in thousands of euro
Banking bus ines s with cus tom ers
2015
2014
4th Quarter 3rd Quarter 2nd Quarter 1st Quarter
4th Quarter 3rd Quarter 2nd Quarter 1st Quarter
(81,588)
(91,955)
(86,613)
(79,215)
(81,279)
(77,158)
(80,314)
Financial activities
62,825
67,754
73,787
80,836
97,370
105,777
104,736
102,984
Interbank bus ines s
11,201
11,092
9,689
8,759
8,922
1,530
(7,965)
(15,186)
Other item s
Net interest income (expense)
(62,767)
55
(69)
(74)
(77)
49
(91)
(71)
(93)
(7,507)
(13,178)
(3,211)
10,303
25,062
30,058
16,386
24,938
 the negative balance on net interest income reduced partially to €7.5 million, as a
consequence primarily of the trend for the contribution from business with customers,
which fell to -€81.6 million. The moderate decrease in interest income from financing (-€2.2
million) was accompanied by a much greater fall in interest expense on debt securities
issued (-€10.6 million; bonds with a nominal value of €3.5 billion matured in the last
quarter, €1.5 billion of which related to institutional issues) and also by an increase in the
differentials received on hedged liabilities (+€2 million, partly due to a reduction in the swap
rate curve on shorter term maturities). Other financial items which contribute to net
interest income performed as follows: €62.8 million from the securities portfolio (-€4.9
million compared with the previous three months) and €11.2 million from interbank
business (+€0.1 million);
Quarterly net fee and commission income
Figures in thousands of euro
Management, trading and advisory services
(net of the corres ponding expens e item s ):
trading in financial ins trum ents
foreign exchange trading
2015
2014
4th Quarter 3rd Quarter 2nd Quarter 1st Quarter
4th Quarter 3rd Quarter 2nd Quarter 1st Quarter
(3,512)
161
(3,500)
(312)
(828)
1,806
264
2,780
(2,422)
1,603
(2,078)
1,126
(2,746)
1,936
286
2,465
(11)
(83)
54
268
244
230
228
254
(270)
(82)
(265)
(205)
188
(38)
(384)
(178)
placem ent of s ecurities
3
260
157
200
402
96
2
24
receipt and trans m is s ion of orders
3
2
(3)
(3)
(4)
(2)
2
3
1,382
1,349
1,753
1,451
993
1,142
922
1,304
343
320
355
266
309
278
292
275
(5,123)
(4,954)
(4,685)
(4,493)
(6,157)
(4,910)
(5,744)
(3,861)
13,479
1,587
16,165
1,519
14,335
1,640
12,576
2,434
13,149
2,790
11,714
(1,094)
6,237
(3,850)
115
(8,331)
collection and paym ent s ervices
3,822
4,104
4,065
3,655
5,320
3,419
3,647
2,763
current account adm inis tration
other s ervices
5
8,065
6
10,536
5
8,625
5
6,482
5
5,034
6
9,383
7
6,433
4
5,679
9,967
12,665
13,507
12,840
10,727
9,636
3,491
401
cus tody and adm inis tration of s ecurities
advis ory activities
dis tribution of third party s ervices
financial ins trum ents , products and s ervices
dis tributed through indirect networks
Banking services
(net of the corres ponding expens e item s ):
guarantees
Net fee and commission income
21*
 net fee and commission income reached almost €10 million down €2.7 million due primarily
to banking services, while income from management, trading and advisory services
remained stable (although an increase was recorded within the item for the sale of financial
instruments through indirect networks consisting of credit cards and other products and
services provided by the network banks). As shown in the table, it was other services which
include commissions received (€1.5 million) for CPI policies on the early repayment of loans,
which set the overall trend for the item.
On the costs front, operating expenses totalled €401.8 million in the year, having
incorporated ordinary and extraordinary contributions paid to the Resolution Fund as well as
impairment losses on owned properties. If non-recurring items are excluded, expenses stood at
€369 million (+€30.4 million compared with €338.7 million in 2014), the aggregate result of
the following:

staff costs (shown net of Staff costs: composition
redundancy
expenses)
2015
2014
rose to €169.4 million
Figures in thousands of euro
with
growth
of
€16
(214,046)
(201,646)
million,
the
aggregate 1)a)Employees
Wages and salaries
(149,901)
(140,427)
result of different trends:
b) Social security charges
(39,923)
(37,650)
on one hand the dynamic
c) Post-employment benefits
(8,144)
(7,846)
d) Pension expense
for variable components of
e) Provision for post-employment benefits
(790)
(1,031)
remuneration
(the
f) Pensions and similar obligations:
(12)
(27)
incentive
scheme
and
- defined benefit
(12)
(27)
company
bonus)
and
g) Payments to external supplementary pension plans:
(6,789)
(6,378)
- defined contribution
(6,789)
(6,378)
ordinary growth in it
i) Other employee benefits
(8,487)
(8,287)
(which incorporated the
2) Other staff in service
(328)
(308)
impacts, although modest,
- Expenses for agency staff on staff leasing contracts
of the new national trade
- Other expenses
(328)
(308)
(6,502)
(6,388)
union agreement signed 3) Directors
by the parties to it on 8th 4) Expenses for retired staff
5) Recoveries of expenses for staff on secondment to other
July 2015); and on the companies
86,934
87,638
other hand growth in 6) Reimbursements of expenses for staff on secondment at
(35,475)
(32,721)
average staff numbers the Bank
Total
(169,417)
(153,425)
(+33). Notwithstanding the
redundancies under the November 2014 agreement, concentrated almost entirely in the
first months of 2015, average staff numbers of UBI Banca incorporated the impacts of the
progressive centralisation of activities in 2015 following the creation of the new IW Bank
and also due to the expansion of some specialist areas. These actions involved an increase
at the same time in expense refunds for staff on secondment at the Parent (+ €2.8 million).
The increase was also affected by the accounting effects of a release of provisions that
occurred in 2014;

other administrative expenses, considered net of €31.4 million of non-recurring items
recognised consisting of an extraordinary contribution to the Resolution Fund, increased to
€179.4 million (+€15.8 million).
While indirect taxation fell (-€0.7 million), current expenses increased by €16.5 million to
€172.3 million (even though rigorous monitoring action continued), €10.5 million of which
due to the extraordinary contribution paid to the Resolution Fund which, as with the
extraordinary part, was classified within the item membership fees.
The remaining expense payments mainly concerned the following: professional and advisory services
(+€4.7 million, attributable to legal and corporate affairs services, to digital innovation, to specific
commercial initiatives and to upgrades of the IT platform), membership fees (+€1.9 million, net of the
ordinary and extraordinary contributions already mentioned, these relate to the payment to the
Consob - Italian securities market authority - for increased volumes in issue and for the 2015 rise in
the membership rate, as well as to the ECB for the new supervisory contribution), outsourced services
(+€1.5 million for the costs of the October 2015 Ordinary Shareholders’ Meeting and for the new
payment card model launched in February 2014) and advertising expenses (+€1 million, for the recent
digital campaign targeted at the “Young”). On the other hand, decreases were recorded for credit
recovery expenses (-€1.2 million, in relation to external recovery firms used for the activities
of the former B@nca 24-7), postal services (-€0.9 million resulting both from the paperless
delivery of documents and the acquisition in 2015 of a new supplier) and telephone and
data transmission expenses (-€0.7 million);
22*

amortisation, depreciation and net
impairment losses on property,
plant
and
equipment
and
intangible assets of €20.2 million,
net of a non-recurring item
amounting to €1.4 million relating
to the impairment of owned
properties, recorded a fall of 6.5%.
In
quarterly
terms,
operating
expenses, net of the above-mentioned
non-recurring items which totalled
€32.8 million, stood at €108.8
million (€89.4 million in the fourth
quarter of 2014) compared with
€81.6 million in the July-September
2015 period. This increase of €27.1
million is a result of the following
performances:

staff costs grew to €44.9 million,
up €5 million, mainly due to the
provisions set aside for the
variable component of wages, but
also
due
to
internal
communication expenses (e.g. the
convention held in December);
Other administrative expenses: composition
2015
2014
Figures in thousands of euro
A. Other administrative expenses
Rent payable
Professional and advisory services
Rentals on hardware, software and other assets
Maintenance of hardware, software and other assets
Tenancy of premises
Property and equipment maintenance
Counting, transport and m anagement of valuables
Mem bership fees
Inform ation services and land registry searches
(203,707)
(7,584)
(28,583)
(155,774)
(7,197)
(23,907)
(3,257)
(3,668)
(530)
(506)
(7,039)
(2,757)
(7,131)
(3,239)
(8)
(10)
(47,489)
(511)
(3,613)
(773)
Books and periodicals
(415)
(349)
Postal
(587)
(1,459)
(4,267)
(4,285)
(4,110)
(3,249)
Insurance premiums
Advertising
Entertainm ent expenses
Telephone and data transm ission expenses
Services in outsourcing
Travel expenses
Fees for services provided by Group companies (UBI.S)
Credit recovery expenses
Forms, stationery and consumables
Transport and rem ovals
Security
Other expenses
(973)
(699)
(10,386)
(11,047)
(9,528)
(3,395)
(7,994)
(3,419)
(62,075)
(62,094)
(7,217)
(8,408)
(289)
(259)
(418)
(311)
(1,365)
(1,528)
(908)
(645)
(7,140)
(606)
(7,841)
(1,278)
Stamp duty
(7,262)
(6,844)
IMU/ICI (municipal property taxes)
(6,099)
(5,965)
Other taxes
Reclassification of "tax recoveries"
(1,803)
8,630
(210,847)
(1,609)
7,855
(163,615)
B. Indirect taxes
Indirect taxes and duties
Total

other administrative expenses rose
to €58.9 million (+€22.2 million). The increase was a result of the ordinary contribution to
the Resolution Fund (€10.5 million) as well as credit costs incurred for professional
services, for advertising, for outsourced services and for credit recovery, a reflection of both
some of the factors already mentioned above and also normal seasonal factors in the two
quarters. These changes were offset by a decrease in the fees paid for services provided by
the Group service company (-€3.7 million, as the end of year balance against the absorption
of excess processing capacity of an integrated software procedure);

depreciation, amortisation and net impairment losses on property, plant and equipment and
intangible assets, considered net of impairment losses on properties (€1.4 million) were
unchanged in the two quarters, remaining at €5 million.
As a result of the performance reported above, net operating income reached only €270.7
million, down compared with €349.1 million in 2014.
On a quarterly basis, operations in the fourth quarter generated net operating income of €50.8
million (€19.8 million in the same period of 2014), compared with a loss of €30.4 million
recorded in the July-September 2015 period.
The following were also recognised in the year:
•
€104.2 million (compared with €116.7 million in 2014) of net impairment losses on loans
relating to the retail and corporate portfolios of the merged banks. That amount consisted
of €137.7 million of net specific write-downs (which benefited from reversals – other than
for present value discounts – of €48.8 million) and €33.5 million of net reversals in the
performing portfolio. The latter, not only reflect a further reduction in volumes of lending,
but also incorporate releases of provisions (€10.5 million in the fourth quarter) relating to
the former B@nca 24-7 business following the adoption of measurement methods based on
internal ratings (PD - probability of default and LGD - loss given default), given the
normalisation of the position of the merged bank’s portfolio;
23*
Net impairment losses on loans: composition
Impairment losses/
reversals of impairment losses, net
Specific
Figures in thousands of euro
Loans and advances to banks
Loans and advances to customers
Total
Portfolio
Specific
-
-
-
-
-
-
33,534
(104,166)
(42,232)
13,954
(28,278)
(137,700)
33,534
(104,166)
(42,232)
13,954
(28,278)
Specific
Loans and advances to banks
Loans and advances to customers
Total
Portfolio
4th Quarter
2015
(137,700)
Impairment losses/
reversals of impairment losses, net
Figures in thousands of euro
Impairment losses/
reversals of impairment losses, net
2015
2014
Portfolio
Impairment losses/
reversals of impairment losses, net
Specific
Portfolio
4th Quarter
2014
(121,320)
4,582
(116,738)
(23,671)
(9,028)
(32,699)
(121,320)
4,582
(116,738)
(23,671)
(9,028)
(32,699)
•
€15.8 million of net impairment losses on other financial assets/liabilities (€4.8 million in
20149). The aggregate was affected by changes in (i) item 130b, of which -€15.5 million
(entirely non-recurring) consisting of impairment losses on instruments held in the AFS
portfolio, mainly subordinated bonds issued by banks in 2005 and 2006 (€13.6 million,
issued by Banca Popolare dell’Etruria and Banca Marche) and to a lesser extent impairment
losses on units in UCITS (€1.5 million) and equity instruments (€0.4 million) and in (ii) item
130d, a decrease of -€0.3 million due to net impairment losses on guarantees. The latter
amount included a reversal of the loss of a former Centrobanca position which had been
classified at the end of 2014 as a bad (previously termed “non-performing”) unsecured
guarantee and it was reclassified under loans and receivables in 2015. The relative
provision amounting to €1.7 million was therefore transferrede;
•
€6.9 million of net reversals of Net provisions for risks and charges
provisions for risks and charges
composed of the following: €1.1
2015
2014
Figures in thousands of euro
million of provisions made by the
(500)
former B@nca 24-7 (when it was Net provisions for revocation clawback risks
Net provisions for litigation
8,279
(335)
merged in the 2012) for possible
(1,324)
524
payouts in relation to loans granted, Other net provisions for risks and charges
Total
6,955
(311)
released following the disappearance
of this type of risk; approximately €10 million relating to the former Centrobanca, for legal
claims made, the grounds for which are now no longer valid10 . Furthermore, provisions
continued to be recognised within the item, made to meet possible claims of various nature
from a large variety of different counterparties;
•
€1.6 million of profits from the disposal of equity investments, of which €0.3 million relating
to the adjustment of the sales price of the former UBI Assicurazioni (now Cargeas
Assicurazioni), sold in December 2014 and €1.3 million relating to the remaining part of the
procedure for the voluntary liquidation of the Coralis Rent equity investment11.
The following items were recognised in the income statement in the fourth quarter of 2015:
 €28.3 million within item 130a net impairment losses on loans, lower than the €32.7 million
recognised in 2014, but more than the €19.6 million recorded in July-September 2015, the
9
The amount consisted of -€1.8 million of impairment losses on unsecured guarantees and of -€3 million (non-recurring) of net
impairment losses on securities and funds held in the AFS portfolio (-€1.2 million relating to impairment losses on units in UCITS,
-€2.7 million for net impairment losses on equity instruments and +€0.9 million for a reversal of impairment on a bond);
10 In 2014 the item was composed of €0.3 million of net provisions for revocation (clawback) actions, legal disputes and legal action
taken by different types of counterparty and also (approximately €2 million) for tax litigation, largely offset by the release of a
provision made in prior years amounting to €2.4 million, on conclusion of the relative litigation.
11 In 2014 the item amounted to €133.7 million and included the following: a profit of €134.2 million (non-recurring) realised on the
disposals of stakes held in insurance companies (€92.2 million for 30% of Aviva Vita, -€1.2 million for 30% of Aviva Assicurazioni
Vita and €43.2 million for the entire disposal of the 49.99% stake held in UBI Assicurazioni); a loss of €0.9 million (normalised) in
relation to the settlement of the sales price of the former Swiss subsidiary BDG; a net gain of €0.4 million, realised on the winding
up of Delaware companies that had been formed for the issuance of preference shares and for the disposal of investments primarily
of a property nature.
24*
result of the combined effect of greater specific write-downs (+€17 million) and greater
portfolio reversals (+ €8.3 million);
 €8.3 million of net impairment losses on other financial assets/liabilities, of which
approximately €5.8 million relating to impairment losses on AFS instruments (nonrecurring, of which €5.6 million relating to subordinated bonds issued by banks in 2005
and 2006 by the bank issuers already mentioned) and impairment losses on unsecured
guarantees of €2.5 million;
 €21.8 million of net releases of provisions for risks and charges, of which €11.8 million
relating to the reversal of the estimated amount to be paid to the Resolution Fund set aside
in September and €10 million relating to the former Centrobanca provision mentioned
above;
 €1.3 million of profits from the disposal of equity investments resulting from the liquidation
of the company Coralis Rent.
Over twelve months pre-tax profit from continuing operations came to €159.2 million,
compared with €360.9 million in 2014 (driven, amongst other things, by substantial gains
realised on the partial and total disposal of investments in insurance companies).
On a quarterly basis a profit of €37.4 million was realised in the fourth quarter (€116.9 million
in the same period of 2014), compared with a loss of €55.7 million in the previous three
months.
Taxes on income for the year from continuing operations amounted to €26.6 million, compared
with €15.5 million in 2014, and they include a non-recurring component of €25.6 million.
As part of activities to contain risks connected with contingent liabilities, including those of a
tax nature, UBI Banca reached a settlement agreement with the tax authorities on two lines of
litigation: the “preference shares” matter (the Group’s greatest contingent tax risk) and the
“branch switching” operations. The settlement agreement, stipulated on 4th February 2016,
involved the conclusion of all the litigation for all years already assessed and currently being
assessed, by means of the payment of taxes in an amount recalculated by the tax authorities
and of the related interest. The impact on the income statement was calculated, after the
deduction of provisions made from time to time in the accounts to cover the tax risk.
If the amounts are normalised – reflecting the composition and trend for the pre-tax result for
the year – taxation came to €9.4 million (taxation in 2014 was €13 million12).
This amount benefited from the almost full deductibility for IRAP (regional production tax)
purposes of permanent employee expenses, introduced from 2015 by article 1 paragraphs 2025 of Law No. 190/2014 (2015 Legge di stabilità – “stability” annual finance law).
Finally, the following redundancy expenses (€9.2 million net, €13.7 million gross, normalised)
were stated net of taxes under a separate item: €0.3 million net (€0.4 million gross) in the first
quarter as part of an agreement with trade unions signed on 4th February 2015 relating to the
merger of IW Bank into UBI Banca Private Investment (the amount was recognised by the
Parent because it related to staff on the payroll of UBI Banca “on secondment” at the
companies involved in the operation); €8.9 million net (€13.3 million gross) in the fourth
quarter as part of a trade union agreement signed on 23rd December 2015. The amount relates
to 55 employees on the payroll, 17 of whom in service at the Parent and 38 on secondment at
other Group companies.
In the previous year, the following non-recurring expenses were stated, again under separate items, shown net of
taxes (all recognised in the fourth quarter):


€12 million (€16.5 million gross) of redundancy expenses in relation to the signing of a Framework Agreement with
trade unions on 26th November 2014. The amount related to employees on the payroll, inclusive of those on
secondment at other Group companies, for a total of 50 positions;
€1,251.9 million (€1,255.7 million gross) of net impairment losses on Group equity investments, triggered by
periodic impairment tests conducted at the end of the year, which resulted in decreases in the book value of Banca
Carime (€521.5 million), BRE (€270.6 million), Banco Brescia (€257.3 million), BPA (€90.6 million), UBI Leasing
(€78.7 million) and UBI Banca International (€33.2 million).
12 In the second quarter of 2014 non-recurring items included an expense of €17.9 million due to an adjustment to IRAP deferred tax
assets already recognised in the financial statements for the year ended 31st December 2013, resulting from a reduction in the
IRAP tax rate from 4.65% to 4.20% (the 0.92% surtax was unchanged) introduced by Decree Law No. 66/2014 with effect from the
financial year 2014. That item has no longer been recognised due to the provisions of paragraph 23 of article 1 of the 2015 Legge di
stabilità (“stability law” – annual finance law), which has retroactively repealed the provisions of article 2 of Decree Law No.
66/2014 on the reduction of the IRAP rate, therefore restoring the previous rates effective immediately from 2014 (a base rate of
4.65% for banks plus surtaxes).
25*
General banking business
Funding
The direct funding from customers of UBI Banca amounted to €43.6 billion as at 31st
December 2015, unchanged year-on-year.
Direct funding from customers
31.12.2015
%
31.12.2014
Changes
%
amount
Figures in tho usands o f euro
Current accounts and deposits
850,206
1.9%
1,032,687
2.4%
-182,481
-
-
-
-
-
-
6,496,627
14.9%
6,006,451
13.7%
490,176
8.2%
Term deposits
Financing
- repurchase agreements
of which: repos with the CCG
- other
Other payables
Total amounts due to customers (item 20 liabilities)
Bonds
- b onds sub scrib ed b y institutional customers
of which: EMTNs (*)
Covered b onds
- b onds sub scrib ed b y ordinary customers
of which: non-captive customers (former Centrob anca)
- b onds sub scrib ed b y Group b anks (intragroup)
Other certificates
Total debt securities issued (item 30 liabilities)
Total funding from customers
%
-17.7%
6,107,667
14.0%
5,531,586
12.6%
576,081
10.4%
6,107,667
14.0%
5,531,586
12.6%
576,081
10.4%
388,960
0.9%
474,865
1.1%
-85,905
-18.1%
10,753
0.1%
26,132
0.1%
-15,379
-58.9%
7,357,586
16.9%
7,065,270
16.2%
292,316
4.1%
36,250,054
83.1%
36,514,980
83.7%
-264,926
-0.7%
12,444,968
28.5%
12,968,784
29.7%
-523,816
-4.0%
2,539,326
5.8%
3,123,932
7.2%
-584,606
-18.7%
9,905,642
22.7%
9,844,852
22.5%
60,790
0.6%
20,851,481
47.8%
21,219,512
48.7%
-368,031
-1.7%
2,771,202
6.4%
3,289,203
7.5%
-518,001
-15.7%
2,953,605
6.8%
2,326,684
5.3%
626,921
26.9%
15,186
0.0%
30,688
0.1%
-15,502
-50.5%
36,265,240
83.1%
36,545,668
83.8%
-280,428
-0.8%
43,622,826
100.0%
43,610,938
100.0%
11,888
0.0%
2,851,838
6.5%
3,583,881
8.2%
-732,043
-20.4%
2,851,838
6.5%
3,583,881
8.2%
-732,043
-20.4%
of which:
sub ordinated liab ilities
of which: sub ordinated securities
(*) The corresponding nominal amounts were €2,464 million as at 31st December 2015 and €3,046 million as at 31st December 2014.
The details reported in the tables show €7.3 billion of amounts due to customers (€7.1 billion
at the end of 2014), composed as follows:
 €6.1 billion of repurchase agreements with the Cassa di Compensazione e Garanzia (a
central counterparty clearing house), an increase of €0.6 billion. The use of this flexible
short-term funding instrument was calibrated over 12 months on the basis of developments
in the Group’s liquidity requirements, with account taken of the dimension of the securities
portfolio, which reduced during the year, and the level of debt with the ECB (€8.1 billion at
the end of the period compared with €10.3 billion outstanding in December 2014);
 €850 million of current account deposits, down by €182.5 million, due to a reduction in
deposits on intragroup accounts held by Prestitalia (-€350 million), only partially offset by
greater liquidity on accounts held by institutional counterparties outside the Group;
 finally, the item financing – other, amounting to €389 million (€475 million at the end of
2014) contains almost all the funds made available by the Cassa Deposito e Prestiti (CDP –
a state controlled fund and deposit institution) as part of anti-crisis initiatives and support
for small to medium-sized businesses.
Debt securities issued amounted to €36.3 billion (€36.5 billion at the end of 2014), of which
€12.4 billion consisted of institutional funding as follows:
26*

€2.5 billion of EMTNs issued as part of a programme for a maximum issuance of €15
billion.
Marginal issuances were made over the 12 months in the form of “private placements” totalling €388
million nominal (all in the fourth quarter) against maturities and repurchases totalling €970 million
nominal, also concentrated in the last period of the year;

€9.9 billion of covered bonds, unchanged compared with 2014.
A placement for €750 million nominal was carried out in October 2015, partially offset, again in
October, by the maturity of an issue for €500 million nominal and by amortisation instalments,
during the year, on two “amortising” bonds amounting to €50.5 million. The total outstanding also
incorporates the effects of accounting adjustments on the securities.
UBI Banca had eleven covered bonds in issue at the end of the year under the first “multioriginator”
programme backed by residential mortgages with a €15 billion ceiling for a nominal amount of €9.3
billion (net of amortisation instalments totalling €185.7 million)1, against a segregated portfolio which
stood at €14.5 billion2.
A second programme, again “multioriginator”, is also operational with a ceiling of €5 billion, backed
by commercial mortgages and by residential mortgages not used in the first programme (a segregated
portfolio of approximately €3.2 billion at the end of period). So far this programme has only been used
for self-retained issuances3.
Funding from bonds issued to ordinary customers – consisting mostly of bonds sold to network
bank customers, the issuance of which has been centralised at the Parent since 2013,
amounted to approximately €20.9 billion (-€0.4 billion), composed as follows:

€18.1 billion (€17.9 billion at the end of 2014) of bonds issued by the Parent: issuances for €4 billion
nominal were carried out over the twelve months almost totally offset by maturities of €3.4 billion
nominal and by repurchases for €462 million nominal. Placement activity slowed during the year caused
by record low yields (in a context of negative interbank interest rates and returns on short to mediumterm government securities that are practically zero or negative), which made this type of investment for
financial liquidity less attractive to customers;

€2.8 billion of the remaining outstanding bonds issued by the former Centrobanca which recorded a
decrease of €0.5 billion following maturities for €501 million nominal (€422 million of which
concentrated in the fourth quarter) and repurchases amounting to approximately €4 million nominal.
Intragroup bond funding, consisting of debt subscribed by banks or companies in the Group in
order to invest their liquidity, reached a total of approximately €3 billion, up €627 million as a
result of new issuances for €750 million nominal and maturities for €123 million nominal.
Finally, the trend for subordinated liabilities, which fell during the year from €3.6 billion to
approximately €2.9 billion, was attributable to the recognition of amortisation instalments on
some securities accounting for -€0.6 billion (eight of the twelve subordinated bonds
outstanding are redeemed by means of amortisation on a straight-line basis) and to the
maturity of an issue in the last quarter of the year accounting for -€0.1 billion.
***
The table below summarises maturities for bonds in issue at the end of the year.
Outstanding bond maturities as at 31st December 2015 (excluding intragroup securities)
1st Quarter 2nd Quarter 3rd Quarter 4th Quarter
2016
2016
2016
2016
Nominal amounts in millions of euro
Bonds ordinary cus tom ers
Bonds institutional cus tom ers
3,172
850
1,834
25
1,198
1,000
2,070
175
2017
2018
2019
3,477
2,089
4,225
202
4,245
2,051
Subsequent
years
448
5,386
Total
20,669
11,777
of which: EMTNs
100
-
-
150
1,038
151
1,000
25
2,464
Covered b onds
750
25
1,000
25
1,051
51
1,051
5,361
9,313
4,022
1,859
2,198
2,245
5,566
4,427
6,296
5,834
32,446
Total
1 A list is given in Part E, Section 1 of the Notes to the Financial Statements. Two self-retained issuances for €1.2 billion nominal also
existed under that same programme as at 31st December 2015, an issuance for €0.7 billion nominal carried out in March 2014 and
second for €0.5 billion in December 2015. Two issues totalling €1.7 billion nominal were cancelled during the year. Because these were
repurchased by UBI Banca, these liabilities have not been recognised, in accordance with IFRS.
2 Detailed information on the composition of the segregated portfolio of residential mortgages held by UBI Finance is given in the
consolidated management report on operations, which may be consulted.
3 Two issuances in 2012 for a total of €1.4 billion nominal (net of the amortisation instalments falling due in the meantime), a €0.2
billion issuance in March 2014 and a fourth issuance for €0.65 billion nominal completed in July 2015. Because these were
repurchased by UBI Banca, these liabilities have not been recognised, in accordance with IFRS. Information on the composition of
the segregated portfolio held by UBI Finance CB 2 is reported in the consolidated management report on operations, which may be
consulted.
27*
Lending
Performance of the loan portfolio
Composition of loans to customers
31.12.2015
of which nonperforming*
%
Figures in tho usands o f euro
Current account overdrafts
Reverse repurchase agreements
Mortgage loans and other medium to longterm financing
Credit cards, personal loans and salarybacked loans
Factoring
Other transactions
Debt instruments
of which: structured securities
other deb t instruments
Total loans and advances to customers
of which: intragroup
to counterparties external to the Group
31.12.2014
%
of which nonperforming*
Changes
amount
%
833,582
3.8%
464
1,026,327
4.4%
674
-192,745
-18.8%
1,169,090
5.3%
-
1,253,175
5.4%
-
-84,085
-6.7%
10,323,298
47.2%
1,098,689
10,604,825
45.5%
1,065,071
-281,527
-2.7%
662,284
3.0%
85,907
867,951
3.7%
98,160
-205,667
-23.7%
6,054
0.0%
-
6,118
0.0%
-
-64
-
8,795,738
40.2%
29,774
9,460,565
40.5%
116,872
-664,827
-7.0%
111,344
0.5%
-
111,360
0.5%
-
-16
110,091
0.5%
-
110,100
0.5%
-
-9
1,253
0.0%
-
1,260
0.0%
-
-7
-0.6%
21,901,390
100.0% 1,214,834
23,330,321
100.0% 1,280,777
-1,428,931
-6.1%
10,349,932
47.3%
11,634,010
49.9%
-1,284,078
-11.0%
11,551,458
52.7%
11,696,311
50.1%
-144,853
-1.2%
* (previously termed "deteriorated")
At the end of 2015, lending by the Parent stood at €21.9 billion, a decrease year-on-year
(-€1.4 billion; -6.1%), but largely unchanged compared with June and up on September (+€1
billion; +4.6%).
The performance of the portfolio reflects the following:
 a substantial annual reduction in loans to Group companies (-€1.3 billion), occurring
mainly in the first half (-€1 billion).
More specifically, at the end of December UBI Leasing and UBI Factor had received loans of €6.1 billion
and €2.1 billion respectively4 – equivalent to 37.6% of lending – with a total contraction in the year of
€0.2 billion, the aggregate result of a €0.4 billion reduction for UBI Leasing and a slight recovery for UBI
Factor towards the end of the year (+€0.2 billion over twelve months; +€0.4 billion in the fourth quarter).
In December 2014 the two companies had received financing of €6.5 billion and €1.9 billion respectively,
accounting for 36.3% of the total.
At the end of the year loans granted to Prestitalia – a company which specialises in the salary and
pension backed lending sector – amounted to approximately €1.5 billion, consisting almost entirely of
“Mortgage loans and other medium to long-term financing” 5 . This exposure fell by €0.9 billion over
twelve months following the progressive repayment of previously outstanding short-term loans6;

a fall in the former Centrobanca and the former B@nca 24-7 portfolios (totalling over -€0.7
billion over twelve months; -€0.2 billion since the end of June and -€0.1 billion in the
quarter).
More specifically the volumes of business relating to the former B@nca 24-7 – contracting progressively
given the residual nature of the business – amounted to approximately €4.8 billion at the end of
December (-€568 million year-on-year; -€253 million in the second half; -€95 million since September),
consisting of €4.1 billion of “Mortgage loans and other medium to long-term financing” and €0.7 billion of
various forms of consumer credit.
The former Centrobanca loans remained unchanged at €4.7 billion7 (-€175 million since the beginning of
the year) attributable to “mortgage loans and other medium to long-term financing” amounting to €4.5
billion and “other transactions” amounting to €0.2 billion;
4 Support for UBI Leasing is provided in the form of reverse repurchase agreements (securities eligible for refinancing issued as part of
internal securitisations), mortgages and current accounts, but above all “other short-term transactions”. Financing to UBI Factor is
all short-term (current accounts and other transactions).
5 With the exception of €200 million of “mortgages” granted by the former Centrobanca, these are loans previously granted to the
former B@nca 24-7.
6 In view of the liquidity available, a short-term loan amounting to approximately €1 billion was repaid in the second quarter, replaced
to a small extent by two new loans totalling €0.2 billion, of which €0.1 billion was short-term and matured in the fourth quarter and
€0.1 billion was medium to long-term.
7 Excluding the €200 million from the Centrobanca merger, already included in loans to Prestitalia.
28*

the trend for some exposures of a technical nature, such as those to the Cassa di
Compensazione e Garanzia (“CCG” - a central counterparty clearing house), subject to a
degree of variation during the year because of their nature.
At the end of year, ordinary business with the CCG totalled €1.2 billion, up €0.2 billion over twelve
months due to a substantial increase in the fourth quarter (+€0.6 billion), after a fall over the summer
(-€0.4 billion). In terms of the type of lending, the year-on-year trend related entirely to reverse
repurchase agreements with Italian government securities as the underlying (€771 million in December
2015; €541 million a year earlier), while the rest of the exposure consisted of margin deposits required
to guarantee repurchase agreements on Italian government securities (€464 million, unchanged
compared with December 2014). If, however, the fourth quarter only is considered, the change was
determined by a recovery in reverse repos (+€0.8 billion) – down to zero in September – which more than
offset the reduction in the aforementioned margin accounts (-€0.2 billion)8;

the loan granted at the end of November to the in Resolution Fund to rescue four Italian
banks in extraordinary administration.
As described in detail in the Consolidated Management Report, which may be consulted9, the resolution
programme involved various types of action, including the establishment of four new joint stock
companies (bridge-banks), whose share capital was subscribed entirely by the Resolution Fund. In order
to allow it to acquire the necessary liquidity, loans were granted by three banks, including UBI Banca,
which granted:
- a loan of €0.8 billion, repaid at the end of 2015 with the contributions paid to the Fund by the Italian
banking sector;
- a loan of €0.5 billion with a term of 18 months less one day, to be repaid with the proceeds from the
disposal of the bridge-banks, for which the CDP committed to provide backing, should the Fund have
insufficient liquidity on the maturity date of the loan.
As concerns “large exposures”, the supervisory report at Large exposures
the end of December 2015 prepared on the basis of the
31.12.2015 31.12.2014
provisions of the new Basel 310 rules in force since 1st Figures in tho usands o f euro
January 2014, shows four exposures for UBI Banca,
Number of positions
4
4
consisting of both loans and unsecured guarantees, of
Exposure
80,085,957 88,416,158
an amount equal to or greater than 10% of the
of which intragroup
52,959,035
58,299,674
qualifying capital – calculated according to the
Positions at risk
319,080
supervisory rules in force – for a total of €80.1 billion, of
of which intragroup
318,957
which:
• €53 billion to consolidated companies;
• €18.2 billion to the Ministry of the Treasury, in relation to investments in government
securities;
• €7.4 billion relating to total transactions with the CCG;
• €1.5 billion to the Ministry of the Economy and Finance11.
As a consequence, amongst other things, of the application of a nil weighting factor on
government exposures, no effective exposure to risk by the Parent was found after weightings
(banks belonging to banking groups are subject to an individual limit of 25% of the qualifying
capital).
Finally, guarantees granted to customers amounted to €1.91 billion at the end of the year, an
overall increase of €0.28 billion compared with €1.63 billion at the end of 2014 (+17%), and
they were composed as follows:
• financial guarantees amounted to €1.73 billion (€1.58 billion in December 2014),
approximately 60% of which granted to ordinary customers and the remaining 40% to
Group companies;
• commercial guarantees amounting to €178.2 million (€49 million in 2014).
Risk
At the end of the year non-performing (previously termed deteriorated) assets gross of writedowns, amounting to €1.8 billion, had again fallen moderately, but progressively (-€75.9
8 The margin accounts required relate directly to the average volumes of repurchase business used for financing.
9 See in this respect the sub-section “The resolution and rescue of four Italian banks” contained in the section entitled “The
European Banking Union”.
10 Bank of Italy Circulars No. 285 and No. 286 of 17th December 2013 and subsequent updates.
11 The exposure to the Ministry of the Economy and Finance relates to current and deferred tax assets.
29*
million compared with December 2014; -4%), partly the result of disposals of non-performing
loans carried out by the Parent during the year (for a total book value of €86.3 million, of
which €45.6 million in the fourth quarter).
As shown in the table reporting movements in gross non-performing exposures over the twelve
month period a small increase was recorded in inflows from the performing category – which
mainly continued to regard unlikely to pay exposures – against a fifty percent reduction in
outflows to performing status. Total transfers between the various categories of nonperforming loans also reduced by over 30%. In detail:
• bad loans (termed “non-performing loans” in previous financial reports) – which continued
to be fed by transfers from other classes of non-performing exposures (“unlikely to pay”)
and only to a residual extent by inflows from performing status – recorded a reduction in
write-offs and payments received, as well as in profits on disposal;
• “unlikely to pay” loans. on the other hand, were driven mainly by inflows from performing
loans, while transfers from other categories of non-performing exposures (past due
exposures) fell by over fifty percent and transfers to other non-performing categories (bad
loans) fell by 13%. On the other hand increases were recorded in payments received and in
write-offs;
• exposures past due and in arrears recorded substantial reductions in terms of both inflows
from performing loans and transfers to other classes of performing exposures, – in both
cases more than halved compared with a year before – while at the same time transfers to
performing status recorded an equally substantial fall.
Loans and advances to customers as at 31st December 2015
Gross exposure
Figures in thousands of euro
Non-performing exposures (**)
- Bad loans (***)
- “Unlikely to pay” loans
- Past due loans
Performing loans
(8.14%)
(3.13%)
(4.90%)
(0.11%)
1,838,363
706,017
1,107,340
25,006
(91.86%)
Total
Impairment
losses
Carrying amount
Coverage (*)
623,529
386,556
235,638
1,335
(5.55%)
(1.46%)
(3.98%)
(0.11%)
1,214,834
319,461
871,702
23,671
33.92%
54.75%
21.28%
5.34%
20,734,329
47,773
(94.45%)
20,686,556
0.23%
22,572,692
671,302
21,901,390
2.97%
The item as a percentage of the total is given in brackets.
Loans and advances to customers as at 31st December 2014
Figures in thousands of euro
Non-performing exposures (**)
- Bad loans (***)
- “Unlikely to pay” loans (****)
- Past due loans
Performing loans
Total
Gross exposure
(7.96%)
(2.94%)
(4.89%)
(0.13%)
1,914,296
706,974
1,174,899
32,423
(92.04%)
Impairment
losses
Carrying amount
Coverage (*)
633,519
389,384
242,607
1,528
(5.49%)
(1.36%)
(3.99%)
(0.14%)
1,280,777
317,590
932,292
30,895
33.09%
55.08%
20.65%
4.71%
22,134,433
84,889
(94.51%)
22,049,544
0.38%
24,048,729
718,408
23,330,321
2.99%
The item as a percentage of the total is given in brackets.
(*) Coverage is calculated as the ratio of impairment losses to gross exposure. Impairment losses and gross exposures are given net of w rite-offs of positions subject to
bankruptcy proceedings.
(**) previously termed "deteriorated loans"
(***) previously termed "non-performing loans"
(****) On the basis of the new classification rules and internal regulations, exposures previously classified as “impaired” or “restructured” have been included in this class
which did not satisfy the requirements for being classified as “non-performing” and “exposures past due and/or in arrears”.
30*
Forborne exposures as at 31st December 2015
Gross exposure
Figures in thousands of euro
Non-performing exposures (**)
- Bad loans (***)
- Unlikely to pay loans
- Past due loans
Performing loans
(68.08%)
(2.75%)
(64.74%)
(0.59%)
485,425
19,620
461,561
4,244
(31.92%)
Total
Impairment
losses
Carrying amount
Coverage (*)
111,409
9,317
101,879
213
(62.50%)
(1.72%)
(60.11%)
(0.67%)
374,016
10,303
359,682
4,031
22.95%
47.49%
22.07%
5.02%
227,575
3,200
(37.50%)
224,375
1.41%
713,000
114,609
598,391
16.07%
The item as a percentage of the total is given in brackets.
Forborne exposures as at 31st December 2014
Gross exposure
Figures in thousands of euro
Impairment
losses
Carrying amount
Coverage (*)
Non-performing exposures (**)
(62.45%)
351,829
87,812
(55.91%)
264,017
Performing loans
(37.55%)
211,568
3,327
(44.09%)
208,241
1.57%
563,397
91,139
472,258
16.18%
Total
24.96%
The item as a percentage of the total is given in brackets.
(*) The coverage is calculated as the ratio of impairment losses to gross exposure.
For bad loans (previously termed “non-performing loans”) only, impairment losses and gross exposures are given net of write-offs of positions subject to bankruptcy
proceedings.
(**) previously termed "deteriorated loans"
(***) previously termed "non-performing loans"
In consideration, amongst other things, of the partial recovery of the total portfolio in the last
quarter of the year, non-performing exposures as a percentage of total loans stood at 8.14%
and at 5.55% in net terms, down compared with September (8.78%; 5.96%), but marginally up
on the data for the end of 2014 (7.96%; 5.49%).
Coverage for non-performing exposures change over twelve months from 33.09% to 33.92%,
although it was down compared with 34.37% in September. The performance in the last
quarter reflects primarily changes in coverage for bad loans, in relation to the disposals made,
for which written down positions were higher than the average, while other categories
improved. On the other hand coverage for performing loans, structurally lower than the Group
average in consideration of the specific nature of UBI Banca’s business, reduced to 0.23%
(0.38% at the end of 2014).
31*
Loans to customers: changes in non-performing (*) gross exposures in 2015
Figures in thousands of euro
Bad loans (**)
Initial gross exposure as at 1st January 2015
Increases
transfers from performing exposures
transfers from other classes of non-performing exposures (*)
other increases
Decreases
transfers into performing exposures
write-offs
payments received
disposals
losses on the disposal
transfers to other classes of non-performing (*) exposure
other decreases
Final gross exposure as at 31st December 2015
Unlikely to pay
loans
Past-due
exposures
Total
706,974
188,623
8,759
164,199
15,665
-189,580
-351
-117,814
-45,337
-17,725
-8,116
-237
-
1,174,899
298,303
194,720
58,525
45,058
-365,862
-55,805
-41,862
-80,347
-163,783
-24,065
32,423
58,915
57,368
25
1,522
-66,332
-5,067
-2,536
-58,729
-
1,914,296
545,841
260,847
222,749
62,245
-621,774
-61,223
-159,676
-128,220
-17,725
-8,116
-222,749
-24,065
706,017
1,107,340
25,006
1,838,363
Loans to customers: changes in non-performing (*) gross exposures in 2014
Figures in thousands of euro
Bad loans (**)
Initial gross exposure as at 1st January 2014
Increases
transfers from performing exposures
transfers from other classes of non-performing exposures (*)
other increases
Decreases
transfers into performing exposures
write-offs
payments received
disposals
losses on the disposal
transfers to other classes of non-performing (*) exposure
other decreases
Final gross exposure as at 31st December 2014
Unlikely to pay
loans
Past-due
exposures
Total
741,845
206,477
1,710
190,335
14,432
-241,348
-521
-134,623
-47,964
-21,125
-10,876
-573
-25,666
1,251,317
287,437
105,847
129,929
51,661
-363,855
-96,727
-11,581
-67,195
-895
-187,457
-
70,023
137,288
132,524
264
4,500
-174,888
-38,141
-4,249
-132,498
-
2,063,185
631,202
240,081
320,528
70,593
-780,091
-135,389
-146,204
-119,408
-21,125
-11,771
-320,528
-25,666
706,974
1,174,899
32,423
1,914,296
(*) previously termed "deteriorated"
(**) previously termed "non-performing loans"
Forborne exposures gross of impairment losses totalled €713 million in December, up €149.6
million (+26.6%) compared with the end of 2014, but slowing quarter-on-quarter (+€21 million
compared with September; +3%).
The year-on-year performance – attributable entirely to non-performing exposures (which rose
from 62.45% to 68.08% of the total) – also reflects the effect of the introduction of regulations
on forbearance 12 from September 2014. Non-performing positions must pass a minimum
period of one year (cure period), after which the return of the customer’s credit quality is
assessed before it can be reclassified among performing positions. This circumstance explains
the quarterly slowdown in the last quarter during which non-performing exposures recorded
their first reduction, although only modest in amount (-€8.2 million).
On the other hand forborne positions classified as performing must pass a minimum period of two years (“probation
period”) before a position can lose its forborne classification and therefore no longer appear in the relative supervisory
reports.
12 See the glossary attached to this publication for a definition of forbearance
32*
Operations on the interbank market
The net interbank position of UBI Banca as at 31st December 2015 was one of debt of €356
million, down sharply compared with -€5.1 billion at the end of 2014, having benefited both
from an improvement in the positive intragroup balance, up €2.4 billion to €7.7 billion, and
also from an improvement in the negative balance with external counterparties, which fell by
€2.3 billion to -€8 billion (inclusive of TLTRO refinancing operations amounting to €8.1
billion).
As shown in the table, if the balances with the central bank and those for business with
subsidiary banks are not considered, UBI Banca’s net interbank position was again slightly
negative (-€304 million) but down by almost half (-47.5%) year-on-year as a consequence of
reduced volumes of operating business, especially on the liabilities side.
The centralisation at UBI Banca of bond issuances for ordinary customers originated by the network banks is
reflected in the Parent’s financial structure, which includes loans to banks (within the item intragroup securities),
subscriptions of securities issued by subsidiary banks and a decline at the same time in intragroup funding due
to a change in policy for the management of bond funding and liquidity
On the basis of the organisational structure in which UBI Banca plays a role of policy-making and co-ordination
for the entire banking group, intragroup transactions are of strategic importance in the context of overall activities
as they ensure proper centralised liquidity management and the settlement of intercompany cash flows. The
regulations to implement the 2015 Financial Risk Management Policy document require the composition of the
asset and liability positions of Group banks and companies with banking counterparties to consist exclusively of
relationships with the Parent. Only the Parent may enter into positions on the market with institutional
counterparties. As an exception to that rule, liquidity management is not exclusively by the Parent for UBI
Leasing, UBI Factor and for UBI Banca International. The Management Board of the Parent is responsible for
defining specific liquidity management procedures for the aforementioned counterparties.
Interbank market
Figures in tho usands o f euro
Loans and advances to banks
of which:
- loans to central b ank s
- intragroup
of which: intragroup securities
Due to banks
of which:
- due to central b ank s
- intragroup
of which: sub ordinated deposits
31.12.2015
A
31.12.2014
E
Changes A/E
30.9.2015
B
30.6.2015
C
31.3.2015
D
15,489,215
16,343,837
15,026,560
15,073,014
14,055,649
1,433,566
375,735
14,234,999
6,302,326
528,955
14,892,913
6,371,145
282,899
13,912,056
6,345,702
270,540
13,509,526
5,805,015
528,311
12,515,918
5,733,044
-152,576
1,719,081
569,282
15,845,354
14,675,513
13,199,889
17,798,453
19,140,417
-3,295,063
8,106,441
8,104,588
6,102,991
9,101,548
10,305,964
-2,199,523
-21.3%
6,556,577
-
4,892,375
-
5,259,231
-
6,548,029
-
7,244,652
-
-688,075
-
-9.5%
-
amount
%
10.2%
-28.9%
13.7%
9.9%
-17.2%
Net interbank position
-356,139
1,668,324
1,826,671
-2,725,439
-5,084,768
-4,728,629
of which: intragroup
non-Group b ank s
7,678,422
-8,034,561
10,000,538
-8,332,214
8,652,825
-6,826,154
6,961,497
-9,686,936
5,271,266
-10,356,034
2,407,156
-2,321,473
45.7%
-22.4%
-303,855
-756,581
-1,006,062
-855,928
-578,381
-274,526
-47.5%
Net interbank position excluding central
banks and intragroup business
-93.0%
Loans and advances to banks rose to €15.5 billion from €14.1 billion in December 2014,
consisting of the following:
• liquidity of €376 million held on a centralised compulsory reserve account (€528 million at
the end of 2014 ), on the basis of management strategies with account taken of constraints
concerning the average deposit to be maintained;
• loans and advances to other banks amounting to €15.1 billion (€13.5 billion in the
comparative period), €14.2 billion of which relating to intragroup relationships. Different
types of lending performed as follows:
- an overall decrease of €1.5 billion in current accounts and term deposits, mainly
attributable to reductions in intercompany deposits;
33*
-
-
growth in other financing (+€2.5 billion) resulting from an increase in financing activity
carried out by the Parent for the network banks against grants to customers drawn from
the TLTRO loan pool (+€3.7 billion), partially offset by the reduction (-€1.2 billion) in
reverse repurchase agreements entirely of an intragroup nature. The decrease in the
latter relates to operations amounting to €0.7 billion with securities issued as part of
internal securitisations as the underlying in relation to the normal amortisation of these
and to an early repayment;
an increase in debt securities (up €0.6 billion to €6.3 billion) consisting of loans to the
network banks, subscribed by the Parent in order to channel liquidity acquired through
the centralisation of bond issuances.
Loans to banks: composition
31.12.2015
%
31.12.2014
%
Changes
amount
Figures in tho usands o f euro
Loans to central banks
Compulsory reserve requirements
%
375,735
375,735
2.4%
2.4%
528,311
528,311
3.8%
3.8%
-152,576
-152,576
-28.9%
-28.9%
15,113,480
2,026,466
1,681,145
97.6%
13.1%
10.9%
13,527,338
2,767,764
2,430,572
96.2%
19.7%
17.3%
1,586,142
-741,298
-749,427
11.7%
-26.8%
-30.8%
5,103,543
687,358
32.9%
4.4%
2,595,958
1,872,501
18.4%
13.3%
2,507,585
-1,185,143
Debt instruments
- structured securities (*)
4,416,185
6,302,326
45,025
28.5%
40.7%
0.3%
723,457
5,733,044
437,422
5.1%
40.8%
3.1%
3,692,728
569,282
-392,397
96.6%
-63.3%
510.4%
- other deb t instruments
6,257,301
40.4%
5,295,622
37.7%
961,679
15,489,215
100.0%
14,055,649
100.0%
1,433,566
Loans and advances to banks
Current accounts and deposits
Term deposits
Other financing
- reverse repurchase agreements
- other
Total
9.9%
-89.7%
18.2%
10.2%
(*) Mainly securities with an early redemption option
Funding from banks, which totalled €15.8 billion reduced by €3.3 billion compared with
December 2014, attributable primarily to changes in debt to central banks down €2.2 billion
to €8.1 billion. The remaining funds, subscribed in the LTRO auctions of December 2011 and
February 2012 amounting to €7 billion nominal13, reached their natural maturity date, while
new liquidity amounting to €4.9 billion nominal was acquired at the TLTRO auctions in March
and September 2015.
The total balance with the ECB, amounting to €8.1 billion, was composed solely of funds drawn from the
TLTRO auctions.
Due to banks: composition
31.12.2015
%
31.12.2014
Changes
%
amount
Figures in tho usands o f euro
%
Due to central banks
8,106,441
51.2%
10,305,964
53.8%
-2,199,523
-21.3%
Due to banks
Current accounts and deposits
Term deposits
Financing:
- repurchase agreements
- other
Other payables
7,738,913
2,253,790
4,460,255
960,674
389,462
571,212
64,194
48.8%
14.2%
28.1%
6.1%
2.5%
3.6%
0.4%
8,834,453
2,408,747
5,010,334
1,349,898
613,158
736,740
65,474
46.2%
12.6%
26.2%
7.1%
3.2%
3.9%
0.3%
-1,095,540
-154,957
-550,079
-389,224
-223,696
-165,528
-1,280
-12.4%
-6.4%
-11.0%
-28.8%
-36.5%
-22.5%
-2.0%
15,845,354
100.0%
19,140,417
100.0%
-3,295,063
-17.2%
Total
Funding from banking counterparties also fell by €1.1 billion to reach €7.7 billion. A decrease in
all types of funding was recorded as follows:
13 Total funds of €12 billion had been allotted to UBI Banca in the TLTRO auctions mentioned, €5 billion of which has already been
repaid in advance during the last quarter of 2014.
34*
•
•
€0.7 billion on current accounts and term deposits which recorded reduced deposits on
intragroup positions relating in particular to UBI Banca International14 and IW Bank;
€0.4 billion on financing as a result of a fall in both repurchase agreements (-€0.2 billion
attributable to the closure of a transaction with a market counterparty in the second quarter)
and in the item financing-other (-€0.2 billion), in relation to the amortisation instalments of
EIB grants used to support medium to long-term financing for SMEs (down to €570 million
from €735 million in December 2014).
Finally, as already reported, the item other payables, unchanged at €64.2 million, includes the
credit card settlement balance held with the Istituto Centrale Banche Popolari Italiane, which
fell over twelve months from €37.2 million to €20.9 million.
***
The table “Principal capital items with subsidiaries subject to control, joint control and
significant influence”, contained in part H of the notes to the financial statements, shows the
role of UBI Banca as a net lender or net borrower of funds with regard to the banks in the
Group, inclusive of any subscriptions of intragroup securities.
As at 31st December 2015 the net interbank balance of the Parent was positive with regard to
Banca Regionale Europea (€2.5 billion), Banco di Brescia (€3.3 billion), Banca Popolare
Commercio e Industria (€1.7 billion), Banca Popolare di Ancona (€2 billion), Banca Popolare di
Bergamo (€1 billion) and Banca di Valle Camonica (€0.6 billion).
On the other hand, it was negative with UBI Banca International (-€2 billion), IW Bank15 (-€2.3
billion), Banca Carime15 (-€2.3 billion).
***
Details of the liquidity reserve consisting of assets eligible for refinancing with the European Central Bank
are given in the Consolidated Management Report which may be consulted.
Further information on liquidity risk management is also given in Part E, section 3 of the Notes to the
Consolidated Financial Statements.
14 This Luxembourg bank transfers all surpluses, even temporary, of liquidity to the Parent and then draws on them on the basis of
investment and commercial requirements expressed by its customers.
15 As at 31st December 2015, UBI Banca’s debt to IW Bank and Banca Carime also consisted of debt securities issued subscribed by
the two banks for €1.3 billion and €1.7 billion respectively.
35*
Financial activities
The financial assets of UBI Banca as at 31st December 2015 totalled €20.1 billion, down by
€3.2 billion compared with the end of 2014. Net of financial liabilities of €0.6 billion, financial
assets stood at €19.5 billion (€22.7 billion a year before).
Financial assets/liabilities
31.12.2015
Figures in thousands of euro
Financial assets held for trading
of which: financial derivatives contracts
Financial assets designated at fair value
Available-for-sale financial assets
Held-to-maturity investments
Financial assets (a)
Carrying
amount
(A)
30.9.2015
%
Carrying
amount
(B)
30.6.2015
%
Carrying
amount
(C)
31.3.2015
%
Carrying
amount
(D)
31.12.2014
%
Carrying
amount
(E)
Changes (A) / (E)
%
amount
%
1,088,262
5.4%
760,790
4.0%
1,463,279
6.8%
1,654,371
7.3%
1,544,835
6.6%
-456,573
-29.6%
617,226
3.1%
653,234
3.4%
638,174
3.0%
799,005
3.5%
743,985
3.2%
-126,759
-17.0%
196,034
1.0%
195,490
1.0%
197,223
0.9%
198,365
0.9%
193,167
0.8%
2,867
1.5%
15,357,571
76.3%
14,767,754
76.8%
16,309,111
75.8%
17,405,247
76.3%
18,066,883
77.3%
-2,709,312
-15.0%
3,494,547
17.3%
3,486,873
18.2%
3,535,692
16.5%
3,528,010
15.5%
3,576,951
15.3%
-82,404
-2.3%
20,136,414
100.0%
19,210,907
100.0%
21,505,305
100.0%
22,785,993
100.0%
23,381,836
100.0%
-3,245,422
-13.9%
of which:
19,131,997
95.0%
18,110,466
94.3%
20,421,294
95.0%
21,607,800
94.8%
22,192,154
94.9%
-3,060,157
-13.8%
18,234,275
90.6%
17,763,585
92.5%
20,061,779
93.3%
21,185,264
93.0%
21,488,819
91.9%
-3,254,544
-15.1%
- equity instruments
214,770
1.1%
272,402
1.4%
266,988
1.2%
200,022
0.9%
195,523
0.8%
19,247
9.8%
- Units in UCITS.
172,421
0.9%
174,805
0.9%
178,849
0.8%
179,166
0.8%
250,174
1.1%
-77,753
-31.1%
608,600
100.0%
614,788
100.0%
754,027
100.0%
844,803
100.0%
722,181
100.0%
634,881
84.2%
844,803 100.0%
- debt instruments
of which: Italian government securities
Financial liabilities held for trading (b)
of which: financial derivatives contracts
Net financial assets (a-b)
608,600 100.0%
19,527,814
614,788 100.0%
18,596,119
20,751,278
21,941,190
722,181 100.0%
22,659,655
-113,581
-15.7%
-113,581
-15.7%
-3,131,841
-13.8%
Both available-for-sale and held-for-trading assets were subject to profit-taking during the
year on Italian government securities.
As shown in the table, the first portfolio recorded falls during the period January-September
although the sales, inclusive of those made as part of switching operations (therefore offset by
purchases for the same amount), also continued into the fourth quarter. Available-for-sale
assets continued to account for the largest portion of the total (76.3%) and their size not only
helped support interest income – although to a lesser extent than in the past due to the low
yields – but it also ensured that the Group maintains optimum liquidity levels, because they
satisfy the European Central Bank’s eligibility requirement.
On the other hand, substantial disposals were recorded in the trading portfolio in the third
quarter of the year.
No significant changes were recorded during the year in the remaining portfolios (held-tomaturity investments and financial assets designated at fair value).
Action to diversify commenced in the fourth quarter with new investments in investment-grade
corporate securities (AFS portfolio) and United States government securities (HFT portfolio).
These constituted the first stages of broader action which will gradually change the whole
composition of financial assets during the course of 2016.
36*
Available-for-sale financial assets
“Available-for-sale financial assets” (AFS), asset item 40, are measured at fair value with the recognition of changes in a
separate fair value reserve in equity, except for losses due to reductions in value that are considered significant or
prolonged. In this case the reduction in value that occurred in the period is recognised through profit or loss, the amount
being transferred from the negative or positive reserve that may have been recognised in equity previously. Following the
recognition of impairment losses, recoveries in value continue to be recognised in the separate fair value reserve in equity
if they relate to equity instruments and through profit and loss if they relate to debt instruments. Any decreases below
the level of the previous impairment losses are recognised through profit and loss.
Definitions relating to the fair value hierarchy (levels one, two and three) are given in Section A.3 of Part A – Accounting
Policies in the Notes to the Financial Statements.
Available-for-sale financial assets: composition
31.12.2015
L1
Figures in tho usands o f euro
Debt instruments
of which: Italian government securities
Equity instruments
Units in UCITS
Financing
Total
L2
31.12.2014
Carrying
amount
L3
L1
L2
Changes
L3
Carrying
amount
amount
%
14,840,900
313,310
17,640
15,171,850
16,921,010
899,134
-
17,820,144
-2,648,294
-14.9%
14,166,356
154,582
-
14,320,938
16,648,018
469,455
-
17,117,473
-2,796,535
-16.3%
2,313
-
136,325
138,638
1,726
45
117,675
119,446
19,192
16.1%
12,406
34,677
-
47,083
83,882
43,411
-
127,293
-80,210
-63.0%
-
-
-
-
-
-
-
-
-
14,855,619
347,987
153,965
15,357,571
17,006,618
942,590
117,675
18,066,883
-2,709,312
-15.0%
At the end of 2015 available-for-sale financial assets stood at €15.4 billion down €2.7 billion
compared with €18.1 billion in the previous December.
The total, 99% composed of debt securities, of which the majority consisted of Italian
government securities, had fallen to €14.3 billion from €17.1 billion in 2014, a net decrease of
€2.8 billion, the result of the following:
 sales of BTPs amounting to €825 million nominal in the first quarter, to €250 million
nominal relating to Republic of Italy securities in the second quarter (to which the maturity
of a CTZ for €50 million nominal must be added) and of BTP’s amounting to €1.75 billion in
the third quarter;
 purchases of BTPs for €610 million nominal, partially offset by the sale of BTPs for €350
million nominal and a Republic of Italy security for €50 million in the fourth quarter.
Switching operations were added to the sales detailed above, which led to a slight lengthening of the
maturities of the investments. The first operation, carried out in June, involved BTPs for a nominal amount
of €0.75 billion, while the second, carried out in October and November, involved the sale and purchase of
BTPs for €2 billion nominal.
Other debt securities (€851 million) increased by €148 million during the year. After the
reductions recorded in the interim periods and during the first quarter in particular (due to
redemptions and sales both of bonds issued by major Italian and European banking
counterparties and of corporate bonds), this item recorded new investments in the period
October-December totalling €500 million nominal in denominated investment-grade securities
in different sectors and with different ratings.
This last operation forms part of a broader strategy already reported in the introduction to this section of
progressively diversifying investments in order to lighten exposure to Italian government securities: the
implementation, which began in the fourth quarter of 2015, will continue in 2016.
An amount of €17.6 million was recognised in fair value level three for the convertible bond
issued by Sorgenia Spa, as part of the agreement pursuant under article 182 bis of the
Bankruptcy Law1.
Equity instruments (up to €138.6 million from €119.4 million before) incorporated the following
main movements (all relating to equities recognised within fair value level three):
1 See the section “General banking business with customers: Lending” in the consolidated management report for further details.
37*

the partial sale, concluded in December 2015 of the interest held in ICBPI (572,566 shares,
accounting for 4.04% of the share capital of this institute): the fair value fell year-on-year by
€10.9 million as a result of the disposal. This investment had been revalued in the second and third
quarter for a total of €75.8 million, consistent with the valuations involved when a preliminary contract
was stipulated;


the recognition agian in December of €24.1 million in relation to “profit-sharing equity
instruments” (“SFP Patrimonializzazione”) issued by Nuova Sorgenia Holding as a partial
conversion of the original debt to UBI Banca, in compliance with a restructuring agreement2;
the revaluation amounting to €3 million of the share Visa Europe Limited, recognised in
December following the communication of a proposal to purchase 100% of the share capital
of the company by the holding company Visa Inc.. The agreement involves the payment of a
pre-agreed price on the basis of which the new valuation of the shares held was made.
Finally units in UCITS (€47.1 million compared with €127.3 million twelve months before) saw
the disposal in the first quarter of an ETF fund with a carrying amount of €73.8 million at the
end of 2014 (classified in fair value level one).
Property funds held in portfolio in December 2015 totalled €17.8 million (€15.6 million a year before). An amount of €12.4
million was recognised in fair value level one (€10.1 million at the end of 2014) for the Polis Fund, which saw a partial
early redemption amounting to €2.2 million during the year.
Held-to-maturity investments
“Held-to-maturity investments”, asset item 50, are comprised of financial instruments that an entity intends and is able
to hold to maturity.
These assets are measured at amortised cost with the recognition of impairment losses, or recoveries in value when the
reason for the impairment no longer exists, through profit or loss.
Held-to-maturity investments: composition
31.12.2014
31.12.2015
Fair value
Carrying
amount
Figure s in th ous a nd s o f e u ro
Debt instruments
of which: Italian government securities
Financing
Total
L1
L2
Total
L3
Changes
Fair value
Carrying
amount
L1
L2
Total
L3
amount
%
3,494,547
3,599,957
-
-
3,599,957
3,576,951
3,607,673
-
-
3,607,673
-82,404 -2.3%
3,494,547
3,599,957
-
-
3,599,957
3,576,951
3,607,673
-
-
3,607,673
-82,404 -2.3%
-
-
-
-
-
-
-
-
-
-
-
3,494,547
3,599,957
-
-
3,599,957
3,576,951
3,607,673
-
-
3,607,673
-82,404
-2.3%
This portfolio, consisting of €3.05 billion nominal of BTPs with maturities between 2020 and
2022, had a book value of €3.5 billion, more or less unchanged during the year, except for
changes resulting solely from the effects of the accounting treatment.
Financial instruments held for trading
Financial assets held for trading
Asset item 20, “Financial assets held for trading” (HFT), comprises financial trading instruments “used to generate a
profit from short-term fluctuations in price”. They are recognised at fair value through profit or loss – FVPL.
Definitions relating to the fair value hierarchy (levels one, two and three) are given in Section A.3 of Part A – Accounting
Policies in the Notes to the Financial Statements.
2 See note 1.
38*
Financial assets held for trading had fallen as at 31st December 2015 to €1.1 billion compared
with €1.5 billion twelve months before. This reduction was attributable primarily to
investments in Italian government securities, down to €419 million from €794 million
previously.
The government security portfolio, which grew marginally during the course of the first half,
was subject to substantial profit taking in the period July-September, but it was fuelled with
new investments in the last quarter with a start also made on the partial geographical
diversification of sovereign debt securities purchased.
Financial assets held for trading: composition
31.12.2015
L1
Figures in tho usands o f euro
L2
31.12.2014
Carrying
amount
L3
L1
L2
Changes
Carrying
amount
L3
amount
%
A. On-balance sheet assets
Debt instruments
465,497
3
100
465,600
794,399
407
253
795,059
-329,459
-41.4%
of which: Italian government securities
418,790
-
-
418,790
794,395
-
-
794,395
-375,605
-47.3%
4,580
-
-
4,580
4,504
-
445
4,949
-369
-7.5%
275
-
581
856
241
-
601
842
14
1.7%
-
-
-
-
-
-
-
-
-
470,352
3
681
471,036
799,144
407
1,299
800,850
-329,814
-41.2%
647
612,461
4,118
617,226
777
741,828
1,380
743,985
-126,759
-17.0%
-
-
-
-
-
-
-
-
-
Total (b)
647
612,461
4,118
617,226
777
741,828
1,380
743,985
-126,759
-17.0%
Total (a+b)
470,999
612,464
4,799
1,088,262
799,921
742,235
2,679
1,544,835
-456,573
-29.6%
Equity instruments
Units in UCITS
Financing
Total (a)
-
B. Derivative instruments
Financial derivatives
Credit derivatives
-
In detail, the following movements were recorded:
- purchases for €850 million nominal against disposals for €800 million nominal in the first
quarter;
- purchases for €775 million nominal against sales for €790 million nominal in the second
quarter;
- the sale of a BTP for €725 million nominal in the third quarter;
- the purchase of a BTP for €300 million nominal in the fourth quarter.
Other debt instruments, which stood at €46.8 million at the end of the year compared with
€0.7 million in December 2014, included €45 million for a US Treasury security with a
nominal value of €50 million, purchased in the fourth quarter as part of a risk diversification
policy.
Equity instruments, classified mainly in fair value level one, remained at a low level with no
significant changes recorded: a total of €4.6 million at the end of 2015 compared with €4.9
million before.
Units in UCITS amounted to €856 thousand, almost unchanged compared with the end of
2014, of which €581 thousand related to residual investments in hedge funds made before
30th June 2007.
Finally, derivative instruments were held in portfolio amounting to €617 million (€744 million
in December 2014), totally financial in nature, for which the changes must be interpreted in
relation to the corresponding item recognised within financial liabilities held for trading.
39*
Financial liabilities held for trading
Financial liabilities held for trading: composition
31.12.2015
L1
Figures in tho usands o f euro
L2
31.12.2014
Carrying
amount
L3
L1
L2
Changes
Carrying
amount
L3
amount
%
A. On-balance sheet liabilities
Due to banks
-
-
-
-
-
-
-
-
-
-
Due to customers
-
-
-
-
-
-
-
-
-
-
Debt instruments
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Financial derivatives
7
608,582
11
608,600
300
721,881
-
722,181
-113,581
Credit derivatives
-
-
-
-
-
-
-
-
-
Total (b)
7
608,582
11
608,600
300
721,881
-
722,181
-113,581
-15.7%
Total (a+b)
7
608,582
11
608,600
300
721,881
-
722,181
-113,581
-15.7%
Total (a)
B. Derivative instruments
-15.7%
-
At the end of 2015 financial liabilities held for trading, consisting exclusively of financial
derivatives, had fallen to €609 million from €722 million before. As in the comparative year no
on-balance sheet liability positions existed, although UBI Banca had taken limited uncovered
short positions on Italian government securities during the year.
Financial assets designated at fair value
The item “financial assets designated at fair value” is comprised of financial instruments classified as such in
application of the fair value option (FVO). These financial assets are recognised at fair value through profit or loss.
Definitions relating to the fair value hierarchy (levels one, two and three) are given in Section A.3 of Part A – Accounting
Policies in the Notes to the Financial Statements.
Financial assets designated at fair value: composition
31.12.2015
Figures in tho usands o f euro
Debt instruments
Equity instruments
Units in UCITS
Financing
Total
L1
L2
31.12.2014
Carrying
amount
L3
L1
L2
Changes
Carrying
amount
L3
amount
-
%
-
-
-
-
-
-
-
-
1,700
3,000
66,852
71,552
3,224
3,000
64,904
71,128
424
0.6%
119,082
-
5,400
124,482
116,802
-
5,237
122,039
2,443
2.0%
-
-
-
-
-
-
-
-
120,782
3,000
72,252
196,034
120,026
3,000
70,141
193,167
2,867
-
1.5%
This item amounted to €196 million at the end of the year, more or less unchanged compared
with December 2014 (€193.2 million). The portfolio was composed as follows:
- equity instruments, held as part of merchant banking and private equity business,
amounting to €71.5 million (€71.1 million in the comparative period).
- €124.5 million of units in UCITS which included the listed Tages funds in level one
amounting to €119.1 million (€116.8 million recognised at the end of the previous year) and
investments in hedge funds in fair value level three amounting to €5.4 million (€5.2 million
at the end of 2014). Residual hedge funds are also present, amounting to €581 thousand,
recognised within financial assets held for trading.
The same section in the Consolidated Management Report may be consulted for updates on litigation in
progress (the Madoff affair and the Dynamic Decisions Growth Fund).
40*
Exposure to sovereign debt risk
UBI Banca: exposures to sovereign debt risk
31.12.2015
Country / portfolio of classification
31.12.2014
figures in thousands of euro
Nom inal
am ount
Carrying
am ount
Fair value
Nom inal
am ount
Carrying
am ount
Fair value
- Italy
15,744,921
18,286,963
18,392,375
18,799,190
21,530,758
21,561,480
financial assets and liabilities held for trading
(net exposure)
available-for-sale financial assets (*)
held-to-maturity investments
loans and receivables
- United States
financial assets and liabilities held for trading
(net exposure)
400,000
418,790
418,790
800,002
794,395
794,395
12,257,155
14,333,545
14,333,545
14,915,005
17,122,835
17,122,835
3,050,000
3,494,547
3,599,957
3,050,000
3,576,951
3,607,673
37,766
40,081
40,083
34,183
36,577
36,577
50,000
44,990
44,990
-
-
-
50,000
44,990
44,990
-
-
-
10
10
10
10
10
10
10
10
10
10
10
10
2
1
1
2
2
2
2
1
1
2
2
2
15,794,933
18,331,964
18,437,376
18,799,202
21,530,770
21,561,492
- Holland
loans and receivables
- Argentina
financial assets and liabilities held for trading
(net exposure)
Total on-balance sheet exposures
* The carrying amount is different from that reported in the line “Italian government securities” in the tables relating to “Available-for-sale financial assets”
due to the presence in this table of Cassa Deposito e Prestiti (a state controlled fund and deposit institution) bonds (a government issuer) amounting to €12.6
million as at 31st December 2015 and to €5.4 million as at 31st December 2014.
Details of the UBI Banca exposures are given on the basis that, according to the instructions issued by the European supervisory authority (European
Securities and Markets Authority, ESMA), “sovereign debt” is defined as debt instruments issued by central and local governments and by government
entities and also as loans granted to them.
The book value of the sovereign debt risk exposures of UBI Banca as at 31st December 2015
amounted to €18.3 billion, down on €21.5 billion at the end of 2014.
Sovereign debt risk remains concentrated on Italy with reductions explained by reductions in
the AFS and HFT portfolios. The domestic position consisting of debt held by government
continues to be contained and stable.
Exposure to the United States began in the fourth quarter following the purchase of a US
Treasury security, while exposures to Holland and Argentina remain completely negligible and
almost unchanged.
UBI Banca: maturities of Italian government securities
31.12.2015
Financial
assets held f or
trading
31.12.2014
Available-f orHeld-to-maturity
sale f inancial
investments
assets
Carrying
am ount
%
Financial
assets held f or
trading
Available-f orsale f inancial
assets
Held-to-maturity
investments
Carrying
am ount
%
Figures in thousands of euro
Up to 6 m onths
100,029
-
-
100,029
0.4%
-
49,925
-
49,925
0.2%
Six m onths to one year
-
155,670
-
155,670
0.9%
199,612
-
-
199,612
0.9%
One year to three years
50,226
4,775,847
-
4,826,073
26.5%
594,780
3,548,757
-
4,143,537
19.3%
-
1,405,203
2,336,591
3,741,794
20.5%
-
7,730,427
-
7,730,427
36.0%
268,535
6,187,391
1,157,956
7,613,882
41.8%
1
3,395,529
3,576,951
6,972,481
32.5%
-
1,796,827
-
1,796,827
9.9%
2
2,392,835
-
2,392,837
11.1%
418,790
14,320,938
3,494,547
18,234,275
100.0%
794,395
17,117,473
3,576,951
21,488,819
100.0%
Three years to five years
Five years to ten years
Over ten years
Total
The table above that reports the distribution by maturity of Italian government securities held
in portfolio, shows increases in the percentage of the following:
- in the time range “from one year to three years” (26.5% of the total compared with 19.3%),
in relation to the presence in the AFS portfolio of securities amounting to €3.1 billion with
maturity in 2018, which in the comparative year fell within a different time range;
- in the range “five years to ten years” (up to 41.8% from 32.5% before, notwithstanding the
passage of over 60% of the HTM portfolio into the shorter maturity range) in which the
effects of the switching operation on the AFS portfolio were concentrated (with a movement
41*
out of the range “three years to five years”) together with the investments made within the
trading portfolio in the last quarter of the year.
With regard to the latter portfolio, we report that the sales made in the third quarter regarded
in particular securities with maturities of “one year to three years”.
As at 31st December 2015 the average life of the trading portfolio was 4.1 years (1.4 years at
the end of 2014), that of the AFS portfolio was 6.2 years (6.1 years) and that of the held-tomaturity portfolio was 4.8 years (5.8 years).
***
Debt instruments other than government securities recognised within assets
31.12.2015
Figures in tho usands o f euro
Issuer
Nationality
Carrying
amount
31.12.2014
Fair Value
Nominal
amount
Carrying
amount
Nominal
amount
Fair value
Corporate
Italy
205,078
199,741
209,659
190,916
186,202
187,599
Corporate
France
70,787
70,787
66,000
43,967
43,967
40,000
Corporate
Luxembourg
-
-
5
27,893
27,893
24,715
Corporate
Corporate
Holland
United Kingdom
112,899
76,663
112,899
76,663
106,706
74,037
28,073
10,111
28,073
10,111
26,150
8,987
Corporate
Spain
41,522
41,522
37,900
22,640
22,640
20,271
Corporate
Hungary
-
-
-
10,226
10,226
10,000
Corporate
United States
77,262
77,262
72,800
10,935
10,935
10,000
Corporate
Corporate
Australia
Denmark
15,725
8,075
15,725
8,075
14,500
7,500
-
-
-
Corporate
Finland
2,033
2,033
2,000
-
-
Corporate
Germany
26,690
26,690
25,500
-
-
-
Corporate
Corporate
Ireland
Mexico
20,297
8,325
20,297
8,325
20,100
7,500
-
-
-
Corporate
Norway
Total Corporate
9,626
9,626
9,000
-
-
-
674,982
669,645
653,207
344,761
340,047
327,722
Banking
Germany
5,760
5,760
5,003
2
2
3
Banking
Italy
6,475,049
6,561,971
6,470,407
6,165,609
6,167,915
6,136,931
Banking
Banking
Luxembourg
United Kingdom
27,738
27,738
27,000
21,552
10,381
21,552
10,381
18,000
10,000
Banking
Austria
15,228
15,228
14,500
-
-
-
Banking
Finland
7,012
7,012
6,500
-
-
-
Banking
France
8,083
8,083
8,000
-
-
-
Banking
Banking
Ireland
Holland
5,088
7,563
5,088
7,563
5,000
7,500
-
-
-
Banking
Spain
19,111
19,111
19,000
-
-
-
Banking
Sweden
8,118
8,118
7,500
-
-
-
Banking
Cyprus
64
64
9,500
66
66
9,500
6,578,814
-
6,665,736
-
6,579,910
-
6,197,610
3
6,199,916
3
6,174,434
2
Total Banking
E.I.B.
Total Supranational
Total debt instruments
Luxembourg
-
-
-
3
3
2
7,253,796
7,335,381
7,233,117
6,542,374
6,539,966
6,502,158
With a view to greater transparency on credit risk exposures consisting of debt instruments other than sovereign debt
– as requested by the European Securities and Markets Authority (ESMA) in Document No. 725/2012 of 12th
November 2012 – a table has been provided summarising total debt instruments other than sovereign debt recognised
among the assets of the UBI Banca balance sheet (available-for-sale financial assets, financial assets held for trading,
loans and advances to banks and loans and advances to customers).
The book value of those investments totalled €7.3 billion (€6.5 billion in December 2014): the
diversification of the AFS portfolio carried out in the fourth quarter contributed to this growth
(€500 million nominal) and determined a broader geographical distribution of the investments
especially with regard to the issuers of corporate bonds. On the contrary, the banking
securities held in portfolio were again highly concentrated on Italian issuers because the
carrying amount shown in the table (€6.6 billion in the 2015) consists of €6.3 billion of bonds
issued by the network banks and subscribed by UBI Banca as part of intragroup business.
Finally to complete the disclosures required by the ESMA, in December 2015 (as also in December 2014), UBI
Banca held no credit default products, nor did it carry out any transactions in those instruments during the year,
either to increase its exposure or to acquire protection.
42*
Equity and capital adequacy
The equity of UBI Banca as at 31st
December 2015 inclusive of profit for the
year, amounted to €8,758.9 million
compared with €8,566.7 million at the
end of 2014.
Valuation reserves: composition
31.12.2015
Figures in thousands of euro
Available-for-sale financial assets
31.12.2014
281,294
143,045
-101
-243
-243
Cash flow hedges
Currency translation differences
Actuarial gains/losses for defined benefit pension
plans
Special revaluation laws
As can be seen from the statement of
-7,554
-8,844
changes in equity as at 31st December
30,993
30,993
2015 and from the statement of
Total
304,389
164,951
comprehensive income contained among
the separate financial statements, the increase of €192.2 million that occurred over twelve
months is attributable to:
 the use of the extraordinary reserve amounting to €72 million in order to pay a dividend1;
 an aggregate increase in the valuation reserve of approximately €139.4 million, consisting
of +€138.2 million relating to available-for-sale financial assets and +€1.3 million relating to
actuarial losses on defined benefit plans and -€0.1 million relating to cash flow hedges;
 an increase on aggregate of €1.4 million following the grant of shares to the “Key Personnel”
of the Group in relation to incentive schemes;
 recognition of profit for the year of €123.4 million.
Fair value reserves of available-for-sale financial assets: annual changes
Figures in thousands of euro
1. Opening balances as at 1st January 2015
2. Positive changes
2.1 Increases in fair value
2.2 Transfer to income statement of negative reserves
- following impairment losses
- from disposal
Debt
instruments
3.3 Transfer to the income statement of positive reserves
Financing
Total
74,246
59,378
9,421
-
143,045
16,433
16,433
4,876
4,156
-
266,221
238,483
27,018
337
-
720
276
-
27,738
613
26,681
-
444
-
27,125
-
-
-
-
-
-103,940
-13,663
-
-22,102
-2,289
-
-1,930
-1,405
-525
-
-127,972
-17,357
-525
-90,277
-19,813
-
-
-110,090
-
-
-
-
-
215,218
53,709
12,367
-
281,294
3.4 Other changes
4. Closing balances as at 31st December 2015
UCITS units
244,912
219,894
2.3 Other changes
3. Negative changes
3.1 Decrease in fair value
3.2 Impairment losses
Equity
instruments
As shown in the table, the total increase of €138.2 million in the “fair value reserve for
available-for-sale financial assets” reflects the significant increases in the fair value of debt
securities held in portfolio (net of tax), as a result of the progressive improvement in prices on
financial markets attributable, amongst other things, to the adoption and subsequent increase
in quantitative easing measures taken by the ECB.
More specifically, the reserve relating to those assets saw its balance improve by €141 million,
with increases in fair value of €217.9 million relating almost entirely to Italian government
securities. The reserve for government securities therefore rose from +€68.5 million in
December 2014 to €211 million at the end of 2015.
1 A Shareholders’ Meeting also approved the full replenishment of the 2014 loss for the year, amounting to €918.4 million, attributable
primarily to the impairment of Group subsidiaries, by drawing on the share premium reserve.
43*
Fair value reserves for available-for-sale financial assets: composition
31.12.2015
Positive reserve
Figures in thousands of euro
1. Debt instruments
31.12.2014
Negative reserve
Total
Positive reserve
Negative reserve
Total
228,218
-13,000
215,218
253,440
-179,194
74,246
2. Equity instruments
53,727
-18
53,709
59,396
-18
59,378
3. Units in UCITS
4. Financing
12,370
-
-3
-
12,367
-
10,165
-
-744
-
9,421
-
294,315
-13,021
281,294
323,001
-179,956
143,045
Total
The item “transfer to income statement of negative reserves”, amounting to €27 million, relates
primarily to sales of government securities and €0.3 million of which to impairment for the
write-down of a bond.
Decreases included reductions in fair value amounting to €13.7 million, over 90% of which
regarding government securities, and also “transfers of positive reserves to the income
statement from disposal” amounting to €90.3 million, consisting almost totally of disposals of
government securities.
As concerns equity investments (net of tax), the table shows increases in fair value of €16.4
million of which €14 million relating to the stake held in Istituto Centrale delle Banche
Popolari Italiane2 and €2 million to the revaluation of the Visa Europe Limited shares carried
out in December following the receipt of a communication from Visa Inc. stating its intention to
purchase 100% of the share capital of that company at a pre-agreed price.
Decreases included reductions in fair value amounting to €2.3 million relating entirely to the
stake held in S.A.C.B.O. and “transfers to the income statement from positive reserves”
amounting to €19.8 million relating to the disposal of the stake held in I.C.B.P.I..
The reserve relating to units in UCITS recorded increases in fair value of €4.2 million, over
70% of which relating to the Polis fund, and “transfers to the income statement of negative
reserves” amounting to €0.7 million, of which €0.4 million from disposals and €0.3 million for
impairment due to the write-down of an ETF fund. Reductions included decreases in fair value
of €1.4 million and impairment losses of €0.5 million relating to the write-down of two funds
carried out in the third quarter.
As shown in Section 2, Part F of the Notes to the Financial Statements, at the end of 2015 the
own funds of UBI Banca – calculated according to the new prudential regulations for banks
and for investment companies which came into force on 1st January 2014 (known as Basel 3) –
totalled €9,725 million, of which €8,272 million was Common Equity Tier 1 capital.
Capital requirements for credit risk, credit valuation adjustment risk, market risk and
operational risk – details of which are given in that same section of Part F – totalled €1,845
million, to give a Common Equity Tier 1 capital ratio of 35.87%, a Tier 1 capital ratio of
35.87% and a total capital ratio of 42.16%.
2 Due to the change in the fair value of the investment that occurred consistent with the valuations performed when a preliminary
contract for the sale of part of the stake held was signed.
44*
Relations with Group member companies
Details of relations with companies in the Group are given in part H of the notes to the
financial statements as part of the information on related parties, distinguishing between
subsidiaries (fully consolidated line-by-line) and associates (consolidated using the equity
method
Transactions
with
connected parties
related
and
with
Related parties
With Resolution No. 17221 of 12th March 2010 – amended by the subsequent Resolution No.
17389 of 23rd June 2010 – the Consob (Italian securities market authority) approved a
Regulation concerning related-party transactions. The regulations concern the procedures to
be followed for the approval of transactions performed by listed companies – such as UBI
Banca – with parties with a potential conflict of interest, including major or controlling
shareholders, members of the management and supervisory bodies and senior managers
including their close family members.
The information pursuant to article 5, paragraph 8 of the aforementioned Consob Resolution
17221/2010 and in particular that concerning transactions of “greater importance” concluded
by UBI Banca with related parties in 2015, is reported in the consolidated management report,
which may be consulted.
In compliance with IAS 24, Part H of the Notes to the Financial Statements also provides
information on balance sheet and income state transactions between UBI Banca and its
related parties and those items as a percentage of the total for each item in the financial
statements.
Connected parties
In implementation of article 53, paragraphs 4 et seq of the Consolidated Banking Act and
Inter-Ministerial Credit Committee Resolution No. 277 of 29th July 2008, on 12th December
2011 the Bank of Italy issued the ninth update of the “New regulations for the prudential
supervision of banks” (published in the Official Journal of 16th January 2012) regarding risk
assets and conflicts of interest concerning parties connected to banks or banking Groups,
where connected parties are defined as a related party and all the parties connected to it.
The new regulations are designed to guard against the risk that the closeness of persons to
decision-making centres might compromise the objectivity and impartiality of decisions
concerning loans to and/or other transactions with the those persons.
The first measure therefore regards the introduction of supervisory limits for risk assets (of a
bank and/or of a group) lent to connected parties. The limits differ according to the type of
related party, with stricter levels for relations between banks and industry.
The supervisory limits are supplemented in the regulations with special approval procedures,
together with specific recommendations concerning organisational structure and internal
controls.
45*
In compliance with the provisions of Title V, Chapter 5, of circular No. 263 of 27th December
2006, UBI Banca has adopted specific “Regulations for transactions with Connected Parties of
the UBI Group” containing measures concerning “risk assets and conflicts of interest with
regard to connected parties”. These regulations which govern procedures designed to preserve
the integrity of decision-making processes concerning transactions with connected parties
carried out by UBI Banca.
On 15th May 2012 the Supervisory Board resolved that at UBI Banca the new “Connected
Parties Committee” should be the same as the pre-existing “Related Parties Committee”,
created in accordance with Consob (Italian securities market authority) provisions and with
the regulations governing related party transactions by a resolution of that same Supervisory
Board on 24th of November 2010. It therefore took the name “Related and Connected Parties
Committee”.
UBI Banca has always been within the limits laid down by supervisory regulations in all the
quarterly reports to the Supervisory Board made from 31st March 2015 until 31st December 2015.
***
Further information is given on the Related and Connected Parties Committee in the “Report
on corporate governance and the ownership structure of UBI Banca Spa” contained in another
part of this publication in which information is also given on internal policies on controls for
risk assets and conflicts of interest relating to connected parties.
46*
Share performance and shareholder
structure
Share performance
The UBI Banca share is traded on the Mercato Telematico Azionario (electronic stock exchange)
of Borsa Italiana in the blue chip segment and forms part of the 40 shares in the FTSE/Mib
Index.
Performance comparisons for the Unione di Banche Italiane share
A mo unts in euro
30.12.2015
A
30.9.2015
B
30.6.2015
C
31.3.2015 30.12.2014
D
E
% change
A/E
18.7.2011*
F
% change
A/F
Unione di Banche Italiane shares
- official price
6.246
6.359
7.235
7.221
5.967
4.7%
3.351
86.4%
- reference price
6.200
6.340
7.195
7.285
5.960
4.0%
3.278
89.1%
FTSE Italia All-Share index
23,236
22,845
23,985
24,734
20,138
15.4%
18,628
24.7%
FTSE Italia Banks index
15,388
16,012
17,032
17,325
13,407
14.8%
12,647
21.7%
(*) The date of the conclusion of the increase in UBI Banca’s share capital by €1 billion, with the subscription of marginal shares by the underwriting
syndicate.
Source Datastream
Financial markets were very volatile in 2015. Various factors influenced the decisions made by
investors: the start of quantitative easing by the ECB and tensions in Greece played a key role
in the first half of the year, while Chinese instability and the decline in oil prices together with
the expected United States monetary policy decisions affected trends on stock exchanges in
the second half of the year.
A series of events occurred in December in particular which drove share performance in the
banking sector in opposite directions. While the Resolution Plan for four Italian banks caused
sales in the sector, on the other hand rumours of possible merger transactions resulted in a
recovery in share prices, although this was uneven.
The year 2016 began by inheriting the problems that had already arisen relating to the performance of the
Chinese stock exchange due to disappointing sector results, to the real strength of the US recovery, to the
fall in oil prices and to the geopolitical tensions affecting the Gulf area.
The Italian banking sector continued to be influenced by various hypotheses regarding the expected
consolidations, added to by fears resulting from the presence of large stocks of non-performing loans and
the possible application of bail-ins to banks with weak capitalisation, with penalising impacts on the whole
sector. Reassurances of the soundness of banks and further monetary expansion by the ECB in the second
half of January did not prevent strong speculative forces from severely affecting the share prices of national
banks.
As concerns the main stock market indices, the FTSE Italia All-Share ended the year up
15.4%, while the FTSE Italia Banche was up 14.8%.
Against this backdrop, the UBI Banca share rose 4% over twelve months (a rise in the official
price of 4.7%): the role of a pole of attraction that the market attributed to the Bank helped to
penalise the performance of the share with respect to the market indices.
Trading in UBI Banca shares on the electronic stock market in 2015 involved approximately 2
billion shares for €13.5 billion (€2.3 billion shares traded for approximately €14.2 billion in
2014).
At the end of the year the stock market capitalisation (calculated on the official price) had
risen to €5.6 billion from €5.4 billion in December 2014, which confirmed UBI Banca in third
place among listed Italian commercial banking groups1.
1 The Group is positioned in the fourth place if all listed banking groups are considered.
47*
At European level, the UBI Group was again among the first 40 institutions on the basis of the
classification drawn up by the Italian Banking Association in its European Banking Report,
which considers the EU15 countries plus Switzerland2.
Performance of the UBI Banca share since 18th July 2011 (*) and volumes traded
9
60,000,000
55,000,000
8
50,000,000
7
Volumes
45,000,000
6
40,000,000
35,000,000
5
30,000,000
4
25,000,000
3
20,000,000
15,000,000
2
10,000,000
1
0
5,000,000
2011
2012
2015
2014
2013
2016
0
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 g f m a m g l a s o n d g
reference prices in euro
Performance of the FTSE Italia All‐Share index, the FTSE Italia Banks index and the UBI Banca share
since 18th July 2011 (*)
250
240
230
220
210
200
190
180
170
160
150
140
130
120
110
100
90
80
70
60
50
40
30
20
10
0
UBI Banca
FTSE Italia All-Share
FTSE Italia Banks
2011
2012
2013
2014
2015
2016
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 g f m a m g l a s o n d g
reference prices in euro
(*) The date of the conclusion of the increase in UBI Banca’s share capital by €1 billion, with the subscription of marginal shares by the underwriting syndicate.
2 EBR International Flash, January 2016.
48*
The main information concerning the UBI Banca share is summarised below, along with the principal stock
market indicators, which have been calculated using consolidated figures.
The UBI Banca share and the main stock market indicators
2015
Number of outstanding shares at the end of year
2014
901,748,572
901,748,572
Average price of the UBI share (average of the official prices quoted daily by Borsa Italiana Spa) - in euro
6.887
6.193
Minimum price (recorded during trading) - in euro
5.180
4.824
Maximum price (recorded during trading) - in euro
7.880
7.545
Dividend per share - in euro
Dividend yield (dividend per share/average price)
Total dividends - in euro (*)
Book Value (consolidated equity attributable to shareholders of the Parent excluding profit for the year / Number of shares) - in euro
0.08
1.60%
1.29%
99,034,842
72,021,230
10.94
10.87
Book value calculated by deducting goodw ill attributable to the shareholders of the Parent from consolidated equity - in euro
9.36
9.29
Book value calculated by deducting intangible assets attributable to the shareholders of the Parent from consolidated equity - in euro
9.06
8.98
5,632
5,381
Stock market capitalisation at the end of the year (official prices) - in millions of euro
Price / book value [Stock market capitalisation at the end of the year / (consolidated equity attributable to the shareholders of the Parent
excluding profit for the year)]
0.57
0.55
Price/book value calculated by deducting goodw ill attributable to the shareholders of the Parent from consolidated equity
0.67
0.64
Price / book value calculated by deducting intangible assets attributable to the shareholders of the Parent from consolidated equity
0.69
0.66
0.1251
-0.8070
EPS - Earning per share (consolidated net profit / loss per share pursuant to IAS 33) - in euro
(*)
0.11
The total dividend payout for 2015
dividend by the Management Board.
The total dividend payout for 2014
dividend by the Management Board.
was
That
was
That
calculated on the 900,316,743 shares outstanding on the date of the approval of the proposal to declare a
number does not include the 1,431,829 treasury shares held in portfolio on that same date.
calculated on the 900,265,380 shares outstanding on the date of the approval of the proposal to declare a
number did not include the 1,483,192 treasury shares held in portfolio on that same date.
The indicators for 2014 have been calculated using consolidated equity net of the loss for the period to give a more appropriate indication of the capital value
of the share and of the price/book value.
Report on corporate governance and the ownership structure
The share capital of UBI Banca as at 31st December 2015 amounted to €2,254,371,430
consisting of 901,748,572 ordinary shares, all with normal dividend entitlement from 1st
January 2015.
As already disclosed, with the transformation of UBI Banca from a joint stock co-operative company into an
ordinary joint stock company, approved by an Extraordinary Shareholders’ Meeting held on 10th October
2015, all the provisions in the articles of association relating to “Registered Shareholders” (including those
on acceptance procedures) were repealed because no longer compatible with the new legal form, where the
figure of the “Registered Shareholder” is precisely the same as that of any other shareholder. As provided
for by Law No. 33/2015, which converted Decree Law No. 3/2015 on the reform of “popular” co-operative
banks, Art. 10 of the new articles of Association also establishes that until 26th March 2017 (i.e. 24 months
from the date of entry into force of the conversion law) “no party with the right to vote may exercise it, for
any reason, with a quantity of shares greater than 5% of the share capital with voting rights”.
Shares held by Italian or foreign collective investment undertakings are never counted for the
purposes of this limit.
Under Article 120, paragraph 2 of the Consolidated Finance Act (Legislative Decree No.
58/1998), persons holding more than 2% of the share capital in a share issuer which has Italy
as its member state of origin and which is not an SME must notify this to the company and to
the Consob (Italian securities market authority).
On the basis of reports received, at the date of this report, investments of greater than 2%
were as follows:
- Silchester International Investors LLP, with 5.123% of the share capital held for asset
management purposes (reported on 4th November 2015);
- BlackRock Inc., with 4.998% of the share capital held through its asset management
companies (reported on 8th February 2016);
49*
-
Cassa di Risparmio di Cuneo Foundation with 2.230%3.
Paragraphs 7 and 8 of article 119 bis (“Exemptions”) of the Issuers’ Regulations state that asset
management companies and qualified parties who have acquired investments of greater than 2% and less
than 5% of the share capital of a listed issuer as part of their management activities are not required to
make reports to the Consob and the investee. This exemption also applies to non-EU investors on condition
that in their country of origin they are subject, as part of their asset management activities, to forms of
supervision by government control authorities or by a government-recognised authority.
On the basis of reports received from financial intermediaries, total shareholders of UBI Banca
numbered over 147 thousand on the ex dividend date (18th May 2015).
Furthermore, according to the results of the most recent survey of shareholders concluded in
August 2015, institutional investors identified by name held around 40% of the share capital
of UBI Banca.
Finally, the Report on Corporate Governance and Ownership Structure attached to this
publication and also published on the corporate website at www.ubibanca.it (corporate
governance section, under corporate documents), where the main features of the systems for
the management of risk and internal control are illustrated, may be consulted for other
information pursuant to article 123-bis of the Consolidated Finance Act Consolidated Finance
Act, which includes compliance with the Corporate Governance Code for listed companies
established by Borsa Italiana and public access to the relative information.
Treasury shares
As at 31st December 2015 UBI Banca held 1,431,829 treasury shares, with no nominal value,
for the sole purpose of servicing incentive schemes for the “Key Personnel” of the Group
(compared with 1,483,192 at the end of 2014) accounting for 0.16% of the share capital.
The reduction was caused by the grant on 1st July of 51,363 treasury shares consisting of the
“up-front” part of the 2012 incentive scheme to be paid in financial instruments, because the
relative two-year retention period had ended.
Treasury shares existing at the end of the year included 666,958 already promised as follows:
 131,277 shares for the deferred portion of the 2011 short-term incentive scheme;
 34,242 shares for the deferred portion of the 2012 short-term incentive scheme;
 99,512 shares for the 2013 short-term incentive scheme;
 259,708 shares for the 2014 short-term incentive scheme;
 142,219 shares estimated on the basis of preliminary figures subject to modifications, in
relation to the 2015 short-term incentive scheme.
The remaining shares (764,871) will be used to service the long-term incentive scheme
introduced in 2015, subject to this qualifying for share grants.
In consideration of the availability described above, it was not necessary to proceed to the purchase of a
further maximum 1,000,000 ordinary shares of UBI Banca as approved by a Shareholders’ Meeting on 25th
April 2015.
De jure and delegated powers of the corporate bodies
Information concerning the powers of the governing bodies of Unione di Banche Italiane Spa,
as required under Consob (Italian securities market authority) Recommendation No. 97001574
of 20th February 1997 is contained in the “Report on corporate governance and the ownership
structure of UBI Banca” attached to this publication.
3 Investment calculated on the basis of the current share capital (the original investment reported was 2.278%, generated as a result
of the merger of Banca Lombarda e Piemontese in April 2007.
50*
Other information
Litigation
Information is reported on UBI Banca tax litigation in the Notes to Financial Statements, Part
B – Section 12 of Liabilities. On the other hand, the corresponding section in the Part E of the
Notes to the Financial Statements may be consulted for details of other litigation.
Complaint management
The organisational model adopted by the UBI Banca Group for complaint management assigns
responsibility to the Parent for the direct management of the complaints regarding it and those
relating to the former B@nca 24-7’s activities as a result of the merger that took place in 2012
and to the former Centrobanca, merged in 2013. As concerns the credit card segment for
which the UBI Banca is the issuer, UBI Banca makes recourse to a specialist partnership with
CartaSì for first instance management.
With regard to the network banks and product companies, the Parent plays the role of policymaking, co-ordination and support for units responsible for complaints management.
UBI Banca received 5,353 official complaints in 2015 (8% more than the year before): they
mainly involved the credit card segment with 3,682 first instance complaints managed by the
CartaSì service and financing business with 1,661 first instance complaints. The small
remaining number related to other products and services.
During the year UBI Banca processed a total of 5,488 complaints, amounting to approximately
99% of the complaints managed, with approximately 71% resolved in favour of customers, an
increase compared with 63% recorded the previous year and a total amount paid out, down by
5% compared with 2014.
While the response times to complaints are already well within the limits set by the regulations
in force, they nevertheless improved further, down from 17 to 15 days on average.
The composition of complaints on the basis of the product and/or service supplied clearly
reflects the Parent’s business areas with a concentration in the two groups mentioned above.
Complaints by product/service
0%
10%
20%
30%
40%
50%
60%
70%
80%
90%
100%
68.78%
Payment cards managed by CARTASì
31.03%
Loans and mortgages
Insurance products
0.09%
Securities and investment services
0.04%
Current and deposit accounts
0.02%
Collection and payment services
0.02%
Other
0.02%
Credit and debit cards
0.00%
General aspects
0.00%
2015
51*
Furthermore, analysis of the underlying reasons for disputes reveal the picture summarised in
the chart below, where the item “other” is composed almost entirely of credit card complaints
not attributable to fraud or loss.
Complaints by grounds
0%
10%
20%
30%
40%
70%
80%
90%
100%
22.04%
Other
Reports to the centrale rischi (central credit bureau)
60%
25.37%
Application of conditions
Conditions
50%
46.95%
Frauds and losses
3.38%
1.44%
Execution of transactions
0.49%
Communication and information to customer
0.21%
Creditworthiness or similar
0.06%
Compounding of interest
0.04%
Organisational aspects
0.04%
Personnel
0.00%
Equipment malfunctions
0.00%
2015
In addition to the management of the first instance complaints, complaints management also
involved cases requiring further action in the reporting period: 117 repeats, 367 appeals to the
Financial Banking Arbitrator (90% of which regarding “reimbursements” relating to salary
backed loans repaid in advance, even quite some years ago).
A total of 531 of all cases requiring further action were processed accounting for 96% of the
total managed, with 33 repeats accepted and 85 decisions from the Banking Financial
Arbitrator received in favour of the appellants.
Finally, UBI Banca processed 27 applications to the supervisory authorities (Bank of Italy and
Consob) and received 236 applications for mediation, compared with 206 in 2014. As many as
212 of these were processed with only twelve cases settled with payments made to the
customer.
52*
Principal risks and uncertainties to which
UBI Banca is exposed
As the Parent of the Group, UBI Banca is responsible for assessing capital adequacy at
consolidated level (ICAAP – Internal Capital Adequacy Assessment Process) and its duty is to
carry out the risk measurement, monitoring and management functions listed in the
corresponding section of the Consolidated Management Report, which may therefore be
consulted for a detailed description of these duties and also of the principal uncertainties.
Subsequent events and the business outlook
The main significant events occurring after the end of the year are reported in the notes to the
financial statements (Part A – Accounting Policies), in compliance with Bank of Italy Circular
No. 262 of December 2005 and subsequent amendments.
The corresponding section of the consolidated management report may be consulted for
information on the business outlook.
53*
Proposal for the allocation of profit for the
year and dividend distribution
Dear shareholders,
In compliance with article 2364 bis of the Italian Civil Code and article 44 of the Articles of Association,
we submit the following proposal for the allocation of profit and the declaration of a dividend:
Profit for the year
Euro
123,423,301.60
10% to the statutory reserve
Euro
-12,342,330.16
share allocated to the extraordinary reserve
Euro
-7,900,000.00
Remaining profit
Euro
103,180,971.44
available for charitable, humanitarian, social, cultural and artistic purposes pursuant to Art. 44 of the Articles
of Association
Euro
-1,547,714.57
Euro
101,633,256.87
change in the share allocated to the unavailable reserve pursuant to Art. 6, Legislative Decree No 38/2005 (*)
Euro
-2,552,306.20
from retained profit
Euro
48,601.92
Distributable profit
Euro
99,129,552.59
Euro 0.11 on each of the 900,316,743 ordinary shares with dividend entitlement from 1st January 2015 (**)
Euro
-99,034,841.73
to retained profit
Euro
94,710.86
(*) Net gains relate to non-negotiable financial instruments.
(**) Total outstanding shares on the date of the resolution by the Management Board, net of the 1,431,829 treasury shares held in portfolio on that same
date.
The Management Board has passed a resolution to submit a proposal to a Shareholders’
Meeting to distribute a dividend of €0.11 on each of the ordinary shares outstanding on the ex
dividend date (excluding treasury shares held in portfolio on that date) after statutory
allocations and an allocation of €7.9 million to the extraordinary reserve.
Payment of the dividend, if approved, shall take place from 25th May 2016 – against
presentation of coupon No. 18 – with ex dividend date of 23rd May 2016 and record date of 24th
May 2016.
According to the tax laws currently in force no entitlement to a tax credit exists on the
dividend. Depending on the type of beneficiary the dividend may form part of taxable income to
the extent provided for by law or it may be subject to a withholding tax at the rate in force
from time to time.
The total dividend payout will amount to €99 million drawn on the profit of the Parent after
legal and article of association allocations.
Bergamo, 10th February 2016
The Management Board
54*
Statement of the
Chief Executive
Officer and of the
Senior Officer
Responsible for
preparing the
corporate
accounting
documents
56*
Certification of the separate financial statements pursuant to Art. 81-ter of the Consob
Regulation 14th May 1999, No. 11971 and subsequent modifications and integrations
1. The undersigned Victor Massiah, Chief Executive Officer, and Elisabetta Stegher, Senior
Officer Responsible for preparing the company accounting documents of UBI Banca Spa,
having taken account of the provisions of paragraphs 3 and 4 of article 154 bis of
Legislative Decree No. 58 of 24th February 1998, hereby certify:


the adequacy in relation to the characteristics of the company and
the effective application
of the administrative and accounting procedures for the preparation of the consolidated
financial statements during the course of 2015.
2. The model employed
The assessment of the adequacy of the administrative and accounting procedures for the
preparation of the consolidated financial statements as at and for the year ended 31st
December 2015 was based on an internal model defined by UBI Banca Spa and developed in
accordance with the framework drawn up by the Committee of Sponsoring Organisations of
the Treadway Commission (COSO) and with the framework Control Objectives for IT and
related technology (COBIT) which represent the generally accepted international standards for
internal control systems.
3. Furthermore, it is certified that:
3.1 the separate financial statements:
a) were prepared in compliance with the applicable international financial reporting
standards recognised by the European Community in accordance with the Regulation
No. 1606/2002 (EC) issued by the European Parliament on 19th July 2002;
b) correspond to the records contained in the accounting books;
c) give a true and fair view of the capital, operating and financial position of the issuer
and of the group of companies included in the consolidation.
3.2 the management report comprises a reliable analysis of the performance, operating results
and position of the issuer, together with a description of the main risks and uncertainties to
which it is exposed.
Bergamo, 10th February 2016
Victor Massiah
(signed on the original)
Elisabetta Stegher
(signed on the original)
Chief Executive Officer
Senior Officer Responsible for
preparing the company accounting
57*
58*
Independent
Auditors’ Report
Deloitte & Touche S.p.A.
Via Tortona, 25
20144 Milano
Italia
Tel: + 39 02 83322111
Fax: + 39 02 83322112
www.deloitte.it
INDEPENDENT AUDITORS’ REPORT
PURSUANT TO ART. 14 AND 16 OF
LEGISLATIVE DECREE No. 39 OF JANUARY 27, 2010
To the Shareholders of
UNIONE DI BANCHE ITALIANE S.p.A.
Report on the Financial Statements
We have audited the accompanying financial statements of Unione di Banche Italiane S.p.A., which
comprise the balance sheet as at December 31, 2015, and the income statement, statement of
comprehensive income, statement of changes in equity and cash flow statement for the year then ended,
and the related explanatory notes.
Management Board’s Responsibility for the Financial Statements
The Management Board is responsible for the preparation of these financial statements that give a true
and fair view in accordance with International Financial Reporting Standards as adopted by the
European Union and the requirements of national regulations issued pursuant to art. 9 of Italian
Legislative Decree n° 38/2005.
Auditor’s Responsibility
Our responsibility is to express an opinion on these financial statements based on our audit. We
conducted our audit in accordance with International Standards on Auditing (ISA Italia) issued pursuant
to art. 11, n° 3, of Italian Legislative Decree 39/10. Those standards require that we comply with ethical
requirements and plan and perform the audit to obtain reasonable assurance about whether the financial
statements are free from material misstatement.
An audit involves performing procedures to obtain audit evidence about the amounts and disclosures in
the financial statements. The procedures selected depend on the auditor’s judgment, including the
assessment of the risks of material misstatement of the financial statements, whether due to fraud or
error. In making those risk assessments, the auditor considers internal control relevant to the entity’s
preparation that give a true and fair view of financial statements in order to design audit procedures that
are appropriate in the circumstances, but not for the purpose of expressing an opinion on the
effectiveness of the entity’s internal control. An audit also includes evaluating the appropriateness of
accounting policies used and the reasonableness of accounting estimates made by the Management
Board, as well as evaluating the overall presentation of the financial statements.
We believe that the audit evidence we have obtained is sufficient and appropriate to provide a basis for
our audit opinion.
Ancona Bari Bergamo Bologna Brescia Cagliari Firenze Genova Milano Napoli Padova
Palermo Parma Roma Torino Treviso Verona
Sede Legale: Via Tortona, 25 – 20144 Milano - Capitale Sociale: Euro 10.328.220,00 i.v.
Codice Fiscale/Registro delle Imprese Milano n. 03049560166 – R.E.A. Milano n. 1720239
Partita IVA: IT 03049560166
Member of Deloitte Touche Tohmatsu Limited
2
Opinion
In our opinion, the financial statements give a true and fair view of the financial position of Unione di
Banche Italiane S.p.A. as at December 31, 2015, and of its financial performance and cash flows for the
year then ended in accordance with International Financial Reporting Standards as adopted by the
European Union and the requirements of national regulations issued pursuant to art. 9 of Italian
Legislative Decree n° 38/2005.
Report on Other Legal and Regulatory Requirements
Opinion on the consistency of the management report and of certain information included in the report
on corporate governance with the financial statements
We have performed the procedures indicated in the Auditing Standard (SA Italia) n° 720B in order to
express, as required by law, an opinion on the consistency of the management report and of certain
information included in the report on corporate governance required by art. 123-bis, n° 4, of Italian
Legislative Decree n° 58/98, which are the responsibility of the Management Board of Unione di
Banche Italiane S.p.A., with the financial statements of Unione di Banche Italiane S.p.A. as at
December 31, 2015. In our opinion the report on operations and the information included in the report
on corporate governance referred to above are consistent with the financial statements of Unione di
Banche Italiane S.p.A. as at December 31, 2015.
DELOITTE & TOUCHE S.p.A.
Signed by
Marco Miccoli
Partner
Milan, Italy
March 2, 2016
This report has been translated into the English language solely for the convenience of international
readers.
62*
Separate Financial Statements
Balance sheet
(Amounts in euro)
ASSETS
10. Cash and cash equivalents
20. Financial assets held for trading
30. Financial assets designated at fair value
40. Available-for-sale financial assets
50. Held-to-maturity investments
31.12.2015
138,226,024
1,088,262,365
196,034,459
15,357,571,120
3,494,547,116
31.12.2014
160,329,705
1,544,834,504
193,167,320
18,066,883,031
3,576,951,039
60. Loans and advances to banks
70. Loans and advances to customers
80. Hedging derivatives
90. Fair value change in hedged financial assets
100. Equity investments
110. Property, plant and equipment
120. Intangible assets
130. Tax assets:
a) current
b) deferred
b1) of which pursuant to Law 214/2011
140. Non-current assets and disposal groups held for sale
15,489,215,471
21,901,389,590
592,409,422
4,637,297
9,657,400,663
615,660,596
409,807
1,529,552,973
364,733,642
1,164,819,331
1,127,174,370
2,032,444
14,055,649,000
23,330,320,961
647,972,267
5,582,820
9,624,010,808
634,178,193
409,807
1,688,729,594
331,161,797
1,357,567,797
1,234,948,850
507,355
699,981,137
70,767,330,484
642,338,795
74,171,865,199
LIABILITIES AND EQUITY
10. Due to banks
20. Due to custo mers
30. Debt securities issued
40. Financial liabilities held for trading
60. Hedging derivatives
31.12.2015
15,845,353,703
7,357,585,578
36,265,239,590
608,599,720
700,870,505
31.12.2014
19,140,417,449
7,065,270,452
36,545,667,992
722,180,510
937,017,919
80. Tax liabilities:
a) current
b) deferred
100. Other liabilities
110. Post employment benefits
120. Provisions for risks and charges:
a) pension and similar obligations
b) other provisions
130. Valu ation reserves
160. Reserves
170. Share premiums
180. Share capital
265,926,172
93,132,370
172,793,802
881,277,802
39,974,753
43,556,905
1,034,898
42,522,007
304,388,565
2,283,488,140
3,798,429,612
2,254,371,430
352,883,014
169,396,492
183,486,522
751,070,156
45,442,639
45,218,325
1,144,094
44,074,231
164,951,251
2,354,284,675
4,716,866,301
2,254,371,430
(5,155,293)
123,423,302
70,767,330,484
(5,340,225)
(918,436,689)
74,171,865,199
150. Other assets
Total assets
190. Treasury shares
200. Profit (loss) for the year
Total liabilities and equity
64*
UBI Banca - Notes to the Financial Statements
Income statement
(Amounts in euro)
2015
2014
10. I nterest and similar income
874,726,213
1,122,470,967
20. I nterest expense and similar
(888,319,337)
(1,026,027,263)
30. Net interest income (expense)
(13,5 93,124)
96,443,704
40. Fee and commission income
50. Fee and commission expense
93,412,001
83,473,946
(44,432,562)
(59,219,284)
60. Net fee and commission income
48,979,439
24,254,662
70. Dividends and similar income
80. Net trading income
249,430,480
276,488,601
25,902,404
33,670,433
90. Net hedging income (loss)
100. Income from disposal o r repurchase of:
a) loans and receivables
b) available-for-sale financial assets
c) held-to-maturity investments
d) financial liabilities
110. Net income on financial assets and liabilities designated at fair value
11,077,673
(8,068,567)
237,268,980
149,479,337
(4,250,058)
(9,324,152)
257,102,458
166,743,421
-
(52)
(15,583,420)
(7,939,880)
4,355,600
3,072,896
120. Gross income
563,421,452
575,341,066
130. Net impairment losses on:
(120,013,371)
(121,551,807)
(104,165,922)
(116,738,207)
a) loans and receivables
b) available-for-sale financial assets
(15,556,314)
(2,995,359)
(291,135)
(1,818,241)
443,408,081
(402,575,970)
453,789,259
(341,440,036)
a) staff costs
(183,099,081)
(169,969,568)
b) other administrative expenses
(219,476,889)
(171,470,468)
d) other financial transactions
140. Net financial income
150. Administrative expenses
160. Net provisions for risks and charges
170. Net impairment losses on property, plant and equipment
190. Other operating income/(expense)
200. Operating expenses
210. Profits (lo sses) of equity investments
240. Profits on disposal of investments
6,955,464
(310,860)
(21,453,802)
(21,503,361)
117,589,578
120,160,606
(299,4 84,730)
(243,093,651)
1,551,054
(1,122,126,159)
43,194
60,874
250. Profit (loss) from continuing operations befor e tax
260. Taxes on profit for the year from continuing operations
145,517,599
(22,094,297)
(911,369,677)
(7,067,012)
270. Post tax profit (loss) from continuing operations
290. Profit (loss) for the year
123,423,302
123,423,302
(918,436,689)
(918,436,689)
65*
UBI Banca - Notes to the Financial Statements
Statement of comprehensive income
(Amounts in euro)
2015
10. Profit (loss) for the year
Other comprehensive income ne t of taxes without transfer to the
income stateme nt
40. Def ined benefit plans
Other comprehensive income ne t of taxes with transfer to the
income stateme nt
90. Cash flow hedges
2014
123,423,302
( 918,436,689)
1,290, 592
(2,579,898)
(101, 894)
100. Available-for-sale fina ncial assets
138,248,616
310,095, 115
130. Total ot her comprehensive income net of ta xes
139,437,314
307,515,217
140. Comprehensiv e income (loss) (item 10 + 130)
262,860,616
( 610,921,472)
The profit recognised for “Other comprehensive income” is principally attributable to fair value
reserves for debt securities classified within item 40 – available-for sale financial assets. Details of
the various items are given in the notes to the detailed statement contained in Part D –
Comprehensive Income.
66*
UBI Banca - Notes to the Financial Statements
Statement of changes in equity
Changes to 31st December 2015
C hanges du ring the year
A llocation of prior year profit
Restate-men t
of opening
balances
Balances as at
31.12.2014
Equ ity tran saction s
Balances as at
01.01.2015
Dividend s an d other Ch anges in res erves
us es
R eserves
Amo unts in euro
Sh are capital:
2,254,371,430
Extraordinary
distrib ution of
dividends
Repu rchase of
treasu ry shares
New share issu es
Chan ge in eq uity
ins tru men ts
D erivatives on
treas ury sh ares
Eq uity as at 31.12.2015
Compreh en sive
in come
Stock
op tions
2,254,371,430
2,254,371,4 30
2,254,371,430
-
2,254,371,430
-
-
-
-
-
-
-
-
-
-
2,254,371,4 30
b) other shares
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Sh are p remiu ms
4,716,866,301
-
-
-
-
-
-
-
-
3,798,429,6 12
Reserves:
2,354,284,675
-
1,606,028,4 27
-
677,459,7 13
139,437,314
304,388,5 65
a) ordinar y shares
a) retained earnings
b) other
Valuation reserves
Equity in struments
Treasu ry shares
Profit (loss) for the year
Equity
4,716,866,301
-918,436,689
-
-
2,354,284,675
-
-72,021,230
1,224,695
-
1,678,049,657
-
1,678,049,657
-
-72,021,230
-
-
-
-
-
-
-
676,235,018
-
676,235,018
-
-
1,224,695
-
-
-
-
-
-
164,951,251
164,951,251
2,283,488,1 40
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-5,340,225
-
-5,340,225
-
-
184,932
-
-
-
-
-
-
-
-5,155,2 93
-918,436,689
-
-918,436,689
918,436,689
-
-
-
-
-
-
-
-
123,423,302
123,423,3 02
8,566,696,743
-
8,566,696,743
-
-72,021,230
1,409,627
-
-
-
-
-
-
262,860,616
8,758,945,7 56
67*
UBI Banca - Notes to the Financial Statements
Statement of changes in equity
Changes to 31st December 2014
Chan ges d urin g th e year
A llocation of prior year profit
Restate-men t
of opening
balances
Balances as at
31.12.2013
Equ ity transactions
Balances as at
01.01.2014
Dividend s an d other Ch anges in res erves
us es
R eserves
Amo unts in euro
Sh are capital:
2,254,371,430
R ep urchas e of
treasu ry sh ares
New share issu es
Eq uity as at 31.12.2014
Extraord in ary
d is tribu tion of
d ivid en ds
Ch ange in equity
in struments
Derivatives on
treasu ry shares
C omprehens ive in come
St ock
options
2,254,371,430
2,254,371,430
2,254,371,430
-
2,254,371,430
-
-
-
-
-
-
-
-
-
-
2,254,371,430
-
-
-
-
-
-
-
-
-
-
-
-
-
-
Sh are p remiu ms
4,716,866,301
-
-
-
-
-
-
-
-
-
-
Reserves:
2,337,923,506
a) ordinary shares
b) other shares
a) retained earnings
b) other
Valuation reserves
Equity in struments
Treasu ry shares
Profit (loss) for the year
Equity
4,716,866,301
-
2,337,923,506
16,395,490
-34,321
-
4,716,866,301
2,354,284,675
1,661,654,167
-
1,661,654,167
16,395,490
-
-
-
-
-
-
-
-
-
676,269,339
-
676,269,339
-
-
-34,321
-
-
-
-
-
-
-
676,235,018
307,515,217
164,951,251
-142,563,966
-142,563,966
1,678,049,657
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-6,120,840
-
-6,120,840
-
-
780,615
-
-
-
-
-
-
-
-5,340,225
71,339,741
-
71,339,741
-16,395,490
-54,944,251
-
-
-
-
-
-
-
-918,436,689
-918,436,689
9,231,816,172
-
9,231,816,172
-
-54,944,251
746,294
-
-
-
-
-
-
-610,921,472
8,566,696,743
68*
UBI Banca - Notes to the Financial Statements
Statement of cash flows (indirect method)
2015
2014
amou nts in euro
A. OPERATING ACTIVI TIES
1. Or di nary activities
-185,251,239
781,680,249
- profit (los s) for the year (+/-)
- gains /losses on financial assets held for trading and financial as sets/liabilities designated at fair value (-/+)
123,423,302
9,389,275
-918,436,689
28,985,742
- gains /losses on hedging ac tivities (-/+)
- net impairment losses on loans (+/ -)
-11,077,673
120,013,371
8,068,567
121,551,807
- net impairment losses on property, plant and equipment and intangible assets (+/-)
21,453,802
21,503,361
- net provisions f or risks and c harges and ot her expense/income (+/-)
-6,955,464
310,860
- outstanding taxes and duties (+)
22,094,297
7,067,012
- net impairment losses on groups of assets held f or disposal net of t ax (+/ -)
- net impairment losses/revers als on equit y investments (+/-)
-
- other adjustments (+/-)
1, 255,741,179
-463,592,149
256,888,410
3,330,278,760
-771,462,295
443,324,620
836,030
696,349,883
18,054,717
- available-for-sale financial assets
- loans to banks: repayable on demand
- loans to banks: ot her loans
2,849,733,672
-1,433,265,442
-2, 213,249,797
-563,960,816
- loans to cust omers
- other ass ets
1,321,407,400
148,242,480
1, 720,154,633
-428,810,915
-3,298,271,704
517,626,470
2. Net cash fl ows fr om /used by financial assets
- financial assets held f or trading
- financial assets designated at f air value
3. Net cash fl ows fr om /used by financial liabil ities
- amounts due to banks repayable on demand
-
- amounts due to banks: other payables
-
-3,190,247,762
-5, 067,236,436
- due to customers
- debt securities is sued
292,047,689
-165,824,553
-154,937,324
5, 873,471,143
- financial liabilities held f or trading
-113,580,790
-784,549,956
- financial liabilities at fair value
-
- other liabilities
Cash flows generated/ used by operati ng activities
-
-120,666,288
650,879,043
-153,244,183
527,844,424
240,951,451
3, 534,523,054
B. I NVESTING ACTIVITIES
1. Cash flows from
- disposals of equity invest ments
- dividends received on equity invest ment s
- disposals of held-to-mat urity financial ass ets
- disposals of plant. property and equipment
- disposals of int angible assets
- disposals of lines of businesses
401,000
265,108,000
240,546,702
-
268,301,013
3, 000,000,000
3,749
-
1,114,041
-
-
2. Cash flows used in
-37,789,719
- purchases of equity investments
-35,454,150
- purchases of held-to-maturity investments
-
- purchases of plant, property and equipment
-2,335,569
- purchases of intangible assets
-
- purchases of lines of business
-
Net cash fl ows fr om /used in investing activi ties
203,161,732
-3, 999,020,998
-452,343,462
-3, 543,158,750
-3,518,786
-464,497,944
C. FI NANCING ACTIVITIES
- issues/purchases of treas ury shares
-
-
- issues/purchases of equity instruments
- dist ribution of dividends and ot her uses
-72,021,230
-54,944,251
Net cash fl ows fr om /used in financing activities
-72,021,230
-54,944,251
CASH FLOWS GENERATED/ USED DURING THE YEAR
-22,103,681
8,402,229
Key: (+) generated (-) absorbed
69*
UBI Banca - Notes to the Financial Statements
Reconciliation of the statement of cash flows
Balance sheet items
2015
2014
Cash and cash equivalent s at the beginning of the year
160,329,705
151,927,476
Total net cash flows generated/used during the year
-22,103,681
8,402,229
Cash and cash equivalent s: effect of changes in exchange rates
Cash and cash equivalent s at end of year
138,226,024
160,329,705
70*
UBI Banca - Notes to the Financial Statements
Part A – Accounting policies
A.1 – General part
A.2 – Main balance sheet items
A.3 – Information on transfers between portfolios of financial assets
A.4 - Information on fair value
A.5 – Information on “day one profit/loss”
Part B – Notes to the balance sheet
Assets
Liabilities
Other information
Part C – Notes to the income statement
Part D – Comprehensive income
Notes to the
Part E – Information on risks and the relative hedging policies
Separate
Part F – Information on equity
Financial statements
Part G – Business combination transactions concerning companies or lines of business
Part H – Transactions with related parties
Part I – Share-based payments
Part L - Segment Reporting
The figures contained in the tables in the notes to the financial statements
are stated in thousands of euro, unless specified otherwise.
71*
UBI Banca - Notes to the Financial Statements
Part A - Accounting policies
A.1 – GENERAL PART
Section 1 Statement of compliance with international financial reporting
standards
This annual report has been prepared in compliance with the international financial reporting
standards (IFRS)1 issued by the International Accounting Standards Board (IASB) and with the
relative interpretations of the International Financial Reporting Interpretations Committee (IFRIC)
as endorsed by the European Commission and in force as at 31st December 2015, implemented in
Italian law by Legislative Decree No. 38/2005, which exercised the option under EC Regulation
1606/2002 concerning international accounting standards.
No exceptions have been made in the application of IFRS international accounting standards.
The separate financial statements consist of the balance sheet, income statement, statement of
comprehensive income, statement of cash flows, statement of changes in equity and the notes to
the financial statements and are accompanied by the management report on operations.
The management report on operations and the notes to the financial statements furnish
information required by international reporting standards, by law, by the Bank of Italy and by the
Commissione Nazionale per le Società e la Borsa (Consob – National Commission for Companies
and the Stock Exchange), in addition to other information which is not compulsory, but is
considered equally necessary for the purposes of a true and fair presentation of the accounts.
The proposed annual financial statements approved by the Management Board on 10th February
2016 and submitted to the Supervisory Board for approval on 8th March 2016, contain a
statement by the Chief Executive Officer and the Senior Officer Responsible pursuant to Art. 154
bis of Legislative Decree No. 58/1998 and they have been subjected to audit by the independent
auditors Deloitte & Touche Spa.
Section 2 Basis of preparation
These financial statements have been prepared in accordance with measurement criteria, adopted
on the basis of a going concern assumption and in compliance with accrual accounting principles,
the relevance of the information and the predominance of substance over form.
The financial statements have been clearly stated and give a true and fair view of the capital and
financial position, the result for the year, the changes in equity and the cash flows.
Unless otherwise indicated, the information contained in this annual report is expressed in euro
as the accounting currency and the financial information, the balance sheet and income
statement, the notes and comments and the explanatory tables are presented in thousands of
euro. The relative rounding of the figures has been performed on the basis of Bank of Italy
instructions.
The mandatory financial statements used in this annual report comply with those defined in Bank
of Italy Circular No. 262/2005 and subsequent amendments and additions. Therefore, for the
purposes of the presentation of these financial statements, the provisions pursuant to the fourth
1
Those standards and the relative interpretations are applied on the basis of events occurring that are disciplined
by them from the date on which their application becomes compulsory, unless specified otherwise. See the “List
of IAS/IFRS standards endorsed by the European Commission” for full details.
72*
UBI Banca - Notes to the Financial Statements
update of the aforementioned circular issued on 15th December 2015 by the Bank of Italy have
been observed2.
In addition to information on the accounts as at and for the period ended 31st December 2015,
these financial statements also provide the same comparative information as at and for the year
ended 31st December 2014 (which did not require adjustments with respect to the figures
published in those financial statements) and they do not include items for which there was no
data for the current and the previous year.
To complete the information, account was also taken of the following documents in the
preparation of this separate annual report:

the ESMA3 document of 27th October 2015, “European common enforcement priorities for
2015 financial statements”, designed to promote uniform application of IFRS to ensure
transparency and the proper functioning of financial markets by identifying certain issues
considered particularly significant for the 2015 financial statements of listed European
companies, in consideration, amongst other things, of current market conditions4;

the ESMA document of 27th October 2015, “Improving the quality of disclosures in the
financial statements” designed to underline the importance of providing information in financial
reports that takes account of both relevant and material aspects;

Consob Communication No. 0007780/16 of 28th January 2016 entitled “Communication
concerning issues of greater relevance to 2015 financial reports”, designed to call the attention of
the authors of financial reports to aspects underlined in the above-mentioned ESMA public
statement document, in relation to the disclosures that listed companies must make in their
financial reports as at and for the period ended 31st December 2015 and in future reports.
Accounting policies
The accounting policies contained in Part A.2 concerning the classification, measurement and
derecognition stages are essentially the same as those adopted for the preparation of the 2014
separate financial statements.
Where it is impossible to measure items in the financial statements with precision, the application
of those policies involves the use of estimates and assumptions which may have a significant
effect on the amounts recognised in the balance sheet and in the income statement.
The use of reasonable estimates forms an essential part of the preparation of financial statements
and we have listed here those items in the financial statements in which the use of estimates and
assumptions is most significant:

measurement of loans and receivables;

measurement of financial assets not listed on active markets;

measurement of indefinite useful life intangible assets and equity investments;

quantification of provisions for risks and charges;

quantification of deferred taxes;

definition of the depreciation and amortisation charges for property, plant and equipment
and intangible assets with finite useful lives;
2 More specifically, we report that with that update the information supplied in the notes to the financial
statements on the “quality of credit” now complies with the new definitions of non-performing financial assets
(termed “deteriorated” assets in previous financial reports) (solely as an example “unlikely to pay loans” and
“forborne exposures”), in line with the concepts of non-performing exposures and forborne exposures established
by the European Commission on the basis of a proposal from the EBA.
Furthermore:
 in Part E Information on risks and hedging policies, the tables relating to pledged assets provided in Section 3
“Liquidity risk” are no longer presented.
 in Part B Notes to the balance sheet and in Part E Information on risks and hedging policies of the notes to the
financial statements, changes have been made to rationalise the notes designed to make them easier to use and
understand and also to shorten the time required to prepare them.
3 European Securities Market Authority.
4 The priorities in terms of disclosures recommended by the ESMA for the 2015 financial statements are as follows:
 impact of the financial markets conditions on the financial statements;
 statement of cash flows and related disclosures;
 fair value measurement and related disclosures;
 possible impacts from the application of accounting standards soon to come into force.
73*
UBI Banca - Notes to the Financial Statements

measurement of the provision for post-employment benefits.
An adjustment may be made to an estimate following a change in the circumstances on which it
was based or if new information is acquired or yet again on the basis of greater experience.
A change in an estimate is applied prospectively and it therefore generates an impact on the
income statement in the year in which it is made and, if it is the case, also in future years.
No changes were made in 2015 to the criteria previously employed for estimates in the financial
statements as at and for the year ended 31st December 2014.
The following is reported with regard to changes in IFRS accounting standards.
International accounting standards in force from 2015
As already reported in the interim financial report, for the preparation of the 2015 Annual Report
some provisions relating to regulations issued by the European Union have come into force for the
first time. A brief report on the most relevant aspects is given:

No. 634/2014 which made the introduction of the interpretation IFRIC 21 “Levies”
compulsory as of the 2015 financial statements. The document in question addresses the
accounting treatment for a liability relating to a levy that is not a tax on income and therefore
does not fall within the scope of application of IAS 12. The accounting treatment of the liability
must comply with the provisions of IAS 37 “Provisions, contingent liabilities and contingent assets”.
IFRIC 21 gives clear details of: i) the obligating event which gives rise to a liability to pay a levy; ii)
when a liability to pay a levy must be recognised; iii) the effects of that interpretation on interim
financial reports (former IAS 34)5;

No. 1361/2014 which made amendments to accounting standards in accordance with
“Annual Improvements to IFRS: 2011-2013 Cycle” as part of the normal annual process to
improve them developed in the context of ordinary activities of rationalisation and clarification of
international accounting standards. The purpose of annual improvements is to address the
necessary issues concerning inconsistencies found in international reporting standards or to
clarify terms which are not of an urgent nature.
The amendments regard the following accounting standards:
IFRS 3 Business combinations
This amendment makes it clear that the formation of all types of joint arrangement, as defined by
IFRS 11, are excluded from the application of IFRS 3;
IFRS 13 Fair Value Measurement
This amendment makes clear that the exception contained in paragraph 48 of IFRS 13 concerning
the possibility of measuring the fair value of a net position (in cases where financial assets and
liabilities exist with positions which offset market or credit risks) applies to all contracts included
within the scope of application of IAS 39 (and in future of IFRS 9) regardless of whether it satisfies
the definition of financial assets and liabilities provided in IAS 32;
IAS 40 Investment Property
This amendment makes it clear that IFRS 3 and IAS 40 are not mutually exclusive and that
reference must be made to the specific instructions contained in the respective standards to
determine whether the purchase of a property falls within the scope of application of IFRS 3 or
IAS 40. An assessment must in fact be made to determine whether the acquisition of a property
investment constitutes the acquisition of an asset, a group of assets or even a business
combination in accordance with IFRS 3.
The adoption of the above-mentioned provisions has made no appreciable impacts on the financial
statements of UBI Banca.
5 The interpretation in question constitutes an important source of interpretation for defining the accounting
treatment to be applied to contributions to the Single Resolution Fund (SRF) and to the Deposit Guarantee
Schemes (DGS), under Directives 2014/59/EU and 2014/49/EU respectively, details of which are given in the
following Section 5 “Other aspects”.
74*
UBI Banca - Notes to the Financial Statements
International accounting standards with application subsequent to 2015
The provisions of some EU regulations come into force in 2016. The most relevant aspects are
given below.
On 17th December 2014 the European Commission endorsed the following regulations:

No. 28/2015 which introduces the 2010-2012 annual cycle of improvements to
international accounting standards developed in the context of ordinary activities to rationalise
and clarify international accounting standards.
The main changes regard the following:
IFRS 2 “Share-based payments”
Changes were made in the standard to the definitions of “vesting conditions” and “market
conditions” and further definitions of “performance conditions” and “service conditions” were added
previously included in the definition of “vesting conditions”;
IFRS 3 “Business combinations”
The amendment makes clear that a “contingent consideration” pursuant to IFRS 3 recognised as a
financial asset or liability (in accordance with IAS 39/IFRS 9) must be subject to subsequent
measurement at fair value at each reporting date and the changes in fair value are recognised
through profit or loss or through other comprehensive income on the basis of the requirements of
IAS 39 (or IFRS 9);
IFRS 8 “Operating segments”
The amendments require an entity to disclose judgements made by management in applying the
criteria for the aggregation of operating segments, including a description of the aggregated
segments and the economic indicators considered in determining whether the operating segments
share “similar economic characteristics”.
Furthermore, it is specified that the reconciliation between the total of the segment assets subject
to disclosure and the assets of the entity must be reported if the segment assets are reported
periodically to the chief operating decision-maker.
IAS 16 “Property, plant and equipment” and IAS “38 Intangible assets”
The amendments have eliminated the inconsistencies in the calculation of accumulated
depreciation when an item of property, plant and equipment, or an intangible asset is revalued (i.e.
when the option to value at cost is discarded in favour of the alternative option to measure at fair
value). The new requirements clarify that the gross carrying amount must be adjusted in a manner
consistent with the revaluation of the carrying amount of the asset and that the accumulated
depreciation must therefore be equal to the difference between the gross carrying amount and the
carrying amount net of the impairment recognised;
IAS 24 "Related party disclosures"
The new provisions clarify that where an entity provides key management personnel services to a
reporting entity, that entity is deemed a related party;

No. 29/2015 which amends IAS 19 “Employee benefits”.
The amendments are designed to regulate the recognition of employee (or third party)
contributions where defined benefit plans require them to contribute to the cost of the plan. In
fact in some countries pension plans require employees (or third parties) to contribute to a
pension plan.
The amendment makes it possible to only deduct contributions from personnel expenses that are
connected with the service provided in the period in which the service is provided6. Contributions
that are connected with the service, but vary on the basis of the duration of the service provided,
must be allocated to the period of service using the same method of allocation applied to the
benefits.
On 23rd November 2015 the European Commission endorsed Regulation (EU) No. 2113/2015
which endorses the amendments published by the IASB on 30th June 2014, to the accounting
standards IAS 16 “Property, plant and equipment” and IAS 41 “Agriculture”.
In the current version of the standard, contributions are deducted from personnel expense in the accounting
period in which they are paid.
6
75*
UBI Banca - Notes to the Financial Statements
While this amendment is of extremely little importance to a company in the banking sector, we
report that the amendment made consists of putting the accounting treatment for plants that are
used for the cultivation of farming products over a number of years, known as produce bearing
plants, on the same basis as that reserved for tangible assets dealt with in IAS 16 “Property, plant
and equipment”.
On 24th November 2015 the European Commission endorsed Regulation (EU) No. 2173/2015
which endorsed the amendments, published by the IASB on 6th May 2014, to the accounting
standard IFRS 11 “Joint arrangements”.
This amendment provides new guidelines on the accounting treatment for acquisitions of interests
in joint operations which constitute a business.
In other words, the standard as amended requires the application of the provisions of IFRS 3 in
terms of the purchase method for recognising the purchase of a joint operation, commensurate
naturally to the percentage interest acquired. On the basis of the “purchase method”, the
identifiable assets acquired (inclusive of any intangible assets previously not recognised by the
enterprise acquired) and the identifiable liabilities assumed (inclusive of the contingent liabilities)
must be recognised at their respective fair value on the acquisition date.
On 2nd November 2015 the European Commission endorsed Regulation (EU) No. 2231/2015
which endorsed the amendments published by the IASB on 12th May 2014 to accounting
standards IAS 16 “Property, plant and equipment” and IAS 38 “Intangible assets”.
The amendment in question clarifies when it might be appropriate to use depreciation methods
based on revenue or on the basis of a schedule that depreciates tangible and intangible assets on
the basis of revenue generated by the use of those assets.
On 15th December 2015 the European Commission endorsed Regulations (EU) No. 2343/2015
which introduces the 2012-2014 annual cycle of improvements to international accounting
standards. The main changes made regard the following:
IFRS 5 Non-current assets held-for-sale and discontinued operations
The amendment introduces specific guidance on IFRS 5 for cases where an entity reclassifies an
asset out of the held-for-sale class into the held-for-distribution class (or vice versa), or when the
requirements for the classification of an asset held-for-distribution are no longer met.
The amendments state that :
o
these reclassifications do not constitute a change to a plan (to sell or to distribute) and
therefore the classification and measurement criteria remain valid;
o
the assets that no longer meet the criteria for classification as held-for-distribution should
be treated in the same way as an asset that ceases to be classified as held-for-sale.
IFRS 7 Financial instruments: disclosures
The amendment regulates the introduction of further guidance to clarify whether a servicing
contract constitutes a remaining involvement in a transferred asset for the purposes of the
disclosures required in relation to transferred assets.
It further clarifies that disclosures on offsetting financial assets and liabilities are not explicitly
required for all interim financial statements, but that nevertheless those disclosures could be
necessary to comply with the requirements of IAS 34 in cases where the information is significant.
IAS 19 Employee benefits
The document clarifies that in order to determine the discount rate for post-employee benefits
reference must be made to high quality corporate bonds denominated in the same currency used
for the payment of the benefits and that the depth of the relative market should therefore be
assessed at currency level.
IAS 34 Interim financial reporting
The document introduces amendments in order to clarify that some information requested must
be included in interim financial statements or at least in other parts of the documents such as the
interim financial report but with the proviso that cross-references to that other section must be
given in the interim financial statement. In this last case the report must be made available to
readers of the financial statements in the same way and at the same time as for the interim
financial report, otherwise the latter is to be considered incomplete.
76*
UBI Banca - Notes to the Financial Statements
On 18th December 2015 the European Commission endorsed the following regulations:

No. 2406/2015 endorses the amendment published by the IASB on 18th December 2014
to accounting standard IAS 1 “Presentation of Financial Statements”. As part of the broader
process to improve financial reporting disclosures, the amendment in question makes limited
changes to IAS 1 designed to provide clarification on matters which might be perceived as an
impediment to the clear and intelligible preparation of financial reports;

No. 2441/2015 which endorses the amendment published by the IASB on 12th August
2014 to accounting standard IAS 27 “Consolidated and separate financial statements”. The
amendment in question introduces the possibility in the separate financial statements of the
investor to measure investments in subsidiaries, joint ventures or companies subject to
significant influence using the equity method.
The adoption of the above-mentioned provisions will have no appreciable impacts on the financial
statements of UBI Banca7.
International accounting standards not endorsed as at 31st December 2015
Principio (IAS/IFRS)
Interpretation (SIC/IFRIC)
Amendments
Date of publication
IFRS 14
IFRS 15
IFRS 9
Regulatory deferral accounts
Revenue from contracts with customers
Financial Instruments
30/01/2014
28/05/2014
24/07/2014
IFRS 10, IAS 28
Sale contribution of assets between an investor and its Associate or
Joint Venture
11/09/2014
IFRS 10, IFRS 12, IAS 28
Investment Entities: applying the consolidation exception
18/12/2014
The standards listed above are not applicable for the purposes of the preparation of the 2015
separate annual report because their application is subject to endorsement by the European
commission through the issue of specific EU Regulations.
To provide full information we report that after 31st December 2015 the IASB issued the following:

on 13th January 2016, the accounting standard IFRS 16 “Leases” destined to replace IAS
17 “Leases” from the financial year 2019; and

on 19th January 2016, an amendment to IAS 12 “Recognition of deferred tax assets for
unrealised losses”;

on 29th January 2016, an amendment to IAS 7 “Disclosure initiative”.
Amendments to IAS 39
As already reported in the 2014 Annual Report, which may be consulted for full information, on
24th July 2014 the IASB issued the accounting standard IFRS 9 “Financial Instruments”, which
therefore brought to conclusion the process of the full revision of IAS 39 “Financial Instruments:
Recognition and Measurement”, divided into three stages:

“Classification and Measurement”;

“Impairment”; and

“General Hedge Accounting”8.
The standard in question, adoption of which will be compulsory from 1st January 2018 is still
going through the endorsement process by the European Commission as part of which the
7
With specific reference to the option introduced with regulation EU No. 2442/2015, by the amendment to IAS 27,
the UBI Group will consider whether to take this up during the current year.
8 For full information we report that in April 2014 the IASB published the discussion paper “Accounting for
Dynamic Risk Management: a Portfolio Revaluation Approach to Macro Hedging” which, in line with the dynamic
procedures for the management of interest rate risk adopted by banks, sets out a possible accounting approach (a
“portfolio revaluation approach”) designed to better reflect the dynamic management of risk by management in the
financial statements of an entity.
Following the observations received during the consultation stage, in July 2015 the IASB decided to assign the
“macrohedging” project to the relative research programme and it postponed publication of the Exposure Draft until
after a further discussion paper had been prepared.
77*
UBI Banca - Notes to the Financial Statements
European Financial Reporting Advisory Group (EFRAG) issued a favourable opinion on 4th May
20159.
Endorsement of the accounting standard is scheduled for the first half of 2016 and only after that
will it become applicable in the member states of the European Union.
The provisions of the new standard are summarised below.
Classification and measurement
IFRS 9 lays down the following criteria for the classification of financial assets10:
a) the business model of the company to manage financial assets; and
b) the characteristics of the contractual cash flows from the financial assets,
and on this basis it gives the following three categories in which they may be classified:

“Amortised Cost” (AC);

“Fair value through other comprehensive income” (FVOCI);

“Fair value through profit or loss (FVPL)”.
The “Amortised Cost” category
Financial assets held to collect their contractual cash flows are classified in this category.
The presence of sales activities is not necessarily inconsistent with the definition of a business
model required for classification in the “amortised cost” category. For example infrequent sales of
modest amount may take place as part of that business model if they are performed in cases of
increased credit risk11.
The “Fair value through other comprehensive income (FVOCI)" category
This category is for the classification of financial assets:

for which the contractual cash flows consist exclusively of the payment of principal and
interest;

held to collect the contractual cash flows and also cash flows from the sales of the assets.
This business model involves greater sales activity than that of the business model associated
with the “Amortised cost” category.
The interest income, gains and losses from exchange rate losses and write-downs due to
impairment of financial instruments classified in the FVOCI category together with reversals of
impairment losses are recognised through profit or loss, while other changes in fair value are
recognised through other comprehensive income (OCI).
At the time of sale (or possible reclassification into other categories due to a change of business
model), cumulative profits or losses recognised in OCI are reclassified through profit or loss.
The“fair value through profit or loss” category
Financial assets are classified and measured according to this criteria, that are not managed on
the basis of the two business models specified for the “amortised cost” and “fair value through
other comprehensive income” categories12.
For equity instruments only, an irrevocable option may be exercised on initial recognition for the
classification and measurement of the financial assets at FVOCI. Exercise of this option involves
recognising all changes in fair value within other comprehensive income (OCI) without the
possibility of reclassifying them through profit or loss (neither for impairment loss nor for
subsequent disposal). Dividends are recognised through profit and loss.
9
Body responsible for assessing the adoption of IFRS in Europe.
Financial assets are classified in their entirety, and therefore those that contain embedded derivatives are not
subject to bifurcation rules.
11 Nevertheless if the sales carried out by a company are not infrequent and of insignificant amount, it must be
considered within which limits that sales activity is consistent with a business model that consists mainly of
collecting contractual cash flows.
12 To complete the information given, the “OCI option” is available for this category, but only for equity instruments.
Under this option only dividends are recognised through profit or loss, while all other components whether fair
value movements or actually realised, inclusive of gains and losses realised on the sale of an asset, are recognised
within the statement of other comprehensive income (OCI).
10
78*
UBI Banca - Notes to the Financial Statements
As concerns financial liabilities, the provisions of IAS 39 have been reproduced almost entirely in
IFRS 9. As provided for by IAS 39, this standard allows financial liabilities to be measured on the
basis of the “fair value through profit or loss” criterion (i.e. the “fair value option”) in the presence
of determined conditions, providing for changes in the fair value of financial liabilities due to
changes in the credit rating of the issuer to be recognised through other comprehensive income
and no longer through profit or loss.
Impairment
The IFRS 9 model is forward-looking and requires immediate recognition of credit losses expected
during the lifetime of the financial instrument.
As opposed to IAS 39, according to which the measurement of credit losses is based solely on
those resulting from past events and current conditions, the IFRS 9 impairment model requires
an estimate of credit losses to be made on the basis of supportable information, that is available
without undue cost or effort and that includes historical, current and forecast information13.
As opposed to IAS 39, IFRS 9 has a single impairment model to be applied to different financial
instruments such as financial assets measured at amortised cost and those measured at fair
value through other comprehensive income.
More specifically, for financial assets that are not impaired when purchased (or originated) the
loss allowance for expected credit losses must be calculated by one of the following methods:
 basing it on the amount of the expected credit losses in the following twelve months (expected
losses resulting from default events on financial assets considered possible within twelve
months from the date of the end of the financial year). That method must be applied when the
credit risk at the balance sheet date is low or has not increased significantly since initial
recognition; or,
 basing it on the amount of the expected credit losses over the full lifetime of the instrument
(expected losses resulting from default events on financial assets considered possible over the
full lifetime of the financial asset). This method must be applied when the credit risk has
increased significantly since initial recognition and also for contractual assets and trade loans
and receivables which do not contain significant financial components on the basis of IFRS 15
definitions.
Hedge accounting
IFRS 9 contains provisions relating to what is termed the “general hedge accounting model”
designed to better reflect risk management policies.
To give examples, but not limited to these, the standard therefore broadens the range of risks for
which hedge accounting may be applied to non-financial assets, it eliminates the compulsory
quantitative effectiveness test and it no longer requires retroactive assessment of the effectiveness
of a hedge.
While more flexibility is introduced, the new standard requires even more detailed disclosure on
risk management activities by management.
For full information we report that in April 2014 the IASB published the discussion paper
“Accounting for Dynamic Risk Management: a Portfolio Revaluation Approach to Macro Hedging”
which, in line with the dynamic procedures for the management of interest rate risk adopted by
banks, sets out a possible accounting approach (a “portfolio revaluation approach) designed to
better reflect the dynamic management of risk by management in the financial statements of an
entity.
Following the observations received during the consultation stage, in July 2015 the IASB decided
to assign the “macrohedging” project to the relative research programme and it postponed
publication of the Exposure Draft until after a further discussion paper had been prepared.
The standard defines expected credit losses as the “weighted average of credit losses with the respective risks of a
default occurring as the weights”.
Expected losses must be estimated by considering possible scenarios and therefore by considering the best
available information on past events, current conditions and supportable forecasts of future events, known as a
“forward looking approach”.
13
79*
UBI Banca - Notes to the Financial Statements
The IFRS 9 project at UBI Banca
The importance of the future changes introduced by the new accounting standard appear quite
clear from the above, especially with regard to the expected loss model applicable to estimates of
the value of financial instruments.
As a consequence of this, and in consideration of the complexity of the implementation of the
standard in question, UBI Banca has taken part from the outset in a project run by the Italian
Banking Association and in the second half 2015 it launched its own transition project, the main
details of which are given below.
The architecture of the project runs along three lines of activity:
1. assessment: the aim is to assess the potential impacts of the new standard with respect to
regulatory aspects, risk models, administration, organisation, IT software and business;
2. design: aimed in particular at defining detailed specifications in IT and organisational
terms;
3. implementation: aimed at the implementation and execution of the actions identified and
defined in the previous stages of the project.
Assessment activity is currently in progress at present. It will probably come to a close by the end
of the first quarter of 2016 and the main results can be summarised as follows:
 identification of regulatory and accounting modifications and the consequent preliminary
definition of accounting practices for the necessary aspects;
 identification of the preliminary impacts in terms of business, risk models, organisation
and IT systems;
 definition of criteria for the recognition and transfer of financial instruments and for loans
in particular, among the three stages laid down by IFRS 9 on the basis of credit quality,
with consequent different estimates of the value of the instrument (twelve month expected
credit loss vs. lifetime expected credit loss).
The studies conducted so far with the project confirm the significance of the changes introduced
by the new standard in relation to the impairment model applicable to all financial assets (except
for those recognised at FVPL). This lends weight as a consequence to the expectation held by the
whole national and international banking industry that the degree of write-downs will increase
compared with those estimated with the model currently in use, especially with regard to financial
assets that have not defaulted14, or in other words those located in stages one and two as defined
in the standard.
On the other hand there are no significant expectations of asset reclassifications on the basis of
the provisions for the classification of financial assets contained in IFRS 9.
As already stated, the project will continue with design activity in the second half and
subsequently with implementation. Future interim financial reports will provide information on
this.
IFRS 15 “Revenue from Contracts with Customers”
It is reasonable to consider that, within the meaning of IFRS 9, defaulted financial instruments will be placed in
stage three. Application of the lifetime expected credit loss model is conceptually similar to the model currently in
use for measuring write-downs on a case-by-case basis.
14
80*
UBI Banca - Notes to the Financial Statements
On 28th May 2014 the IASB published the standard IFRS 15 which from 1st January 2018 will
replace15 the standards IAS 18 “Revenue” and IAS 11 “Construction contracts”, as well as the
interpretations IFRIC 13 “Customer loyalty programmes”, IFRIC 15 “Agreements for the
construction of real estate”, IFRIC 18 “Transfers of assets from customers” and SIC 31 “Revenue –
Barter transactions involving advertising services”.
The standard establishes new procedures for the recognition of revenue, which will apply to all
contracts entered into with customers except for those that fall within the scope of application of
other IFRS standards such as leases, insurance contracts and financial instruments.
The fundamental steps in the accounting treatment of revenues according to the new standard
are as follows:

the identification of a contract with the customer;

the identification of the performance obligations of the contract;

determination of the price;

allocation of the price to the performance obligations of the contract;

the criteria for the recognition of revenue when an entity satisfies each performance
obligation.
The main components of UBI Banca’s revenues do not fall within the scope of application of IFRS
15, because they are regulated by the provisions of IAS 39 (and IFRS 9).
As concerns those components of revenues of a fee and commission nature that do not fall
within the scope of application of IAS 39 or IFRS 9, assessments must be carried out on first time
adoption of IFRS 15 to determine the following:

the prices of the relative transactions including the variable components, which must be
allocated to one or more performance obligations; and

whether the performance obligations are satisfied “over time” or at a “point in time”.
Furthermore, the presentation of revenue on a gross or net basis will depend on an analysis of
the “principal” or “agent” role played by the entity in the transaction.
At present, while waiting to start a detailed analysis of contracts with customers, it is not
possible to provide a reasonable estimate of the impacts resulting from the application of the
standard, which UBI Banca expects will not be significant.
Section 3 Subsequent events
With regard to the provisions of IAS 10, subsequent to 31st December 2015, the reporting date,
and until 10th February 2016, the date on which the proposed Annual Report was authorised by
the Management Board for submission to the Supervisory Board, no events occurred to make
adjustments to the figures presented in the report necessary.
For information purposes, the following events are mentioned:

on 19th January 2016 UBI Banca received authorisation and a licence from the Federal
Reserve and from New York State Department of Financial Services to open a representative
office in New York. The official opening took place on 20th January 2016;

on 25th January 2016, with the presentation of the necessary information to trade unions,
UBI Banca commenced negotiation procedures regarding the refinement and optimisation of
the Group’s organisational structure. Further details are given in the section “Significant
events occurring in 2015” in the Consolidated Management Report;

on 26th January 2016 UBI Banca communicated the results of the option and pre-emption
offering at a price of €7.2880 each on the 35,409,477 shares of the Bank subject to
withdrawal following the transformation into a joint stock company (the offering closed on
While early application is allowed, it is underlined that as can be seen from the table which lists accounting
standards issued but not yet endorsed as at 31st December 2015, the standard has not yet been endorsed by the
European Commission. At present endorsement is expected for the second half of 2016.
15
81*
UBI Banca - Notes to the Financial Statements
12th January). Requests were received to purchase 58,322 of these shares and the
remaining 35,351,155 shares on which options had not been taken up were offered on the
Mercato Telematico Azionario (“MTA” – electronic stock exchange) for one day on 28th
January 2016, but no shares were purchased. As a consequence, on 3rd February 2016
settlement of the trades of the 58,322 UBI Banca shares subject to the exercise of option
and pre-emption rights took place. The payment of the consideration for the shares
purchased as well as the assignment of the shares in favour of those holding those rights
took place through Monte Titoli and the respective intermediaries;

on 27th January 2016 a shareholders’ pact was stipulated entitled Patto dei Mille (“Pact of
the Thousand”) for the purpose of governing prior consultation between the holders of
syndicated shares, the exercise of voting rights attaching to the syndicated shares and some
limits on the circulation of these shares. The Patto dei Mille is open in nature and was
formed with a view to safeguarding the underlying principles which have characterised the
activities of Banca Popolare di Bergamo in enhancing the resources of the community in
which it is based. On 1st February 2016, 65 shareholders adhered to the pact, who as a
whole pledged 20,500,412 ordinary shares to it, accounting for 2.273% of the total voting
rights representing the share capital of UBI Banca.

on 8th February 2016, after obtaining Casablanca Finance City status, UBI Banca received
authorisation from the Moroccan Central Bank to open a representative office in
Casablanca.
Section 4 Other aspects
BRRD Directive (Bank Recovery and Resolution Directive – 2014/59/EU) and DGS Directive
(Deposit Guarantee Schemes – 2014/49/EU)
As already fully reported in the half year financial report for 2015 and making reference to the
section “European banking union” in the “Consolidated management report”, we report that with
regard to compliance with national and regulatory EU regulations the following EU directives are
of importance for the 2015 annual report:
 The BRRD Directive (Bank Recovery and Resolution Directive – 2014/59/EU) which defines the
new resolution rules applicable to all banks in the European Union from 1st January 2015.
The measures will be financed by the National Resolution Fund that has been paid into the Single
Resolution Fund (SRF) since 1st January 2016 and will be managed by the Single Resolution
Board (SRB).
 The DGS Directive (Deposit Guarantee Schemes – 2014/49/EU) is designed to strengthen
depositor protection and harmonise the regulatory framework at EU level and it requires all
member states to adopt ex-ante financing procedures.
In its 2015 financial statements, UBI Banca has recognised the following costs in the income
statement under the item “Other administrative expenses”16, in application of the
interpretation IFRIC 21 “Levies”, according to which the liability relating to the payment of a
levy, which the contributions in question can be classified as, arises at the time when the
“obligating event” occurs:
 €41.9 million in relation to the annual quota due to the National Resolution Fund.
More specifically, €10.5 million of this amount is attributable to the annual “ordinary
contribution” to the fund mentioned and €31.4 million relates to the “extraordinary
contribution” requested by the fund in the maximum amount allowed under Art. 83 of
16
In this respect, the national supervisory authority also made an announcement in a communication dated 19th
January 2015 with specific regard to BRRD costs, stating that these expenses related to forms of contribution
considered on a par with levies from an accounting viewpoint.
82*
UBI Banca - Notes to the Financial Statements
Legislative Decree No. 180/2015, which is three times the average annual amount of the
ordinary contributions. The latter contribution was due to the measures taken by the fund for
the resolution of the crises of the following banks: Banca Marche, Banca Popolare dell’Etruria e
del Lazio, Cassa di Risparmio di Ferrara and CariChieti all in extraordinary administration;
 €2 thousand, in relation to the quota for the year 2015, accruing for one half-year period only
in accordance with the DGS Directive.
Since the procedures for the national implementation of the directive had not been completed,
these contributions were requested by the Interbank Deposit Protection Fund (IDPF), after first
making amendments to its constitution which basically introduced the new financing mechanism
in advance.
The aforementioned amendments also introduced a voluntary provision (“voluntary scheme”) in
addition to that regulated by Directive 49, designed to support banks in extraordinary
administration or conditions of great difficulty where concrete turnaround prospects are found
and measures adopted by the Bank of Italy have been taken designed for the reduction and/or
conversion of capital instruments into Common Equity Tier 1 capital.
Adherence on a voluntary basis to the scheme involves signing up to a two-year maximum
industry-wide commitment of €300 million. The request to make that commitment is taken on the
basis of decisions made by the governance of the scheme in a manner totally independent and
separate from the obligatory scheme and is at the moment made only with regard to intervention
made by the sector nationally in the years 2013 and 2014 to assist Banca Tercas, for a total of
€295 million, if the European commission should consider the operation as “state aid”.
In this respect we report that the intervention will not involve any further costs for UBI, over and
above those already incurred in the aforementioned years totalling €4 thousand, because the
funds raised by means of the voluntary scheme would essentially replace those already paid by
the Interbank Deposit Protection Fund and returned in the meantime by Banca Tercas.
Finally to complete this information we report that the 2016 Legge di stabilità (“stability law” –
annual finance law) created a solidarity fund designed to reimburse investors holding
subordinated financial instruments issued by the four banks subject to resolution procedures.
While at present the relative ministerial decrees that will define and regulate the contribution are
still in the pipeline, we report that in future the fund in question, which will amount to up to €100
million, will receive its financing from the Interbank Deposit Protection Fund.
Leaving incentives – Company reorganisation
The programme of rationalisation initiatives, connected, amongst other things, with containing
operating costs is fully described in the section “Significant events that occurred during the year”
in the Management Report, which may be consulted.
With particular regard to the redundancy scheme, as concerns the more strictly accounting
aspects of the operation, procedures relating to trade union negotiations were concluded on 23rd
December 2015, with an agreement containing provisions for the voluntary early retirement of
around 51 staff.
In relation to the aforementioned programme, an expense of €13.3 million was recognised in the
income statement for 2015 under the item “staff costs” net of non-significant discounting to
present values and subject to normalisation given the non-recurring nature of the item. These
expenses were composed as follows:

€7.6 million against the item “other liabilities” on the basis of the final nature of the amount
because it relates to staff who had already applied to participate in the previous redundancy
scheme and were surplus to it;

€5.7 million against the item “Provisions for risks and charges”, because it related to staff
whose application approval will be finalised in February 2016.
Impairment of available-for-sale securities
In the 2015 financial statements, the fair value measurement of available-for-sale securities
resulted in the recognition of impairment losses through profit and loss of approximately €15.6
million. More specifically we report that €13.6 million of this was attributable to the write-down of
83*
UBI Banca - Notes to the Financial Statements
two Lower Tier 2 subordinated securities issued by Banca Popolare dell’Etruria e del Lazio and
Banca delle Marche.
We report in this regard that the solution to the crisis of the four banks in extraordinary
administration (Banca Marche, Banca Popolare dell’Etruria e del Lazio, Cassa di Risparmio di
Ferrara and CariChieti) that the government and the Bank of Italy found in order to turn them
around and ensure that their business operations continued allowed the full protection of savings
held in the form of deposits, current accounts and ordinary bonds and the losses accumulated by
the aforementioned banks to be absorbed in the first instance by the highest risk financial
instruments such as shares and subordinated bonds.
In this respect the Bank of Italy communication dated 22nd November 2015 stated that “Recourse
to shares and subordinated bonds to cover losses is expressly required as a precondition for the
solution of banking crises by European regulations (‘Bank Recovery and Resolution Directive –
BRRD’) implemented in Italian law on 16th November 2015 with Legislative Decree No. 180/2015”.
On the basis of the above, from an accounting viewpoint the carrying amount of the subordinated
bonds in question was written off in the fourth quarter as summarised below.
(figures in millions of euro)
bond
B.ca Popolare Etruria 06/16 TV
B.ca delle Marche 05/15 TV
nominal
value
maturity
date
total loss
recognised
through profit
and loss
of which
in the 2015
of which
in prior
years
carrying amount
as at 31.12.2015
10.0
14.07.2016
10.0
10.00
0.00
0.00
5.0
22.12.2015
5.0
3.63
1.37
0.00
The national consolidated tax option
The Testo Unico delle Imposte sui Redditi (Consolidated Income Tax Act) grants the option for
companies belonging to the same Group to calculate a single total income corresponding,
generally speaking, to the algebraic sum of the taxable income of the different companies (the
Parent and companies directly and/or indirectly controlled by more than 50% according to certain
requirements) and as a consequence to calculate a single tax on the income of the companies in
the Group (known as a “national tax consolidation”, regulated by articles 117-129 of the
Consolidated Income Tax Act).
In view of this option, the Italian companies in the Group adhered to the national tax
consolidation of the Parent, UBI Banca, and calculated the tax expense relating to them by
transferring the corresponding taxable income to the Parent.
84*
UBI Banca - Notes to the Financial Statements
A.2 – THE MAIN ITEMS IN THE FINANCIAL STATEMENTS
1. Financial assets and liabilities held for trading and financial assets and
liabilities designated at fair value
This category includes:
1.1.
Definition of financial assets and liabilities held for trading
A financial asset or liability is classified as held for trading (at fair value through profit or loss –
FVPL) and is stated within either item 20 “Financial assets held for trading” or item 40 “Financial
liabilities held for trading”, if it is:



acquired or incurred for sale or repurchase in the short term;
part of a portfolio of identified financial instruments which are managed together and for
which there is evidence of a recent and effective strategy of short term profit taking;
a derivative (except for derivatives designated and effective as a hedging instrument – see
the relative section below).
1.1.1.
Derivative financial instruments
A “derivative” is defined as a financial instrument or other contract with the following
characteristics:



its value changes in response to the change in an interest rate, in the price of a financial
instrument, in a commodity price, in a foreign currency exchange rate, in a price, interest
rate or credit rating index, or credit worthiness index or other specific variable;
it requires no initial investment, or a net initial investment that is smaller than would be
required for other types of contract from which a similar response to changes in market
factors would be expected;
it is settled at a future date.
The Bank holds derivative financial instruments for both trading and for hedging purposes (see
the relative section below for information on the latter).
1.1.2.
Embedded derivative financial instruments
An "embedded derivative financial instrument" is defined as a component of a hybrid (combined)
instrument which also includes a “host” non derivative contract such that some of the cash flows
of the combined instrument behave in a way similarly to the derivative as a stand-alone
instrument. The embedded derivative is separated from the host contract and treated in the
accounts as a stand-alone derivative if and only if:

the economic risks and characteristics of the embedded derivative are not closely related to
the economic risks and characteristics of the host contract;

a separate instrument with the same conditions as the embedded derivative would satisfy
the definition of a derivative;

the hybrid (combined) instrument is not recognised within financial assets or liabilities held
for trading.
1.2.
Definition of financial assets and liabilities designated at fair value
Financial assets and liabilities may be designated on initial recognition within “financial assets
and liabilities designated at fair value” and recognised within items 30 “Financial assets
designated at fair value” and 50 “Financial liabilities designated at fair value”.
A financial asset/liability is designated at fair value through profit or loss on initial recognition
only when:
a) it is a hybrid contract containing one or more embedded derivatives and the embedded
derivative significantly alters the cash flows that would otherwise be generated by the contract;
85*
UBI Banca - Notes to the Financial Statements
b) the designation at fair value through profit or loss allows better information to be provided
because:
 it eliminates or considerably reduces an asymmetry in the measurement or in the recognition,
which would otherwise result from the valuation of assets or liabilities or from recognition of
the relative profits and losses on a different basis;
or
 a group of financial assets, financial liabilities or of both is managed and its performance is
measured on the basis of its fair value according to a documented risk management
procedure or investment strategy and the information on the group is provided internally on
that basis to senior managers with strategic responsibilities.
1.3.
Recognition criteria
The financial instruments “Financial assets and liabilities held for trading and financial assets
and liabilities designated at fair value” are recognised either:
- at the time of settlement if they are debt or equity instruments; or,
- on the trade date, if they are derivative contracts.
Measurement on initial recognition is at cost considered to be the fair value of the instrument
without considering any transaction costs or income directly attributable to the instruments
themselves.
1.4.
Measurement criteria
Subsequent to initial recognition, the financial instruments in question are measured at fair
value with changes recognised in the income statement within item 80 “Net trading income (loss)”,
for assets/liabilities held for trading and within item 110 “Net income/expense on financial assets
and liabilities designated at fair value” for financial assets/liabilities designated at fair value”. The
measurement of the fair value of the assets and liabilities in question is based on prices quoted on
active markets or on internal valuation models which are generally used in financial practice as
described in greater detail in Part A.4 “Information on fair value” of the Notes to the financial
statements.
1.5.
Derecognition criteria
“Financial assets and liabilities held for trading and financial assets and liabilities designated at
fair value” are derecognised in the accounts when the rights to the cash flows from the financial
assets or liabilities expire or when the financial assets or liabilities are transferred with the
substantial transfer of all the risks and rewards deriving from ownership of them. The result of
the transfer of financial assets or liabilities held for trading is recognised in the income statement
within item 80 “Trading income (loss)”, while the result of the transfer of financial assets or
liabilities designated at fair value is recognised within item 110 “Net income/expense on financial
assets and liabilities designated at fair value.
2.
Available-for-sale financial assets
2.1.
Definition
Available-for-sale financial assets (AFS) are defined as non-derivative financial assets designated
on initial recognition as such or that are not classified as:
(1)
(2)
(3)
loans and receivables (see section below);
financial investments held until maturity (see section below);
financial assets held for trading and measured at fair value recognised through profit or
loss (see section below).
These financial assets are recognised within item 40 “Available-for-sale financial assets”.
86*
UBI Banca - Notes to the Financial Statements
2.2.
Recognition criteria
Available-for-sale financial assets are recognised initially when, and only when, the company
becomes a party in the contract clauses of the instrument and that is on the date of settlement, at
fair value which generally coincides with the cost of them. This value includes costs or income
directly connected with the instruments themselves.
The recognition of available-for-sale financial assets may result also from the reclassification out
of “held-to-maturity investments” or, but only in rare circumstances and in any case only if the
asset is no longer held for sale or repurchase in the short term, out of “financial assets held for
trading”; in these cases the recognition value is the same as the fair value at the moment of
reclassification.
2.3.
Measurement criteria
Subsequent to initial recognition, available-for-sale financial assets continue to be recognised at
fair value with interest (resulting from application of the amortised cost) recognised through profit
or loss and changes in fair value recognised in equity within item 140 “Valuation reserves”, except
for losses due to impairment, until the financial asset is derecognised, at which time the profit or
loss previously recognised in equity must be recognised through profit or loss. Equity instruments
for which the fair value cannot be reliably measured are recognised at cost.
The measurement of the fair value of available-for-sale financial assets is based on the prices
quoted on active markets or on internal measurement models which are generally used in
financial practice as described in greater detail in Part A.4 “Information on fair value” of the Notes
to the financial statements.
At the end of each financial year or interim reporting period, objective evidence of impairment is
assessed, which in the case of equity instruments is also held to be significant or prolonged.
As concerns the significance of the impairment, significant indications of impairment exist where
the market value of an equity instrument is less than 35% of its historical cost of acquisition. In
this case impairment is recognised through profit or loss without further analysis. If the
impairment is less then it is recognised only if the measurement of the instrument performed on
the basis of its fundamentals does not confirm the soundness of the company and that is its
earning prospects.
As concerns the permanence of the impairment, it is defined as prolonged when the fair value
remains below its historical cost of purchase for a period of longer than 18 months. In this case
the impairment is recognised through profit or loss without further analysis. If the fair value
continues to remain below its historical purchase cost for periods shorter than 18 months, then
the impairment to be recognised through profit or loss is determined by considering, amongst
other things, whether the impairment is attributable to general negative performance by stock
markets rather than to the specific performance of the individual counterparty.
If there is permanent impairment, the cumulative change, including that previously recognised
in equity under the aforementioned item, is recognised directly in the income statement within
item 130 “Net impairment losses on b) available-for-sale financial assets”.
Permanent impairment loss is recognised when the acquisition cost (net of any repayments of
principal and amortisation) of an available-for-sale financial asset exceeds its recoverable amount.
Any recoveries of value, which are only possible when the causes of the original permanent
impairment no longer exist are treated as follows:


if they relate to investments in equity instruments, then with a balancing entry directly in
the equity reserve;
if they relate to investments in debt instruments, they are recognised in the income
statement within item 130 “Net impairment losses on b) available-for-sale financial assets”.
87*
UBI Banca - Notes to the Financial Statements
The amount of the reversal of the impairment loss may not in any case exceed the amortised
cost which, in the absence of previous impairment losses, the instrument would have had at that
time.
Because UBI Banca applies IAS 34 “Interim financial reporting” to its half year interim reports
with consequent identification of a half year “interim period”, any impairment losses are
recognised historically at the end of the half year.
2.4.
Derecognition criteria
Available-for-sale financial assets are derecognised in the accounts when the contractual rights
to the cash flows from the financial assets expire or when the financial assets are sold with the
substantial transfer of all the risks and benefits deriving from ownership of them. The result of
the disposal of available-for-sale financial assets is recognised in the income statement within
item 100 “Income/expense from the disposal or repurchase of b) available-for-sale financial
assets”. Upon derecognition, any corresponding amount of what was previously recognised in
equity under item 140 “Valuation reserves” is written off against the income statement”.
3.
3.1.
Held-to-maturity investments
Definition
Held-to-maturity investments (HTM) are defined as non-derivative financial assets with fixed or
determinable payments and fixed maturity that an entity intends and is able to hold to maturity.
Exception is made for those:
(a) held for trading and those designated upon initial recognition at fair value through profit or
loss (see previous section);
(b) designated as available for sale (see previous section);
(c) which satisfy the definition of loans and receivables (see section below).
When annual and interim reports are prepared the intention and ability to hold financial assets
until maturity is assessed.
The assets in question are recognised under item 50 “Held-to-maturity investments”.
3.2.
Recognition criteria
Held-to-maturity investments are recognised initially when, and only when, the company
becomes a party in the contract clauses of the instrument and that is on the date of settlement,
measured at cost inclusive of any costs and income directly attributable to it. If the recognition of
assets in this category is the result of the reclassification out of “available-for-sale financial
assets” or, but only and only in rare circumstances if the asset is no longer held for sale or
repurchase in the short-term, out of the “financial assets held for trading”, the fair value of the
assets as measured at the time of the reclassification is taken as the new measure of the
amortised cost of the assets.
3.3.
Measurement criteria
Held-to-maturity investments are valued at amortised cost using the criteria of the effective
interest rate (see the section below “loans and receivables” for a definition). The result of the
application of this method is recognised in the income statement within item 10 “Interest and
similar income”.
When annual financial statements or interim reports are prepared, objective evidence of the
existence of an impairment of the value of the assets is assessed. If there is permanent
88*
UBI Banca - Notes to the Financial Statements
impairment, the difference between the recognised value and the present value of expected future
cash flows discounted at the original effective interest rate is included in the income statement
under the item 130 “Net impairment losses on c) held-to-maturity investments”. Any recoveries of
value recorded, should the cause that gave rise to the previous recognition of impairment loss no
longer exist, are recognised under the same item in the income statement.
The fair value of held-to-maturity investments is measured for disclosure purposes or where
effective currency or credit risk hedges exist (in relation to the risk hedged) and it is estimated as
described in greater detail in Part A.4 “Information on fair value” of the Notes to the financial
statements.
3.4.
Derecognition criteria
Held-to-maturity investments are derecognised when the rights to the cash flows from the
financial assets expire or when the financial assets are sold with the substantial transfer of all the
risks and rewards deriving from ownership of them. The result of the disposal of held-to-maturity
financial assets is recognised in the income statement under the item 100 “Income/expense from
disposal or repurchase of c) held-to-maturity investments”.
4.
4.1.
Loans and receivables
Definition
Loans and receivables (L&R) are defined as non-derivative financial assets with fixed or
determinable payments that are not quoted in an active market. The following are exceptions:
(a) those which it is intended to sell immediately or in the short-term, that are classified as held
for trading and those that may have been designated on initial recognition as at fair value
through profit or loss;
(b) those designated upon initial recognition as available for sale;
(c) those for which the holder may not recover substantially all of its initial investment, other
than because of credit deterioration; in this case they are classified as available-for-sale.
Loans and receivables are recognised under the items 60 “Loans and advances to banks” and 70
“Loans and advances to customers”.
4.2.
Recognition criteria
Loans and receivables are initially recognised in the accounts when the company becomes part
of a loan contract, which is to say when the creditor acquires the right to the payment of the sums
agreed in the contract. That moment corresponds to the date on which the loan is granted.
Recognition in this category may result also from the reclassification out of “available-for-sale
financial assets” or, but only and only in rare circumstances if the asset is no longer held for sale
or repurchase in the short term, out of “financial assets held for trading”.
The amount initially recognised is that of the fair value of the financial instrument which is the
same as the amount granted inclusive of costs or income directly attributable to it and
determinable from the outset, independently of when they are paid. The amount of the initial
recognition does not include all those expenses that are reimbursed by the debtor counterparty or
that are attributable to internal expenses of an administrative character.
If the recognition is the result of reclassification, the fair value of the asset recognised at the time
of the reclassification is taken as the new measure of the amortised cost of the assets.
For loans not granted under market conditions, the initial fair value is calculated by using
special measurement techniques described below; in these circumstances the difference between
the fair value that is calculated and the amount granted is included directly in the income
statement within the item interest.
Contango and repo agreements with the obligation or right to repurchase or resell at term are
recognised in the accounts as funding or lending transactions. For transactions with a spot sale
and forward repurchase, the spot cash received is recognised in the accounts as borrowings, while
89*
UBI Banca - Notes to the Financial Statements
the spot purchase transactions with forward resale are recognised as lending for the spot amount
paid.
4.3.
Measurement criteria
Loans and receivables are measured at amortised cost using the criteria of effective interest.
The amortised cost of a financial asset or financial liability is the amount at which the financial
asset or financial liability was measured upon initial recognition net of principal repayments, plus
or minus the cumulative amortisation using the effective interest criterion on any difference
between that initial amount and the maturity amount, minus any reduction (arising from an
impairment or uncollectibility).
The effective interest criterion is a method of calculating amortised cost of an asset or liability (or
group of assets and liabilities) and of allocating the interest income or expense over the relevant
period. The effective interest rate is the rate that exactly discounts estimated future cash
payments or receipts through the expected life of the financial instrument. To determine the
effective interest rate, the cash flows must be estimated considering all the contractual terms of
the financial instrument (e.g. prepayment, call and similar options), but future credit losses shall
not be considered. The calculation includes all fees and basis points paid or received between
parties to the contract that are an integral part of the effective interest rate, the transaction costs
and all other premiums or discounts.
At each reporting date or when interim reports are prepared, any objective evidence that a
financial asset or group of financial assets has suffered impairment loss is assessed. This
circumstance occurs when it is probable that a company may not be able to collect amounts due
on the basis of the original contracted conditions or, for example, in the presence of:
(a) significant financial difficulties of the issuer or obligor;
(b) a breach of contract such as a default or delinquency in interest or principal payments;
(c) the lender, for economic or legal reasons relating to the borrower’s financial difficulty,
granting to the borrower a concession that the lender would not otherwise consider;
(d) the probability of the beneficiary declaring procedures for loan restructuring;
(e) the disappearance of an active market for that financial asset due to financial difficulties;
(f) observable data indicating an appreciable decrease in estimated future cash flows from a
similar group of financial assets since the time of the initial recognition of those assets,
although the decrease cannot yet be identified with the individual financial assets of the
group.
The measurement of non-performing loans (termed deteriorated loans in previous financial
reports) (in accordance with the definitions contained in current Bank of Italy supervisory
regulations divided into: non-performing, unlikely to pay, past due) is performed on a case-bycase basis.
The remaining loans are measured using, collective, statistical methods which group uniform
classes of risk together.
The method for calculating the impairment losses recognised on non-performing loans is based
on discounting expected future cash flows for principal and interest, taking account of any
guarantees attached to positions and of any advances received. The basic elements for
determining the present value of cash flows are the identification of the estimated receipts, the
relative maturity dates and the discount rate to apply. The amount of the loss is equal to the
difference between the recognised value of the asset and the present value of expected future cash
flows, discounted at the original effective interest rate.
The measurement of performing loans relates to asset portfolios for which no objective evidence
of impairment exists and which are therefore valued collectively. Percentage rates of loss,
calculated from historical data series estimated according to the measurement method based on
Basel 2 regulations, to which appropriate corrective factors are applied to give a measurement
consistent with that required by the relative accounting standard, are applied to the estimated
cash flows from the assets, grouped into uniform classes with similar characteristics in terms of
credit risk.
90*
UBI Banca - Notes to the Financial Statements
If a loan is subject to individual measurement and shows no objective impairment loss, it is
placed in a class of financial assets with similar credit risk characteristics and subjected to
collective measurement.
Permanent impairment that is found is immediately recognised in the income statement under
the item 130 “Net impairment losses on a) loans” as are reversals of part or all of the impairment
losses previously recognised. Reversals of impairment losses are recognised where there is an
improvement in credit quality sufficient to provide reasonable certainty of prompt collection of the
principal and the interest according to the original conditions of the original loan contract, or in
the presence of a progressive reversal of the present value calculated at the time of recognising the
impairment loss. Where loans are measured on a collective basis, any upward value adjustments
or reversals of impairment losses are recalculated on a differential basis in relation to each
performing loan at the measurement date.
The methods used to determine the fair value of loans and receivables are described in Part A.4
“Information on fair value” of the Notes to the financial statements. The fair value is measured for
all loans for information purposes only. For loans and receivables subject to effective hedging, the
fair value is calculated in relation to the risk that is hedged for measurement purposes.
4.4.
Derecognition criteria
Loans are derecognised from the balance sheet when the rights to the cash flows from the
financial assets expire or when the financial assets are sold with the substantial transfer of all the
risks and rewards deriving from ownership of them and also when events to extinguish the debt
occur, in accordance with the definition provided in the supervisory regulations in force.
Otherwise loans continue to be recognised on the balance sheet for an amount equal to the
remaining involvement, even if legal title has been transferred to a third party.
The assets in question are derecognised in the balance sheet even when the Bank maintains the
contractual right to receive cash flows from them, but when at the same time it has a contractual
obligation to pay those cash flows to a third party.
If it results from disposals, the profit or loss from the derecognition of loans and receivables is
recognised in the income statement within item 100 “Income (loss) from the disposal or
repurchase of a) loans”, or if it results from the aforementioned events to extinguish debt, within
item 130 “Net impairment losses on a) loans and receivables”. In the latter case the events to
extinguish debt consist of either official actions taken by the competent bodies of the Bank from
which the total or partial non-recoverability of the financial asset results or the waiver of recovery
activities for reasons of financial expediency.
5.
Hedging derivatives
5.1.
Definition
Hedging transactions are designed to neutralise potential losses on a specific item (or group of
items) attributable to a determined risk, by means of the gains realised on another instrument or
group of instruments if that particular risk should actually result in losses.
The Bank uses the following type of hedging transactions, appropriately represented in the
accounts and described below:


a fair value hedge: the objective is to offset adverse changes in the fair value of the asset or
liability hedged;
a cash flow hedge: the objective is to hedge against the exposure to variability in expected
cash flows with respect to the initial expectations.
Derivative contracts stipulated with external counterparties are designated as hedging
instruments.
91*
UBI Banca - Notes to the Financial Statements
5.2.
Recognition criteria
As with all derivatives, derivative financial instruments used for hedging are initially recognised
and subsequently measured at fair value and are classified in the balance sheet under assets
within item 80 “Hedging derivatives” and under liabilities within item 60 “Hedging derivatives”.
A relationship qualifies as a hedge and is appropriately represented in the accounts if, and only
if, all the following conditions are satisfied:
 at the start of the hedging transaction the relationship is formally designated and
documented, including the company’s risk management objective and strategy for
undertaking the hedge. This documentation includes identification of the hedging instrument,
the item or transaction hedged, the nature of the risk being hedged, and how the entity will
assess the hedging instrument's effectiveness in offsetting the exposures to changes in the
fair value of the item hedged or in the cash flows attributable to the risk hedged;
 the hedging is expected to be highly effective;
 the planned transaction hedged, for hedging cash flows, is highly probable and presents an
exposure to changes in cash flows that could have effects on the income statement;
 the effectiveness of the hedging can be reliably measured;
 the hedging is measured on an ongoing basis and is considered highly effective for all the
financial years in which it was designated.
5.2.1.
Methods for testing effectiveness
A hedge relationship is judged effective, and as such is appropriately represented in the
accounts, if at its inception and during its life the changes in the fair value or cash flows of the
hedged item attributable to the hedged risk are almost always completely offset by the changes in
the fair value or cash flows of the hedging instrument. This conclusion is reached when the actual
result falls within a range of between 80% and 125%.
The effectiveness of a hedge is tested at inception and at each reporting date by means of a
prospective test designed to demonstrate the expected effectiveness of the hedge during its life.
Further retrospective tests are conducted monthly on a cumulative basis where the objective is
to measure the degree of effectiveness of the hedge in the reporting period and therefore to verify
whether the hedge has actually been effective in the period.
Derivative financial instruments that are considered hedges from a profit and loss viewpoint but
which do not satisfy the requirements to be considered effective instruments for hedging are
recognised under item 20 “Financial assets held for trading” or under item 40 “Financial liabilities
held for trading” and the profits and losses under the corresponding item 80 “Trading income
(loss)”.
If the above tests do not confirm the effectiveness of the hedge, then if it is not derecognised, the
derivative contract is reclassified within derivatives held for trading and the instrument hedged is
again measured according to the criterion applied for its balance sheet classification.
5.3.
Measurement criteria
5.3.1.
Fair value hedging
Fair value hedging is treated as follows:
 the profit or loss resulting from measuring a hedging instrument at fair value is included in
the income statement under item 90 “Net hedging income (loss)”;
 the profit or loss on the item hedged attributable to the hedged risk adjusts the value in the
accounts of the hedged item and is recognised immediately, regardless of the type of asset or
liability hedged, in the income statement within the aforementioned item.
Hedge accounting is discontinued prospectively in the following cases:
1.
the hedging instrument expires or is sold, terminated, or exercised;
92*
UBI Banca - Notes to the Financial Statements
2.
3.
the hedge no longer meets the hedge accounting criteria described above;
the entity revokes the designation.
If the asset or liability hedged is measured at amortised cost, the higher or lower value resulting
from measuring them at fair value as a result of the hedge becoming ineffective is recognised
through profit or loss, according to the effective interest rate method or at constant rates in the
event of a hedge on a portfolio of assets and liabilities where that method is not feasible, or in a
single amount if the hedge is derecognised.
The methods used for measurement of the fair value of the risk hedged in the assets or liabilities
subject to hedging are described in Part A.4 “Information on fair value” of the Notes to the
financial statements.
5.3.2.
Cash flow hedging
When a derivative is designated as a hedge of exposure to changes in expected cash flows from
an asset or liability in the balance sheet or a future transaction considered highly probable, the
accounting treatment of the hedge is as follows:
 the profits or losses (from the measurement of the hedging derivative) attributable to the
effective portion of the hedge are recognised in a special reserve in equity named 130
“Valuation reserves”;
 the profits or losses (from measurement of the hedging derivative) attributable to the
ineffective portion of the hedge are recognised directly in the income statement under item 90
“Net hedging income (loss)”;
 the asset or liability hedged is measured according to the class of asset or liability to which it
belongs.
If a future transaction occurs which involves recognising non-financial assets and liabilities, the
corresponding profits or losses initially recognised under item 130 “Valuation reserves” are then
transferred from that reserve and included as an initial cost of the asset or liability that is
recognised. If the future hedged transaction subsequently involves recognition of a financial asset
or liability, the associated profits or losses that were originally recognised under the item 130
“Valuation reserves” are reclassified to the income statement in the same reporting period or
periods during which the assets acquired or liabilities incurred have an effect on the income
statement. If a portion of the profits or losses recognised in the aforementioned reserve are not
considered recoverable, it is reclassified into the income statement within item 80 “Net trading
income (loss)”.
In all cases other than those already described, the profits or losses initially recognised under
the item 130 “Valuation reserves” are transferred to the income statement to reflect the time and
manner in which the future transaction is recognised in the income statement.
An entity must discontinue hedge accounting prospectively in each of the following
circumstances:
(a) the hedging instrument expires or is sold, terminated, or exercised (for this purpose the
replacement or exchange of one hedging instrument with another hedging instrument is not a
conclusion or termination if that replacement or exchange forms part of an entity’s documented
hedging strategy). In this case the total profit (or loss) on the hedging instrument continues to be
recognised directly in equity until the reporting period in which the hedge became effective and it
continues to be recognised separately until the programmed hedging transaction occurs;
(b) the hedge no longer satisfies the criteria for hedge accounting. In this case the total profit
or loss on the hedging instrument continues to be recognised directly in equity starting from the
reporting period in which the hedge became effective and it continues to be recognised separately
in equity until the programmed hedging transaction occurs;
(c) it is no longer considered that the future transaction should occur, in which case any
related total profit or loss on the hedging instrument recognised directly in equity starting from
the reporting period in which the hedge became effective must be recognised through profit or
loss;
93*
UBI Banca - Notes to the Financial Statements
(d) the entity revokes the designation. For hedges of a programmed transaction, total profits or
losses on the hedging instrument recognised directly in equity starting from the reporting period
in which the hedge became effective continues to be recognised separately in equity until the
programmed transaction occurs or it is expected that it will no longer occur.
If it is expected that the transaction will no longer occur the total profit (or loss) that had been
recognised directly in equity is transferred to the income statement.
5.3.3.
Hedging portfolios of assets and liabilities
Hedging of portfolios of assets and liabilities (“macrohedging”) and appropriate accounting
treatment is possible after first:
- identifying the portfolio to be hedged and dividing it by maturity dates;
- designating the risk to be hedged;
- identifying the interest rate risk to be hedged;
- designating the hedging instruments;
- determining the effectiveness.
The portfolio for which the interest rate risk is hedged may contain both assets and liabilities.
This portfolio is divided on the basis of expected maturity or repricing dates of interest rates after
first analysing the structure of the cash flows.
Changes in the fair value of the hedged instrument are recognised in the income statement
under item 90 “Net hedging income (loss)” and in the balance sheet under item 90 “Fair value
change in hedged financial assets” or under item 70 “Fair value change in hedged financial
liabilities”.
Changes occurring in the fair value of the hedging instrument are recognised in the income
statement within item 90 “Net hedging income (loss)” and under assets in the balance sheet
within item 80 “Hedging derivatives” or under liabilities side within item 60 “Hedging derivatives”.
6.
Equity investments
6.1.
Definition
6.1.1.
Subsidiaries
A “subsidiary” is defined as a company over which the Parent exercises control. Such a condition
occurs when the latter is exposed to variable returns or holds rights on those returns resulting
from its relationship with the subsidiary and at the same time it has the ability to influence those
returns by exercising its power over that entity.
The existence of control is also determined by considering the presence of potential voting rights
and contractual rights which empower the owner to significantly influence the returns of the
subsidiary.
6.1.2.
Companies subject to joint control
A “company subject to joint control” is defined as a company governed by a contractual
arrangement whereby the parties to it that hold joint control enjoy rights over the net assets of the
arrangement. Joint control assumes that control over the arrangement is shared contractually
and that it only exists when the unanimous consent of all the parties that share the control is
required for decisions that regard important activities.
94*
UBI Banca - Notes to the Financial Statements
6.1.3.
Associates
An “associate” is defined as a company in which the investor exercises significant influence.
Significant influence is the power to participate in the financial and operating policy decisions of
the company invested in but not to control or have joint control of it.
6.2.
Recognition criteria
Equity investments are recognised at the cost of purchase inclusive of any accessory costs, with
exception made for controlled equity investments acquired in business combinations.
6.3.
Measurement criteria
Equity investments are measured at cost. Any objective evidence that an equity investment has
been subject to impairment is assessed as at each annual or interim reporting date. The
recoverable amount is then calculated, considering the present value of the future cash flows
which may be generated by the investment, including the final disposal value. If the recoverable
amount calculated in this way is less than carrying value, the difference is recognised in the
income statement under item 210 “Profit (loss) of equity investments”. Any future reversals of
impairment are also included in the item where the reasons for the original impairment no longer
apply.
6.4.
Derecognition criteria
Equity investments are derecognised in the balance sheet when the contractual rights to the
cash flows from the financial assets expire or when the financial assets are sold with the
substantial transfer of all the risks and rewards deriving from ownership of them. The result of
the disposal of equity-accounted investees is recognised in the income statement within item 210
“Profits (losses) of equity investments”.
7.
7.1.
Property, plant and equipment
Definition of assets for functional use
“Assets for functional use” are defined as tangible assets possessed to be used for the purpose of
carrying on a company’s business and where the use is planned to last longer than one year.
Assets for functional use also include properties rented to employees, ex employees and their
heirs, as well as works of art.
7.2.
Definition of investment property
“Investment property” is defined as properties held in order to earn rentals or for capital
appreciation. As a consequence, investment property is to be distinguished from assets held for
the use of the owner because they generate cash flows that are very different from the other assets
held by the Bank.
Finance lease contracts are also included within tangible assets (for functional use and held for
investment) even if the legal title to the assets remains with the leasing company.
7.3.
Recognition criteria
Tangible assets for functional use and other tangible assets are initially recognised at cost (item
“110 Property, equipment and investment property”), inclusive of all costs directly connected with
bringing it to working condition for the use of the assets and purchase taxes and duties that are
not recoverable. This amount is subsequently increased to include expenses incurred from which
it is expected future benefits will be obtained. The costs of ordinary maintenance are recognised in
95*
UBI Banca - Notes to the Financial Statements
the income statement at the time at which they are incurred, while extraordinary maintenance
costs (improvements) from which future benefits are expected are capitalised by increasing the
value of the relative asset.
Improvements and expenses incurred to increase the value of leased assets from which future
benefits are expected are recognised:

within the most appropriate category of item 110 “Property, plant and equipment” if
they are independent and can be separately identified, whether they are third party assets held on
the basis of an ordinary leasing contract or whether they are held under a finance lease contract;

within item 110 “Property, plant and equipment”, if they are not independent and
cannot be separately identified, as an increase to the type of assets concerned if held by means of
a finance lease contract or within item 150 “Other assets” if they are held under an ordinary lease
contract.
The cost of property, plant and equipment is recognised as an asset if, and only if:

it is probable that the future economic benefits associated with the asset will flow to the
enterprise;

the cost of the asset can be reliably determined.
7.4.
Measurement criteria
Subsequent to initial recognition, items of property, plant and equipment for use in operations
are recognised at cost, as defined above, net of accumulated depreciation and any permanent
cumulative impairment. The depreciable amount, equal to cost less the residual value (i.e. the
amount that would be normally obtained from disposal, less disposal costs, if the asset was
normally in the conditions, including age, expected at the end of its useful life), should be
allocated on a systematic basis over the asset's useful life by adopting the straight line method of
depreciation. The useful life of an asset, which is reviewed periodically to detect any significant
change in estimates compared to previous figures, is defined as:

the period of time over which it is expected that the asset can be used by a company or,

the quantity of products or similar units that an entity expects to obtain from the use of the
asset.
Since property, plant and equipment may consist of items with different useful lives, land,
whether by itself or as part of the value of a building is not depreciated since it constitutes a fixed
asset with an indefinite life. The value attributable to the land is deducted from the total value of
a property for all buildings in proportion to the percentage of ownership. Buildings, on the other
hand, are depreciated according to the criteria described above.
Works of art are not depreciated because they generally increase in value over time.
Depreciation of an asset starts when it is available for use and ceases when the asset is written
off the accounts, which is the most recent of when it is classified as for sale and the date of
elimination from the accounts. As a consequence depreciation does not stop when an asset is left
idle or is no longer in use, unless the asset has already been fully depreciated.
Improvements and expenses which increase the value are depreciated as follows:
–
if they are independent and can be separately identified, according to the presumed
useful life as described above;
–
if they are not independent and cannot be separately identified, then if they are held
under an ordinary leasing contract, over the shorter of the period in which the improvements and
expenses can be used and that of the remaining life of the contract taking account of any
individual renewals, or if the assets are held under a finance lease contract, over the expected
useful life of the assets concerned.
The depreciation of improvements and expenses to increase the value of leased assets recognised
under item 150 “Other assets” is recognised within the item 190 “Other operating income
(expense)”.
96*
UBI Banca - Notes to the Financial Statements
At the end of each annual or interim reporting period the existence of indications that
demonstrate the impairment of the value of an asset are assessed. The loss is determined by
comparing the carrying amount of the tangible asset with the lower recoverable amount. The
latter is the greater of the fair value, net of any sales costs, and the relative use value intended as
the present value of future cash flows generated by the asset. The loss is immediately recognised
in the income statement within item 170 “Net impairment losses on property, plant and
equipment”; the item also includes any future reversal of impairment losses if the causes of the
original impairment no longer exist.
7.4.1.
Definition and measurement of fair value
7.4.1.1.
Properties
The methods used to determine the fair value of properties are described in Part A.4
“Information on fair value” of the Notes to the financial statements.
7.4.1.2.
Determination of the value of land
The methods used to determine the fair value of land are described in Part A.4 “Information on
fair value” of the Notes to the financial statements.
7.5.
Property, plant and equipment acquired through finance leases
A finance lease is a contract that substantially transfers all the risks and rewards incident to
ownership of an asset. Legal title may or may not be transferred at the end of the lease term.
The beginning of the lease term is the date on which the lessee is authorised to exercise his right
to use the asset leased and therefore corresponds to the date on which the lease is initially
recognised.
When the contract commences, the lessee recognises the financial lease transactions as assets
and liabilities in its balance sheet at the fair value of the asset leased or, if lower, at the present
value of the minimum payments due. To determine the present value of the minimum payments
due, the discount rate used is the contractual interest rate implicit in the lease, if practicable, or
else the lessee’s incremental borrowing rate is used. Any initial direct costs incurred by the lessee
are added to the amount recognised for the asset.
The minimum payments due are apportioned between the finance charges and the reduction of
the residual liability. The former are allocated over the lease term so as to produce a constant rate
of interest on the residual liability.
The finance lease contract involves recognition of the depreciation charge for the asset leased
and of the finance charges for each financial year. The depreciation policy used for assets
acquired under finance leases is consistent with that adopted for owned assets. See the relative
paragraph for a more detailed description.
7.6.
Derecognition criteria
Property, plant and equipment are derecognised in the balance sheet when they are disposed of
or when they are permanently retired from use and no future economic benefits are expected from
their disposal. Any gains or losses resulting from the retirement or disposal of the tangible asset,
calculated as the difference between the net consideration on the sale and the carrying amount of
the asset are recognised in the income statement under item 240 “Profit (loss) on the disposal of
investments”.
97*
UBI Banca - Notes to the Financial Statements
8.
Intangible assets
8.1.
Definition
An intangible asset is defined as an identifiable non-monetary asset without physical substance
that is used in carrying on a company’s business.
The asset is identifiable when:
 it is separable, which is to say capable of being separated and sold, transferred, licensed,
rented, or exchanged;
 it arises from contractual or other legal rights, regardless of whether those rights are
transferable or separable from other rights and obligations.
An asset possesses the characteristic of being controlled by the enterprise as a result of past
events and the assumption that its use will cause economic benefits to flow to the enterprise. An
entity has control over an asset if it has the power to obtain future economic benefits arising from
the resource in question and may also limit access by others to those benefits.
Future economic benefits arising from an intangible asset might include receipts from the sale of
products or services, savings on costs or other benefits resulting from the use of the asset by an
enterprise.
An intangible asset is recognised if, and only if:
(a) it is probable that the expected future economic benefits attributable to the asset will flow
to the entity;
(b) the cost of the asset can be measured reliably.
The probability of future economic benefits occurring is assessed on the basis of reasonable and
supportable assumptions that represent the best estimate of the economic conditions that will
exist over the useful life of the asset.
The degree of probability attaching to the flow of economic benefits attributable to the use of the
asset is assessed on the basis of the sources of information available at the time of initial
recognition, giving greater weight to external sources of information.
In addition to goodwill and software used over several years, brands, assets under management
and assets under management recognised following the merger of the former BPU Banca and the
former Banca Lombarda e Piemontese are also considered as intangible assets.
8.1.1.
Intangible assets with a finite useful life
A finite useful life is defined for an asset where it is possible to estimate a limit to the period over
which the related economic benefits are expected to be produced.
Intangible assets considered as having a finite useful life include software, customer
relationships resulting from granting property loans to private individuals.
8.1.2.
Intangible assets with an indefinite useful life
An indefinite useful life is defined for an asset where it is not possible to estimate a predictable
limit to the period over which the asset is expected to generate economic benefits for the Bank.
The attribution of an indefinite useful life to an asset does not arise from having already
programmed future expenses which restore the standard level of performance of the asset over
time and prolong its useful life.
8.2.
Recognition criteria
Assets recognised under the balance sheet item 120 “Intangible assets” are recognised at cost
and any expenses subsequent to the initial recognition are only capitalised if they are able to
generate future economic benefits and only if those expenses can be reliably determined and
attributed to the assets.
98*
UBI Banca - Notes to the Financial Statements
The cost of an intangible asset includes:
 the purchase price including any non recoverable taxes and duties on purchases after
commercial discounts and bonuses have been deducted;
 any direct costs incurred in bringing the asset into use.
8.3.
Measurement criteria
Subsequent to initial recognition intangible assets with a finite useful life are recognised at cost
net of total amortisation and any losses in value that may have occurred. Amortisation is
calculated on a systematic basis over the estimated useful life of the asset (see definition included
in the sub-section “Property, plant and equipment”) using the straight line method for all
intangible assets with the exception of customer relationships resulting from granting property
loans to private individuals which are amortised on the basis of the average life of the
relationships or in other words of the portfolio of loans granted.
Amortisation begins when the asset is available for use and ceases on the date on which the
asset is eliminated from the accounts.
Intangible assets with an indefinite useful life (see, goodwill, as defined in the section below if
positive) are recognised at cost net of any impairment loss resulting from periodic reviews when
tests are performed to verify the appropriateness of the carrying amount of the assets (see section
below). As a consequence amortisation of these assets is not calculated.
No intangible assets arising from research (or from the research phase of an internal project) are
recognised. Research expenses (or the research phase of an internal project) are recognised as
expenses at the time at which they are incurred.
An intangible asset arising from development (or from the development phase of an internal
project) is recognised if, and only if the following can be demonstrated:
(a)
sale
(b)
(c)
the technical feasibility of completing the intangible asset so that it becomes available for
or use;
the intention of the company to complete the intangible asset to use it or sell it;
the capacity of the company to use or sell the intangible asset.
At the end of each annual or interim reporting period the existence of potential impairment of
the value of intangible assets is assessed. The impairment loss is given by the difference between
the carrying amount of the assets and the recoverable amount and is recognised, as are any
reversals of impairment losses, within the item 180 “Net impairment losses on intangible assets”,
with the exception of impairment losses on goodwill which are recognised within item 230 “Net
impairment losses on goodwill”.
8.4.
Goodwill
Goodwill is defined as the difference between the purchase cost and the fair value of assets and
liabilities acquired as part of a business combination which consists of the union of separate
enterprises or businesses in a single entity required to prepare financial statements. The result of
almost all business combinations consists in the fact that a sole entity, an acquirer, obtains
control over one or more separate businesses of the acquiree. When an entity acquires a group of
activities or net assets that do not constitute a business it allocates the cost of the group to
individual assets and liabilities identified on the basis of their relative fair value at the date of
acquisition.
A business combination may give rise to a holding relationship between a parent company and a
subsidiary in which the acquirer is the parent company and the acquiree is the subsidiary.
All business combinations are accounted for using the purchase method of accounting.
The purchase method involves the following steps:
99*
UBI Banca - Notes to the Financial Statements
(a) identification of the acquirer (the acquirer is the combining enterprise that obtains control of
the other combining enterprises or businesses);
(b) determination of the acquisition date;
(c) determination of the cost of the business combination, intended as the consideration
transferred by the purchaser to the shareholders of the acquiree;
(d) the allocation, as at the acquisition date, of the cost of the business combination by means
of the recognition, classification and measurement of the identifiable assets acquired and the
identifiable liabilities assumed;
(e) recognition of any existing goodwill.
Business combinations performed with subsidiary undertakings or with companies belonging to
the same group are recognised on the basis of the significant economic substance of the
transactions.
In application of that principle, the goodwill arising from those transactions is recognised:
(a)
within asset item 120 of the balance sheet if significant economic substance is found;
(b)
as a deduction from equity if it is not found.
8.4.1.
Allocation of the cost of a business combination to assets and liabilities and
contingent liabilities
The acquirer:
(a) recognises the goodwill acquired in a business combination as assets;
(b) measures that goodwill at its cost to the extent that it is the excess of the cost of the
business combination over the acquirer's share of interest in the net fair values of the acquiree's
identifiable assets, liabilities and contingent liabilities.
Goodwill acquired in a business combination represents a payment made by the acquirer in the
expectation of receiving economic future benefits from the asset which cannot be identified
individually and recognised separately.
After initial recognition, the acquirer values the goodwill acquired in a business combination at
the relative cost net of cumulative impairment.
The goodwill acquired in a business combination must not be amortised. The acquirer tests the
asset for impairment annually or more frequently if specific events or changed circumstances
indicate that it may have suffered a reduction in value, according to the relative accounting
standard.
The standard states that an asset (including goodwill) has suffered value impairment when the
value recognised in the accounts exceeds the recoverable amount understood as the greater of the
fair value, net of any sales expenses and its value in use, defined by section 6 of IAS 36.
In order to test for impairment, goodwill must be allocated to cash generating units or to groups
of cash generating units, in observance of the maximum aggregation limit which cannot exceed
the operating segment identified in accordance with IFRS 8.
8.4.2.
Negative goodwill
If the acquirer’s share of the net fair value of the identifiable assets, liabilities and contingent
liabilities exceeds the cost of the business combination the acquirer:
(a) reviews the identification and measurement of the identifiable assets, liabilities and
contingent liabilities of the acquiree and the determination of the cost of the business
combination;
(b) immediately recognises any excess existing after the new measurement in the income
statement.
100*
UBI Banca - Notes to the Financial Statements
8.5.
Derecognition criteria
Intangible assets are derecognised in the balance sheet following disposal or when no economic
future benefit is expected from its use or disposal.
9.
Liabilities, debt securities issued (and subordinated liabilities)
The various forms of interbank and customer funding are recognised within the balance sheet
items 10 “Due to banks”, 20 “Due to customers” and 30 “Debt securities issued”. These items also
include liabilities recognised by a lessee in financial leasing operations.
9.1.
Recognition criteria
The liabilities in question are recognised in the balance sheet at the time when the funding is
received or when the debt securities are issued. The amount recognised is the fair value, which is
normally the same as either the consideration received or the issue price, inclusive of any
additional expenses or income that are directly attributable to the transaction and determinable
from the outset, regardless of when they are paid. The amount of the initial recognition does not
include all those costs that are reimbursed by the creditor counterparty or that are attributable to
internal costs of an administrative character.
9.2.
Measurement criteria
After initial recognition medium to long-term financial liabilities are measured at amortised cost
using the effective interest method as defined in previous paragraphs.
Short-term liabilities, for which the time factor is insignificant, are measured at cost.
The methods used to determine the fair value of liabilities and debt securities issued, performed
for information purposes only, are described in Part A.4 “Information on fair value” of the Notes to
the financial statements.
9.3.
Derecognition criteria
Financial liabilities are derecognised in the balance sheet when they mature or are extinguished.
The repurchase of own securities issued results in derecognition of the securities with the
consequent redefinition of the liability for debt instruments issued. Any difference between the
repurchase value of the own securities and the corresponding carrying value of the liabilities is
recognised in the income statement under the item 100 “Income from the disposal or repurchase
of d) financial liabilities”. Any subsequent re-issue of the securities previously subject to
derecognition in the accounts constitutes a new issue for accounting purposes with the
consequent recognition at the new issue price without any effect in the income statement.
10.
Tax assets and liabilities
Tax assets and liabilities are stated in the balance sheet within the items 130 “Tax assets” and
80 “Tax liabilities”.
10.1. Current tax assets and liabilities
Current tax for the current and prior periods is recognised as a liability to the extent that it has
not yet been settled; any excess compared to the amount due is recognised as an asset.
Current tax liabilities (assets) for the current and prior years, are measured at the amount
expected to be paid to/recovered from taxation authorities, using the tax rates and tax laws in
force.
101*
UBI Banca - Notes to the Financial Statements
Current tax assets and liabilities are derecognised in the accounts in the year in which the
assets are realised or the liabilities are extinguished.
10.2. Deferred tax assets and liabilities
Deferred tax liabilities are recognised for all taxable temporary differences unless the deferred
tax liability arises from:


goodwill for which amortisation is not deductible for tax purposes or
the initial recognition of an asset or a liability in a transaction which:


is not a business combination and
at the time of the transaction, affects neither the accounting nor the taxable profit.
Deferred tax assets are not calculated for higher values of assets for which the tax regime has
been suspended relating to equity investments and to reserves for which the tax regime has been
suspended because it is considered there are no reasonable grounds to assume they will be taxed
in future.
Deferred tax liabilities are recognised within the balance sheet item 80 “Tax liabilities b)
deferred”.
A deferred tax asset is recognised for all deductible temporary differences if it is probable that a
taxable income will be used against which it will be possible to use the deductible temporary
difference, unless the deferred tax asset arises from:


negative goodwill which is treated as deferred income;
the initial recognition of an asset or liability in a transaction which:


is not a business combination and
affects neither the accounting profit nor the taxable profit at the time of the transaction.
Deferred tax assets are recognised within the balance sheet item 130 “Tax assets b) deferred”.
Deferred tax assets and deferred tax liabilities are subject to constant monitoring and are
measured using the tax rates that it is expected will apply in the period in which the tax asset will
be realised or the tax liability will be extinguished on the basis of the tax regulations established
by laws currently in force.
Deferred tax assets and deferred tax liabilities are derecognised in the accounts in the year in
which:

the temporary difference which gave rise to them becomes payable with regard to
deferred tax liabilities or deductible with regard to deferred tax assets;

the temporary difference which gave rise to them is no longer valid for tax purposes.
Deferred tax assets and deferred tax liabilities must not normally be discounted to present
values nor offset one against the other,
11.
Non-current assets and disposal groups held for sale – Liabilities
associated with disposal groups held for sale
Non-current assets and liabilities and groups of non-current assets and liabilities for which it is
presumed that the carrying value will recovered by selling them rather than by continued use are
classified respectively under items 140 “Non-current assets and disposal groups held for sale” and
90 “Liabilities associated with assets held for sale”.
In order to be classified within these items the assets or liabilities (or disposal groups) must be
immediately available for sale and there must be active, concrete programmes to sell the assets or
liabilities in the short term.
These assets or liabilities are measured at the lower of the carrying amount and their fair value
net of disposal costs.
102*
UBI Banca - Notes to the Financial Statements
Profits and losses attributable to groups of assets or liabilities held for sale are recognised in the
income statement under item 280 “Pre-tax profit (loss) of non-current assets and groups of assets
held for disposal”.
Profits and losses attributable to individual assets held for disposal are recognised in the income
statement under the most appropriate item.
12.
Provisions for risks and charges
12.1. Definition
A provision is defined as a liability of uncertain timing or amount.
A contingent liability, however, is defined as:

a possible obligation, the result of past events, the existence of which will only be confirmed
by the occurrence or (non-occurrence) of future events that are not totally under the control of the
enterprise;

a present obligation that is the result of past events, but which is not recognised in the
accounts because:


it is improbable that financial resources will be needed to settle the obligation;
the amount of the obligation cannot be measured with sufficient reliability.
Contingent liabilities are not recognised in the accounts, but are only reported, unless they are
considered a remote possibility.
12.2. Recognition criteria and measurement
A provision is recognised if and only if:

there is a present obligation (legal or implicit) that is the result of a past event and

it is probable that the use of resources suitable for producing economic benefits will be
required to fulfil the obligation; and

a reliable estimate can be made of the amount arising from fulfilment of the obligation.
The amount recognised as a provision represents the best estimate of the expenditure required
to settle the present obligation at the reporting date and reflects the risks and uncertainties that
inevitably characterise a number of facts and circumstances. The amount of a provision is
measured by the present value of the expenditure that it is assumed will be necessary to settle the
obligation where the effect of the present value is a substantial aspect. Future events that might
affect the amount required to settle the obligation are only taken into consideration if there is
sufficient objective evidence that they will occur.
Provisions made for risks and charges include those for the risk attaching to any existing tax
litigation.
12.3. Derecognition criteria
The provision is reversed when it becomes improbable that the use of resources suitable for
producing economic benefits will be required to settle the obligation.
13.
Foreign currency transactions
13.1. Definition
A foreign currency is a currency other than the functional currency of the entity, which is the
currency of the primary economic environment in which an entity operates.
103*
UBI Banca - Notes to the Financial Statements
13.2. Recognition criteria
A foreign currency transaction is recorded at the time of initial recognition in the functional
currency applying the spot exchange rate between the functional currency and the foreign
currency ruling on the date of the transaction.
13.3. Measurement criteria
At each reporting date:
(a) foreign currency monetary amounts17 are translated using the closing rate;
(b) non-monetary items18 measured at historical cost in foreign currency are translated using
the exchange rate at the date of the transaction;
(c) non-monetary items carried at fair value in a foreign currency are translated using the
exchange rates that existed on the dates when the fair values were determined.
Exchange differences arising from the settlement of monetary items or from the translation of
monetary items at rates different from those at which they were translated when initially
recognised during the year or in previous financial statements are recognised in the income
statement for the year in which they originated.
Exchange rate differences arising from a monetary item that forms part of a net investment in a
foreign operation of an entity that prepares financial statements are recognised in the income
statement of the individual company financial statements of the entity that prepares the financial
statements or the individual company financial statements of the foreign operation.
When a profit or loss on a non-monetary item is recognised directly in equity, each change in
that profit or loss is also recognised directly in equity. However, when a profit or loss on a nonmonetary item is recognised in the income statement each change in that profit or loss is
recognised in the income statement.
14.
Other information
- Treasury shares
Treasury shares held in portfolio are deducted from equity. No profit or loss arising from the
purchase, sale, issue or cancellation of treasury shares is recognised in the income statement.
The differences between the purchase and sale price arising from these transactions are recorded
in equity reserves.
- Provisions for guarantees granted and commitments
Provisions made on a cases by case and collective basis to estimate possible payments to be
made connected with the assumption of credit risks attaching to guarantees granted and
commitments assumed are calculated by applying the same criteria as that reported for loans.
These provisions are recognised within the item 100 “Other liabilities” against the item in the
income statement 130d “Net impairment losses on: other financial transactions”.
“Monetary” items are defined as relating to determined sums in foreign currency, which is to say to assets and
liabilities which must be received or paid for a determined amount in foreign currency. The defining characteristic
of a monetary item is therefore the right to receive or an obligation to pay a set or calculable number of foreign
currency units.
18 See the note on “monetary” items for the contrary.
17
104*
UBI Banca - Notes to the Financial Statements
- Employee benefits
Definition
Employee benefits are defined as all forms of consideration given by an enterprise in exchange
for services rendered by employees. Employee benefits can be classified as follows:

short-term benefits (not including benefits due to employees for end of contract) which it is
planned to pay entirely within twelve months from the end of the year in which the
employees provided their services;

post-employment benefits at the end of an unemployment contract due after the contract of
employment has terminated;

benefits due to employees for the ending of an employment contract;

other long-term benefits, other than the previous, which it is not planned to pay entirely
within the twelve months from end of the financial year in which employee rendered the
relative employment service.
Post-employment benefits and defined service provisions
Recognition criteria
Following the reform of supplementary pensions pursuant to Legislative Decree No. 252/2005,
portions of post-employment benefit funds maturing from 1st January 2007 constitute a “defined
benefit plan”.
The liability relating to those portions is measured on the basis of the contributions due without
the application of any actuarial methods.
However, post-employment benefits maturing up until 31st December 2006 continue to
constitute a “post-employment benefit” belonging to the “defined benefit plan” series and as such
require the amount of the obligation to be determined on an actuarial basis and to be discounted
to present values because the debt may be extinguished a long time after the employees have
rendered the relative service.
The amount is accounted for as a liability amounting to:
(a) the present value of the defined benefit obligation as at the reporting date;
(b) plus any actuarial gains (less any actuarial losses) recognised in a separate reserve in
equity;
(c) less the fair value at the reporting date of any assets at the service of the plan.
Measurement criteria
“Actuarial gains/losses”, recognised in a special valuation reserve in equity, comprise the effects
of adjustments arising from the reformulation of previous actuarial assumptions as a result of
actual experience or from changes in the actuarial assumptions themselves.
The “Projected Unit Credit Method” is used to calculate the present value. This considers each
single period of service as giving rise to an additional unit of severance payment and therefore
measures each unit separately to arrive at the final obligation. This additional unit is obtained by
dividing the total expected service by the number of years that have passed from the time service
commenced until the expected payment date. Application of the method involves making
projections of future payments based on historical analysis of statistics and of the demographic
curve and discounting these flows on the basis of market interest rates. The rate used for present
value discounting purposes is determined by making reference to market yields observed as at the
reporting date for “high quality corporate bonds” or to yields on securities with a low credit risk.
Stock Options/Stock Grants
Stock option and stock granting plans are defined as personnel remuneration schemes where
the service rendered by an employee or a third party is remunerated by using equity instruments
(including options on shares).
105*
UBI Banca - Notes to the Financial Statements
The cost of these transactions is measured at the fair value of equity instruments granted and is
recognised in the income statement under item 150 “Administrative expenses a) personnel
expense” on a straight line basis over the vesting period of the plan.
The fair value determined relates to the equity instruments granted at the time of grant and
takes account of market prices, if available, and the terms and conditions upon which the
instruments were granted.
- Segment reporting
Segment reporting is defined as the manner in which financial information on an enterprise is
reported by operating segment.
No segment reporting is given in this document because the separate company Annual Report
for UBI Banca is published together with the consolidated annual report of the UBI Banca Group
which gives that information for the Group as a whole.
- Revenues
Definition
Revenues are the gross inflow of economic benefits resulting from business arising from the
ordinary operating activities of an enterprise when these inflows create an increase in equity other
than an increase resulting from payments made by shareholders.
Recognition criteria
Revenues are measured at the fair value of the consideration received or due and are recognised
in the accounts when they can be reliably estimated.
The result of the rendering of services can be reliably estimated when the following conditions
are met:
 the amount of revenue can be measured reliably;
 it is probable that the economic benefits arising from the transaction will flow to the
company;
 the stage of completion of the operation as at the reporting date can be measured reliably;
 the costs incurred, or to be incurred, to complete the transaction can be measured reliably.
Revenue recognised in return for services rendered is recognised by reference to the stage of
completion of the transaction.
Revenue is only recognised when it is probable that the economic benefits arising from the
transaction will be enjoyed by the company. Nevertheless when the recoverability of an amount
already included within revenues is uncertain, the amount not recoverable or the amount for
which recovery is no longer probable is recognised as a cost instead of adjusting the revenue
originally recognised.
Revenue arising from the use by third parties of the company’s assets which generate interest or
dividends are recognised when:
 it is probable that the economic benefits arising from the transaction will be received by the
enterprise;
 the amount of the revenue can be reliably measured.
Interest is recognised on an accruals basis that takes into account the effective yield of the
asset. In detail:
 interest income includes the amortisation of any discounts, premiums or other differences
between the initial carrying amount of a security and its value at maturity. Negative
components of income accruing on financial instruments are recognised within the item
“Interest and similar expense”, while positive components accruing on financial liabilities are
recognised within the item “Interest and similar income”;
 arrears of interest that are considered recoverable are recognised within the item 10 “Interest
and similar income”, but only the part considered recoverable.
106*
UBI Banca - Notes to the Financial Statements
Dividends are recognised when shareholders acquire the right to receive payment.
Expenses or revenues resulting from the sale or purchase of financial instruments, determined
by the difference between the amount paid or received for the transaction and the fair value of the
instrument are recognised in the income statement on initial recognition of the financial
instrument when the fair value is determined:
 by making reference to current and observable market transactions in the same instrument;
 by using measurement techniques which use, as variables, only data from observable
markets.
- Expenses
Expenses are recognised in the accounts at the time at which they are incurred while following
the criteria of matching expenses to revenues that result directly and jointly from the same
transactions or events. Expenses that cannot be associated with revenues are recognised
immediately in the income statement.
Expenses directly attributable to financial instruments measured at amortised cost and
determinable from the outset, regardless of the time at which they are settled, flow to the income
statement by applying the effective interest rate, a definition of which is given in the section
“Loans and receivables”.
Impairment losses are recognised through profit and loss in the year in which they are
measured.
107*
UBI Banca - Notes to the Financial Statements
A.3 – INFORMATION ON TRANSFERS BETWEEN PORTFOLIOS OF
FINANCIAL ASSETS
No reclassifications have been performed either in the current year, or in the previous year in
financial asset portfolios from asset classes recognised at fair value into classes recognised at
amortised cost with regard to the possibilities introduced by EC Regulation No. 1004/2008 of the
European Commission.
A.4 – INFORMATION ON FAIR VALUE
Qualitative information
IFRS 13 – “Fair Value Measurement” defines fair value as the price that would be received to
sell an asset or paid to transfer a liability in an orderly transaction between market participants
at the measurement date. This value is therefore what is known as an “exit price” which reflects
the properties of the asset or liability subject to measurement from the perspective of a third party
market participant.
A fair value measurement relates to an ordinary transaction carried out or which could be
carried out between market participants, where, the market is defined as:
 the principal market, which is the market with the highest volume and level of transactions for
the asset or liability in question to which the Bank has access;
 or, in the absence of a principal market, the most advantageous market, which is that in which
it is possible to obtain the highest price for the sale of an asset or the lowest purchase price for
a liability with account taken of transaction and transport costs.
To increase consistency and comparability in fair value measurements and related disclosures,
IFRS 13 establishes a fair value hierarchy that categorises into three levels the inputs to valuation
techniques used to measure fair value.
The objective of this classification is to establish a hierarchy in terms of the objectivity of the
fair value as a function of the degree of discretion adopted, by giving priority to observable market
inputs which reflect the assumptions that market participants would use in the measurement of
assets and liabilities.
The fair value hierarchy is defined on the basis of the data inputs (with reference to their
origin, type and quality) using the models for determining fair value and not on the basis of the
measurement models themselves. In this perspective the highest priority is given to input level
one.
Fair value determined on the basis of level one inputs:
Fair value is determined on the basis of observable inputs, i.e. quoted prices in active markets
for the financial instrument, that the entity can access at the measurement date of the
instrument. The existence of quoted prices in an active market is the most reliable evidence of fair
value and therefore these quoted prices shall be given priority as the input to be used in the
valuation process.
According to IFRS 13, a market is defined as active when transactions for the asset or liability
take place with sufficient frequency and volume to provide pricing information on an ongoing
basis.
More specifically, equities and bonds quoted on a regulated market (e.g. MOT/MTS – electronic
corporate/government bond markets) and those not quoted on regulated markets for which prices
are available on a continuous basis from the main information platforms which represent actual
and orderly market transactions.
The fair value of listed securities on regulated markets is normally given by the reference price
published on the last trading day of the reporting period on the respective markets on which they
108*
UBI Banca - Notes to the Financial Statements
are quoted. For securities not quoted on regulated markets, the fair value is given by the price on
the last transaction date considered representative on the basis of internal policies.
As concerns other financial instruments with a level one input such as for example, derivatives,
exchange traded funds and listed property funds, the fair value is given by the closing price on the
respective listed markets on the measurement date or in the case of listed UCITS, mutual funds,
Sicav’s and hedge funds, it is given by the official NAV (net asset value), if this is considered
representative according to internal policies.
Fair value determined on the basis of level two inputs
Where no prices are available on active markets, the fair value is measured by using prices
observable on inactive markets or by using measurement models which make use of market
inputs.
The valuation is performed by using inputs that are either directly or indirectly observable, such
as for example:

prices listed on active markets for identical assets or liabilities;

observable inputs such as interest rates or yield curves, implicit volatilities, early repayment
risk, default rates and illiquidity factors.
On the basis of the above, the valuation resulting from the technique adopted involves marginal
use of unobservable inputs because the most important inputs used in the valuation are taken
from the market and the results of the calculation methods used replicate quotations on active
markets.
The




following are included in level two:
OTC derivatives;
equity instruments;
bonds;
shares of private equity funds
Assets and liabilities measured at cost or at amortised cost, for which the fair value is given in
the notes to the financial statements purely for information purposes, are classified in level two
only if the unobservable inputs do not have a significant impact on the result of the valuation.
Otherwise they are classified in level three.
Fair value determined on the basis of level three inputs
The valuation is determined by the use of significant inputs not taken from the market, which
therefore involve the adoption of estimates and internal assumptions.
The following are included in level three of the fair value hierarchy:
 OTC derivatives
 equity instruments measured:
a. with the use of significant unobservable inputs;
b. using methods based on an analysis of the fundamentals of the investee;
c. at cost.
 hedge funds, for which consideration is given not only to the official NAVs but also to liquidity
and/or counterparty risk;
 options on financial equity investments;
 bonds resulting from the conversion of loans and receivables.
Finally, fair value is classified in level three as a result of the use of market inputs that have
been adjusted significantly to reflect valuation aspects inherent to the instrument measured.
109*
UBI Banca - Notes to the Financial Statements
A.4.1 Fair value levels two and three: measurement techniques and the inputs used
This sub-section provides information on the measurement techniques and inputs used to
determine the fair value of assets and liabilities subject to measurement in the balance sheet and
those for which the fair value is given purely for information purposes.
Assets and liabilities subject to fair value measurement
OTC derivatives
The method adopted to calculate the fair value of OTC derivatives involves the use of closed
formula models. In detail, the main pricing models used for OTC derivatives are: Black Yield,
Black Fwd, Black Swap Yield, Cox Fwd, Trinomial, Lnormal, Normal and CMS Convexity
Analytical.
Derivative instruments that are not managed in the target software applications, relating to
instruments used to hedge some types of embedded options in structured bonds issued, are
measured using internal models (stochastic models with MonteCarlo simulations).
The pricing models implemented for derivatives are used on an ongoing basis and are subject to
periodic verification designed to assess their reliability over time.
The market data used to calculate the fair values of derivatives is classified, according to its
availability, as follows:

the prices of quoted instruments: all products quoted by major international exchanges or
on the main data provider platforms;

market inputs available on info provider platforms: all instruments which, although not
quoted on an official market, are readily available on info provider networks by means of
guaranteed ongoing contributions from brokers and market makers.
The inputs used to calculate the fair value of OTC derivatives include yield curves and
Cap&Floor volatilities for major currencies (euro, US dollar, GBP, yen, CHF), the main exchange
rates and the relative volatilities and the FX swap points. As explained later in greater detail, the
fair value of some types of OTC derivatives takes counterparty risk into account. The calculation
of this component is carried out by using default probabilities and the percentage of credit
recovery from counterparties.
As concerns credit risk, market practice is to adopt two measures capable of identifying the
impacts of possible changes in counterparty credit rating and incorporating this in the fair value:
credit value adjustment (counterparty non-performance risk) and debt value adjustment (own
non-performance risk).
The approach adopted by the Group to calculate these measurements, termed the “spread
curve” method, involves the use of credit spread curves to calculate the two components. More
specifically it involves the following steps:

an estimate of the future cash flows of the OTC derivative using risk free curves. The
resulting net cash flow calculated is then discounted using counterparty credit curves (for positive
cash flows) or UBI Banca’s credit curve (negative cash flows) described in the points below;

the creation of an “adjusted” curve for the counterparty, obtained by applying the relative
spread to the risk-free discount curve, for each maturity;

the creation of an “adjusted” curve for UBI Banca, obtained by applying the relative spread
to the risk-free discount curve, for each maturity.
The method implemented by the group is applied to OTC derivatives in the Group’s portfolio,
entered into with external counterparties for which CSA agreements exist with complete daily or
weekly margin accounts.
Given the predominant use of unobservable inputs, the fair value of OTC derivatives is classified
in level two of the hierarchy, except for those derivatives where the CVA (estimated internally) is
important for determination of the fair value. The fair value of these instruments is classified in
fair level three of the hierarchy.
110*
UBI Banca - Notes to the Financial Statements
The UBI Banca Group’s policy for options on equities is to measure the fair value by taking
account of the probability of exercise given the specific nature of the options in question. The fair
value calculated in this way is classified in level three of the hierarchy.
Equity instruments
As concerns the methods used to measure the fair value of equity instruments not quoted on an
active market, the UBI Banca Group has identified the following hierarchy of valuation
techniques:
1)
the direct transactions method;
2)
the comparable transactions method;
3)
the stock market multiples method
4)
financial and earnings methods;
5)
balance sheet methods.
Equity instruments are measured by considering the applicability of the methods in the order
given above. In the final instance, where it is impossible to use the above techniques, these
instruments are measured at cost.
The characteristics of the valuation techniques used as at 31st December 2015 are given below.
The direct transactions method
Application of the direct transactions method involves applying the implicit value resulting from
the most recent significant transaction recorded on the shares of the investee. By using
observable inputs, the fair value thereby obtained is classified in level two of the hierarchy.
If the transaction that occurred on the market involved a controlling stake or one which gave
significant influence over the investee by the acquirer, then it is possible that the price paid
incorporated a premium for control. This aspect is considered by a possible adjustment to the
value of the investment. Therefore the pro rata value of the economic capital of the company is
reduced by between 25% and 35%. That adjustment, resulting from the use of unobservable and
significant inputs results in classification of the fair value in level three of the hierarchy.
The comparable transactions method
Application of the comparable transactions method involves analysis of transactions to purchase
shares in companies with operating and capital characteristics of the same type as those of the
investee and the subsequent calculation of an implicit multiple given by the transaction price. By
using observable inputs, the fair value thereby obtained is classified in level two of the hierarchy.
If the transaction that occurred on the market involved a controlling stake or one which gave
significant influence over the investee by the acquirer, then it is possible that the price paid
incorporated a premium for control. This aspect is considered by a possible adjustment to the
value of the investment. Therefore the pro rata value of the economic capital of the company is
reduced by between 25% and 35% to reflect the lack of powers within the investee. That
adjustment, resulting from the use of unobservable and significant inputs results in classification
of the fair value in level three of the hierarchy.
The stock market multiples method
This method allows a company to be valued on the basis of data derived from quotations of
comparable companies (in terms of sales turnover, equity, leverage) observed on the relative stock
market in a period within the last 30 days and last year prior to the measurement date. It is
performed by processing the most significant multipliers (stock market multiples) resulting from
the ratio between the value that the stock market attributes to these companies and those of their
operating and capital performance indicators that are considered most significant. By using
observable inputs, the fair value thereby obtained is classified in level two of the hierarchy.
The need to adjust the valuations obtained, which is not infrequent, when applying the stock
market multiple methods in order to take account of possible differences in the compatibility of
111*
UBI Banca - Notes to the Financial Statements
the companies used and the liquidity of the instruments measured, the pro rata value of the
economic capital of the company is reduced by between 10% and 40% to reflect the limited
liquidity of the investment and/or significant differences in size between the investee and the
companies in the sample. This adjustment, resulting from the use of unobservable and significant
inputs results in the classification of the fair value in level three of the hierarchy.
Balance sheet methods
Balance sheet methods provide a calculation of the fair value of an investee based on balance
sheet figures, adjusted in the light of gains and losses implicit in the assets and liabilities of the
investee and the possible valuation of intangible components. The fair value determined by using
these methods, based on unobservable inputs, is classified in level three of the hierarchy.
Bonds
The procedure for estimating the fair value adopted by the UBI Banca Group for bonds involves
the use of a specific valuation model, the discounted cash flow model. The valuation process in
question can be summarised in the following steps:

an estimate of the cash flows paid by the instrument both in terms of interest and
repayment of capital;

an estimate of the spread which represents the credit rating of the issue of the instrument;

an estimate of a spread which represents the illiquidity of the instrument in order to take
account of the low liquidity which characterises the pricing of a “non-contributed” instrument (not
officially quoted).
Given the predominant use of unobservable inputs, the fair value thereby calculated is classified
in level two of the hierarchy, except for those instruments where the component of the spread that
represents the illiquidity is important for determining the fair value and for some bonds resulting
from the conversion of loans and receivables, which are classified in level three of the hierarchy.
The following are comprised within the inputs used to calculate the fair value of bonds: interest
rate curves of major currencies (euro, US dollar, GBP, yen, CHF), the credit spreads of the issuers
of the bond subject to measurement (taken from instruments quoted on markets considered
active) and a spread representative of the illiquidity of the instrument measured, calculated on the
basis of the credit spread of the issuer.
Shares of private equity funds
The fair value of shares in private equity funds is calculated on the basis of the last NAV
available and considering the various communications received from the fund (e.g. redemptions,
dividend distributions) from the date of the last available NAV until the measurement date. The
NAV is then adjusted if necessary to take into consideration situations of particular risk and nonperformance associated with the investment.
Shares of hedge funds
The fair value of shares of hedge funds is classified in level three of the hierarchy and is
calculated on the basis of the official NAV adjusted by a percentage of at least 20% to take
account of liquidity and/or counterparty risks.
112*
UBI Banca - Notes to the Financial Statements
Assets and liabilities, the fair value of which is given in the notes to the financial
statements
Loans and receivables
Determination of the fair value of loans and advances to customers, calculated for disclosure
in the notes to the financial statements, is carried out by using valuation techniques, except for
those loans and receivables for which the book value is considered an adequate representation of
the fair value, such as for example defaulted loans, transactions with no repayment schedules
(current account overdrafts and unsecured guarantees) and loans due in less than one year which
for that reason are classified in level three of the hierarchy.
The method adopted by the UBI Banca Group to estimate the fair value of loans and receivables
involves discounting cash flows, defined as the sum of the principal and interest resulting from
the different due dates of the repayment schedule, reduced by the amount of the expected loss
and discounted at a rate which incorporates the risk-free component and a spread representing
the cost of capital and funding.
More specifically, the following inputs are used:

a base discount rate, based on the Euribor yield curve;

default risk and risk of potential loss, expected and unexpected, measured on the specific
loan during its entire life. These values are represented by internal credit risk measurement
parameters such as the rating, the PD and LGD, differentiated by customer segment. The PD
associated with each rating is measured on a multi-year basis. Finally, the unexpected loss
component takes account of the Group’s cost of equity;

the UBI Banca Group’s funding components. These components are based on the average
cost of financing incurred by the Group in the wholesale, retail and covered bond markets with a
ten-year cap.
In order to identify the correct level in the fair value hierarchy obtained using the above
valuation technique, the level of significance of the unobservable inputs must be properly
assessed.
In this respect, the fair value resulting from the application of the method described above is
compared with a benchmark that is calculated which employs a discount curve composed from
observable market data.
If the comparison shows that the fair value is significantly different from that calculated using
the aforementioned benchmark, the fair value is classified in level three. Otherwise it is classified
in fair value level two.
The fair value of loans and advances to banks is normally calculated for the purposes of
disclosure in the notes to the financial statements for on-balance sheet transactions with a time
horizon of longer than one year.
The method adopted involves calculating the net present value of the cash flows from these
instruments on the basis of the current market interest rate for transactions of the same
duration, inclusive of the risk factors implicit in the transaction. Because this method is based on
observable inputs, it results in classification of the fair value in level two of the hierarchy.
For transactions with no repayment schedules (current account overdrafts and unsecured
guarantees), for defaulted loans and for transactions with a maturity of shorter than one year, the
book value is considered an adequate approximation of the fair value, which as a consequence
results in classification in level three of the hierarchy.
Tangible assets held for investment
Reference is made for the determination of the fair value of investment properties to the market
value, determined mainly by means of outside appraisers, defined as the highest price at which
113*
UBI Banca - Notes to the Financial Statements
the sale of a property might reasonably be expected to have been concluded unconditionally for
cash consideration on the measurement date between independent counterparties.
The procedures adopted for determining the market value are based on the following methods:

the direct comparative or market method, based on a comparison between the
asset in question and other similar assets subject to sale or currently on sale on the same market
or on competing markets. The quotations obtained are subject to adjustments designed to
incorporate the specific characteristics of the asset. More specifically, the value attributed to the
asset considers its location, accessibility, quality and the possible presence of unique aspects.

the income method based on the present value of potential market incomes for a
similar property, obtained by capitalising the income at a market interest rate. This method is
based on the existence of a direct relationship between an asset and the income that it is able to
generate. For the purposes of the income regression, reference is usually made to the average
ordinary gross income calculated on the basis of the total gross commercial area.
The above methods are carried out individually and the values obtained are appropriately
averaged.
The method used for identifying the percentage of the market value attributable to land is based
on an analysis of the location of the property, taking account of the type of construction, the state
of conservation and the cost of rebuilding the entire building.
The fair value determined in this manner is classified in level three of the hierarchy due to the
absence in the Italian market of reference indicators which might confirm the reliability of the
valuation. As a consequence, the inputs used cannot be classified in level two.
Borrowings and payables
The fair value of amounts due to banks and customers is normally calculated for the purposes of
disclosure in the notes to the financial statements for liabilities due after one year.
The valuation is carried out by discounting future cash flows using an interest rate that
incorporates the component relating to its own credit risk. Since it is based on observable inputs
from the relative market, this method results in the classification of the fair value in level two of
the hierarchy.
For liabilities due within one year or with an indeterminate due date, the book value recognised
can be considered an adequate approximation of the fair value, which as a consequence results in
classification in level three of the hierarchy.
This classification is also adopted for amounts due to the European Central Bank.
Securities issued
As these are liabilities issued, held as assets by third parties, the valuation techniques used
have been developed from the perspective of a market participant who holds the debt securities as
assets. In this specific case the components considered are as follows:

the time value of the money, measured by the risk-free yield curve;

the risk of failing to satisfy own obligations, measured by own credit spread.
The inputs used to measure the fair value include the yield curves of major currencies (euro, US
dollar, GBP, yen, CHF) and UBI Banca’s issue spreads, measured from the funding conditions
existing as at the reporting date, classified by type of counterparty for whom the security issued is
destined.
The inputs used are observable and result in classification in level two of the hierarchy, except
for bonds issued by the Bank linked to loans granted to customers. In these cases the fair value of
the security is determined using the loan inputs themselves and both instruments are classified
in level three of the hierarchy.
114*
UBI Banca - Notes to the Financial Statements
A.4.2 Valuation processes and sensitivities
The UBI Banca Group has set a special policy for the determination of fair values officially set
out in special regulations approved by the members of governing bodies. The purpose of these
policies is to ensure proper and consistent application of the provisions of IFRS 13
An analysis is given below of the sensitivity of equity instruments for which the fair value
measurement is classified in level three of the hierarchy as a result of the use of unobservable
significant inputs.
This analysis was conducted by formulating a stress test for the inputs in question, which takes
account of the minimum and maximum value that these inputs can take, reported for each
valuation technique used in the previous sub-section A.4.1 “Fair value levels two and three”.
For equity instruments classified within the AFS portfolio for which sensitivity analysis is
possible, on the basis of the valuation model used, if the maximum impairment value for the
unobservable inputs is used, the gross valuation reserve would be €6.7 million lower than the
book value recognised if no further impairment was detected. Otherwise, if the minimum
impairment value is used, the gross valuation reserve would be €13.3 million higher than the
book value recognised.
For equity instruments classified within the FVO portfolio for which sensitivity analysis is
possible, on the basis of the valuation model used, if the minimum impairment value for the
unobservable inputs is used, the amounts recognised in the income statement item 110 ”Net
income of financial assets and liabilities designated at fair value” would be €1.8 million higher
than that recognised in the accounts. The use of the highest impairment value would, on the
contrary, have no impact.
As concerns other financial instruments subject to fair value measurement and classified within
level three of the fair value hierarchy (OTC derivatives, hedge funds, bonds resulting from the
conversion of loans and options on equity investments), no sensitivity analysis is conducted either
because the methods of quantifying the fair value do not allow alternative hypotheses to be made
concerning the unobservable inputs used for the purposes of valuation, or because the effects of
changing those inputs are not considered important.
A.4.3 Fair value hierarchy
With regard to assets and liabilities subject to fair value measurement on a recurring basis,
classification in the right level of the fair value hierarchy is carried out by making reference to
rules and methods contained in Bank regulations. Possible transfers to a different level of the
hierarchy are identified on a monthly basis. Examples might be transfers resulting from the
“disappearance” of an active market on which they are quoted or the use of a different method of
measurement not previously applicable.
A.4.4 Other information
No situations exist in the UBI Banca Group in which the maximum or best use of a nonfinancial asset is different from its current use.
Furthermore, no situations exist in which financial assets and liabilities managed on a net basis
in relation to market or credit risk are subject to fair value measurement on the basis of the price
that would be received from the sale of a net long position or from the transfer of a net short
position.
115*
UBI Banca - Notes to the Financial Statements
Quantitative information
A.4.5 Fair value hierarchy
A.4.5.1 Assets and liabilities measured at fair value on a recurring basis: distribution by fair
value level
Assets/liabilities measured at fa ir value
31.12.2015
Level 1
31.12.2014
Level 2
Level 3
Level 1
Lev el 2
Level 3
1. Financial assets held for trading
470,999
61 2,464
4,799
799, 921
742, 235
2,679
2. Financial assets designated at fair val ue
120,782
3,000
72,252
120, 026
3, 000
70,141
3. Availa ble-f or -sale financial assets
14, 855,619
34 7,987
153,965
17, 006, 618
942, 590
117,675
4. Hedging derivatives
-
59 2,046
363
-
647, 972
-
5. Property, p lant and equipment
-
-
-
-
-
-
6. Intangible assets
-
-
-
-
-
-
15,447,400
1,555,497
231,379
17,926,565
2,335,797
190,495
1. Financial liabilities held f or tr ading
7
60 8,582
11
300
721, 881
-
2. Financial liabilities d esignated at f air value
-
-
-
-
-
-
3. Hedging derivatives
-
70 0,871
-
-
937, 018
-
7
1,309,453
11
300
1,658,899
-
Tota l
Tota l
The main figures on the amounts and movements in the exposures compared with the previous
year are given in the Management Report and in the tables in the notes to the financial
statements. Greater detail is given below on the main amounts within level three:
- Financial assets held for trading:
Cogemeset 09/14 Step Coupon: €100 thousand
XMark Opportunity Fund LTD (UCITS): €546 thousand
Derivative instruments of a financial nature: €4.1 million.
- Financial assets designated at fair value:
Humanitas Spa: €20.5 million
Immobiliare Mirasole Spa ordinary: €36.9 million and privileged €3.7 million Car Testing Srl: €2.2
million;
E.C.A.S. Spa: €2.3 million
Medinvest International SCA: €1.3 million
residual shares in hedge funds: approximately €5.4 million.
- Available-for-sale financial assets, mainly:
Soc. Aeroporto Civile di Bergamo Orio al Serio: €51 million
Istituto Centrale Banche Popolari Italiane: €21.6 million
Nuova Sorgenia Holding Spa (SFP – resulting from the conversion of debt) €24.1 million.
The impact of CVA and DVA on the determination of the fair value of derivative financial
instruments came to €7.023 million and €74 thousand respectively.
No transfers were made between level one and two in the fair value hierarchy for assets and
liabilities measured at fair value on a recurring basis.
116*
UBI Banca - Notes to the Financial Statements
A.4.5.2 Annual changes in assets measured at fair value on a recurring basis (level three)
Financial asset s
held for t rading
Financia l assets
designated at fa ir
value
1. Ope ning balance s
2,679
70,141
117,675
-
-
-
2. Increases
3,326
3,539
140,011
363
-
-
2. 1. Purchases
Available -forsale financial
assets
Hedging
derivatives
Pr oper ty, plant
and equipment
Intangible
asset s
-
-
5, 179
-
-
2. 2. Profits recognised in:
25
2,895
79, 958
363
-
-
2. 2.1. Income statement
25
2,895
61, 183
363
-
-
-
363
-
-
18, 775
-
-
-
- of which gains
2. 2.2. Equity
15
X
2. 3. Transf ers fr om other levels
2,846
X
3,235
644
13, 240
-
-
-
66
-
41, 634
-
-
-
(1,206)
( 1,428)
(103,721)
-
-
-
(56)
-
(87, 241)
-
-
-
-
(84)
-
-
-
-
3. 3. Losses recognised in:
( 1,046)
(1, 121)
(16, 480)
-
-
-
3. 3.1. Income statement
( 1,046)
(1, 121)
(14, 020)
-
-
-
( 1,046)
(1, 121)
(14, 020)
-
-
-
(2, 460)
-
-
-
2. 4. Other incr eases
3. Decrea ses
3. 1.Sales
3. 2. Redemptions
- of which losses
3. 3.2. Equity
3. 4. Transf ers to other levels
X
X
(104)
-
-
-
-
-
3. 5. Other decreases
-
(223)
-
-
-
-
4. Closing balances
4,799
72,252
153,965
363
-
-
The main items subject to movement regarded the following:
Financial assets held for trading:
Increases included transfers to fair value level three, consisting mainly of derivatives for which the
counterparty credit valuation risk (€3.2 million) was higher than the thresholds identified by the
policy (10% of the gross fair value carrying amount).
The main losses recognised through profit or loss related to derivative contracts amounting to
€408 thousand, to the convertible bond Cogemeset 09/14 Step Coupon amounting to €153
thousand and to the security CS metalli Spa amounting to €445 thousand.
Financial assets designated at fair value:
The amount of €2.8 million relating to gains recognised through profit and loss mainly regarded
the following:
-
immobiliare Mirasole Spa ordinary shares: €1.3 million
immobiliare Mirasole Spa privileged shares: €126 thousand
E.C.A.S. Spa: €617 thousand
hedge funds: €776 thousand
Other increases included the currency translation effect on hedge funds amounting to €442
thousand and side pocket position switches amounting to €203 thousand.
117*
UBI Banca - Notes to the Financial Statements
Losses recognised through profit or loss mainly regarded hedge funds amounting to €909
thousand while other decreases regarded the balancing entry for the already mentioned side
pocket position switches amounting to €203 thousand.
Available-for-sale financial assets:
Increases included the following:

purchases mainly of CAPITAL FOR PROG. Spa shares amounting to €4.9 million.

Increases in equity regarded the company VISA EUROPE Ltd ORD. amounting to €3 million
and ICBPI Spa amounting to €15.2 million.

Transfers to other levels regarded the subordinated bonds BCA MARCHE 05/15 TV
amounting to €3.6 million and BCA POP. ETRURIA 06/16 amounting to €9.5 million. The
same positions resulted in decreases because they were completely written off.

Profits recognised through profit or loss regarded ICBPI Spa amounting to €61.2 million.
Other increases regarded the following:

Sorgenia Spa One Coupon convertible category A due to restructuring of the position
amounting to €16.8 million

Nuova Sorgenia Holding Spa SFP due to restructuring of the position amounting to €24.1
million.
Decreases included the following:

sales regarded ICBPI Spa amounting to €87.2 million;

losses recognised in equity relating to the company SACBO Spa amounting to €2.5 million.
Level three hedging derivatives

the amount of €363 thousand relates to the fair value component of a CCS derivative to hedge
a loan denominated in AED. Classification in level three is due to the degree of liquidity of
currency.
118*
UBI Banca - Notes to the Financial Statements
A.4.5.3 Annual changes in financial liabilities measured at fair value (level three)
Financial liabilities
held for trading
-
1. Opening balances
2. Increases
Financial liabilities
designated at fair value
hedges
-
-
11
-
-
-
-
-
11
11
-
-
X
X
-
-
-
-
-
-
-
3.3.1. Income statement
- of which gains
-
-
-
3.3.2. Equity
3.4. Transfers to other levels
3.5. Other de creases
X
-
X
-
-
-
-
2.1. Issues
2.2. Losses recognised in:
2.2.1. Income statement
- of which losse s
2.2.2. Equity
2.3. Transfers from other levels
2.4. Other incre ases
3. Decreases
3.1. Re demptions
3.2. Re purchases
3.3. Profits recognised in:
4. Closing balances
11
A.4.5.4 Assets and liabilities not measured at fair value or measured at fair value on a nonrecurring basis: distribution by fair value level
F inancial assets/liabilities meas ured at
fair value
31.12.2015
BV
BV
L1
1. Held -to-matur ity investments
3,494,547
3,599,957
-
-
3,576,951
3,6 07,6 73
-
-
2. Loans an d advances to ban ks
15,489,215
-
6,389 ,249
9,0 91,17 5
14,055,649
-
10,695,978
3,362,424
3. Loans an d advances to customers
21,901,390
-
4,530 ,784
17,6 76,01 6
23,330,321
-
13,178,073
10,373,558
496,433
-
-
6 65,86 9
512,568
-
-
689,032
2,032
-
-
-
507
-
-
-
41,3 83,61 7
3 ,5 99,95 7
10 ,920 ,0 33
2 7,433 ,0 60
41 ,4 75,99 6
3,60 7,673
23 ,8 74,05 1
14,42 5,014
15,845,354
-
-
15,8 05,89 2
19,140,417
-
-
19,207,310
7,357,586
-
-
7,3 57,68 8
7,065,270
-
-
7,075,825
36,265,240
15,426,790
2 1,404 ,087
-
36,545,668
16,2 77,4 23
21,108,815
-
-
-
-
-
-
-
-
-
59,4 68,18 0
15 ,4 26,79 0
21 ,404 ,0 87
2 3,163 ,5 80
62 ,7 51,35 5
1 6,27 7,423
21 ,1 08,81 5
26,28 3,135
4. Tangible assets held for investment
5. Non-curren t assets and disp osal groups held for sale
Tot al
1. Du e to ban ks
2. Du e to customers
3. Debt securities issu ed
4. Liab ilities associated with assets held for sale
Tot al
L1
31.12.2014
L2
L3
119*
L2
L3
UBI Banca - Notes to the Financial Statements
A.5 – INFORMATION ON “DAY ONE PROFIT/LOSS”
The information relates to paragraph 28 of the IFRS which concerns differences between
transaction prices and the value obtained by using measurement techniques that emerge on
initial recognition and that are not immediately recognised through profit and loss on the basis of
paragraph AG76 of IAS 39.
Where this type of event occurs, indication must be given of the accounting policies adopted by
the bank for recognition through profit or loss of the differences that arise in this manner
subsequent to initial recognition of the instrument.
UBI Banca has not performed any transactions for which a difference between the purchase price
and the value of the instrument obtained using internal measurement techniques has arisen on
initial recognition.
120*
UBI Banca - Notes to the Financial Statements
Part B – Notes to the balance sheet
ASSETS
Section 1 Cash and cash equivalents - Item 10 1.1 Cash and cash equivalents: composition
31.12.2015
a) C ash in hand
b) Deposits with centr al banks
Tot al
31.12.2014
138,226
160,330
-
-
138,226
160,330
The amount for cash and cash equivalents relates to the centralisation at the Parent of the
central treasury service for all the banks of the Group.
121*
UBI Banca - Notes to the Financial Statements
Section 2 Financial assets held for trading - Item 20 2.1 Financial assets held for trading: composition by type
Items/Amounts
31.12.2015
Level 1
31.12.2014
Level 2
Level 3
Leve l 1
Lev el 2
Level 3
A. On-bala nce sheet assets
1. Debt instruments
465, 497
3
100
79 4,399
407
253
1.1 Structur ed instruments
1, 714
1
100
1
402
253
1.2 Other d ebt instruments
463, 783
2
-
79 4,398
5
-
4, 580
-
-
4,504
-
445
275
-
581
241
-
601
-
-
-
-
-
-
-
-
-
-
-
-
2. Equity instruments
3. Units i n UCITS
4. Financing
4.1. Reverse r epurchase agreements
4.2 Other
Tot al A
-
-
-
-
-
-
470,352
3
681
799,144
407
1,299
B. Der iva tiv e instruments
1. Financial Derivatives:
1.1 for trading
647
612, 461
4 ,118
777
741,828
1, 380
647
612, 461
4 ,118
777
741,828
1, 380
1.2. connected with the f air value opti ons
-
-
-
-
-
-
1.3 other
-
-
-
-
-
-
-
-
-
-
-
-
2.1 for trading
-
-
-
-
-
-
2.2 connected with fair value options
-
-
-
-
-
-
2.3 other
-
-
-
-
-
-
2. Credit derivatives:
Tot al B
Total (A+B)
647
612,461
4,118
777
741,828
1,380
470,999
612,464
4,799
799,921
742,235
2,679
Financial derivatives (level two) relate to OTC transactions connected with trading activity and
were composed mainly of interest rate swaps of €544.1 million, options of €28.7 million, forwards
of €35 million and swaps on commodities of €4.7 million.
122*
UBI Banca - Notes to the Financial Statements
2.2 Financial assets held for trading: composition by debtors/issuers
Items/Amounts
31.12.2015
31.12.2014
A. ASSETS
1. Debt instrument s
a) Gover nments and central banks
465,600
795,059
463, 782
794,397
b) Other public authorities
-
-
c) Banks
2
5
d) Other issuers
2. Equity instruments
a) Banks
b) Other issuers:
- insurance companies
- financial companies
- non financial companies
- other
3. Units in UCITS
4. Financing
1, 816
657
4,580
4,949
-
-
4, 580
4,949
-
2
609
596
3, 971
4,351
-
-
856
842
-
-
a) Gover nments and central banks
-
-
b) Other public authorities
-
-
c) Banks
-
-
d) Other
-
-
471,036
800,850
369,748
442,911
Tot al A
B. DERIVATIVE INSTRUMEN TS
a) Banks
- fair value
b) Customers
- fair value
Tot al B
Tot al (A+B)
123*
247,478
301,074
617,226
743,985
1,088,262
1,544,835
UBI Banca - Notes to the Financial Statements
Section 3 Financial assets designated at fair value - Item 30 3.1 Financial assets designated at fair value: composition by type
It ems/Amounts
31.12.2015
Lev el 1
1. Debt instruments
31.12.2014
Le vel 2
Level 3
Level 1
Level 2
Lev el 3
-
-
-
-
-
-
1.1 Structur ed instruments
-
-
-
-
-
-
1.2 Other debt instruments
-
-
-
-
-
-
2. Equity instruments
1,700
3,000
66, 852
3,224
3,000
64,904
119,082
-
5, 400
116,802
-
5,237
-
-
-
-
-
-
4.1 Structur ed
-
-
-
-
-
-
4.2 Other
-
-
-
-
-
-
Total
120,782
3,000
72,252
120,026
3,000
70,141
C ost
117,088
2,481
83,907
120,026
3,000
70,141
3. Units i n UCITS
4. Financing
Level one investments in units of UCITS consisted of shares in hedge funds managed by the
company Tages Capital SGR. The amount of the shares of UCITS stated within level three relates
to the remaining value of other investments in hedge funds.
The bank has mainly classified stakes held in companies that carry out merchant banking
business within level three equities.
3.2 Financial assets designated at fair value: composition by debtors/issuers
31.12.2015
31.12.2014
Items/Amounts
1. Debt instrument s
a) Gover nments and central banks
-
-
-
-
b) Other public authorities
-
-
c) Banks
-
-
d) Other issuers
2. Equity instruments
a) Banks
b) Other issuers:
- insurance companies
-
-
71,552
71,128
-
-
71, 552
71,128
-
-
- financial companies
23, 982
24,049
- non financial companies
47, 570
47,079
- other
3. Units in UCITS
4. Financing
-
-
124,482
122,039
-
-
a) Gover nments and central banks
-
-
b) Other public authorities
-
-
c) Banks
-
-
d) Other
-
-
196,034
193,167
Total
124*
UBI Banca - Notes to the Financial Statements
Section 4 Available-for-sale financial assets - Item 40 4.1 Available-for-sale financial assets: composition by type
Items/ Amounts
31.12.2015
Le vel 1
1. Debt instruments
31.12.2014
Level 2
Level 3
Lev el 1
Le vel 2
Level 3
14, 840,900
313,310
17, 640
16, 921, 010
899,134
-
1.1 Structur ed instruments
168,669
313,310
17, 640
75, 316
641,276
-
1.2 Other debt instruments
14, 672,231
-
-
16, 845, 694
257,858
-
2. Equity instruments
2,313
-
136, 325
1, 726
45
117,675
2.1 At fa ir value
2,313
-
107, 083
1, 726
45
60,568
-
-
29, 242
-
-
57,107
12,406
34,677
-
83, 882
43,411
-
-
-
-
-
-
-
14,855,619
347,987
153,965
17,006,618
942,590
117,675
2.2 At cost
3. Units i n UCITS
4. Financing
Total
Debt instruments - Structured instruments under item 1.1, are composed as follows:
- investments in bonds issued by major national and international banks, financial institutions
and companies for an amount of €168.7 million classified in level one;
- investments in bonds issued by Italian banks amounting to €158.7 million and in Italian
government securities amounting to €154.6 million, classified in level two;
- a bond issued by Sorgenia Spa amounting to €17.6 million for level three.
Debt instruments - Other debt instruments under item 1.2, are composed as follows:
- investments in bonds issued by major national and international banks, financial institutions
and companies amounting to €505.9 million and in Italian government securities amounting to
€14.2 billion for level one.
The equity instruments and UCITS measured at fair value in level three were composed
mainly as follows:
- level one: Polis portafoglio immobiliare amounting to 12.4 million, VISA Inc. Class A shares
amounting to €2.2 million and Gabetti Spa amounting to €146 thousand;
- level two: mainly investments in private equity funds amounting to €34.7 million;
- level three: mainly investments in the following companies:
- Soc. Aeroporto Civile di Bergamo Orio al Serio: €51 million
- Istituto Centrale Banche Popolari Italiane: €21.6 million
- Nuova Sorgenia Holding Spa (SFP – resulting from the conversion of debt) €24.1 million.
125*
UBI Banca - Notes to the Financial Statements
4.2 Available-for-sale financial assets: composition by debtors/issuers
31.12.2015
Ite ms/Amounts
1. Debt instrument s
a) Gover nments and central banks
b) Other public authorities
31.12.2014
15,171,850
17,820,144
14, 320,938
17,122, 835
-
-
c) Banks
262,488
464, 564
d) Other issuers
588,424
232, 745
138,638
119,446
23,080
33, 980
115,558
85, 466
- insurance companies
2,825
2, 825
- financial companies
12,136
3, 382
100,346
79, 009
2. Equity instruments
a) Banks
b) Other issuers:
- non financial companies
- other
3. Units in UCITS
4. Financing
251
250
47,083
127,293
-
-
a) Gover nments and central banks
-
-
b) Other public authorities
-
-
c) Banks
-
-
d) Other
-
-
15,357,571
18,066,883
Tot al
126*
UBI Banca - Notes to the Financial Statements
4.3 Available-for-sale financial assets: subject to specific hedging
Ite ms/Amounts
31.12.2015
1. Financial assets subject to fair value specific hedge
31.12.2014
12,530, 669
13,083, 168
12,530, 669
13,083, 168
b) price risk
-
-
c) currency risk
-
-
d) credit risk
-
-
e) multiple risks
-
-
-
-
a) interest rate risk
-
-
b) curr ency risk
-
-
12,530,669
13,083,168
a) interest rate risk
2. Financial assets subject to cash f low specif ic hedge
c) other
Tot al
The assets subject to specific fair value hedges on interest rate risk consisted of debt instruments
issued by the Italian government and by major Italian banks. Fair value changes in the
instruments in question and the relative hedging contracts are recognised within item 90 of the
income statement – “net hedging income”.
Section 5 Held-to-maturity investments – Item 50 –
5.1 Held-to-maturity investments: composition by type
31.12.2015
Fair value
Carrying
a mount
1. Debt instruments
- structured
- other
2. Financing
31.12.2014
Level 1
Level 2
Fair v alue
Carrying
amount
Level 3
Level 1
Lev el 2
Lev el 3
3,494,547
3,599, 957
-
-
3,576,951
3, 607,673
-
-
-
-
-
-
-
-
-
3,494,547
3,599, 957
-
-
3,576,951
3, 607,673
-
-
-
-
-
-
-
-
-
-
This item is composed of Italian government securities acquired with a view to supporting net
interest income.
127*
UBI Banca - Notes to the Financial Statements
5.2 Held-to-maturity investments: debtors/issuers
Type of transaction/ Values
31.12.2015
1. Debt instrument s
31.12.2014
3,494,547
3,576,951
3, 494,547
3,576, 951
a) Gover nments and central banks
b) Other public authorities
-
-
c) Banks
-
-
d) Other issuers
-
-
2. Financing
a) Gover nments and central banks
-
-
-
-
b) Other public authorities
-
-
c) Banks
-
-
d) Other
-
-
Tot al
3,494,547
3,576,951
Totale fair value
3,599,957
3,607,673
5.3 Held-to-maturity investments subject to specific hedging
There are no held-to-maturity investments subject to specific hedging.
Section 6 Loans and advances to banks - Item 60 6.1 Loans and advances to banks: composition by type
31.12.2015
Type of transaction/Amounts
VB
A. Loans to central banks
FAIR VALUE
FAIR VALUE
Level 1
Level 2
Level 3
37 5,735
1. Term deposits
2. Compulso ry reserve requirement
31.12.2014
FAIR VALUE
-
-
375 ,7 35
BV
5 28 ,3 11
FAIR VALUE
FAIR VALUE
Level 1
Level 2
FAI R VALUE
Level 3
-
-
52 8,311
-
X
X
X
-
X
X
X
375,735
X
X
X
528 ,311
X
X
X
3. Reverse repurchase agreements
-
X
X
X
-
X
X
X
4. Other
-
X
X
X
-
X
X
X
-
6,38 9,249
8,71 5,44 0
-
10 ,6 95,97 8
2 ,8 34,11 3
B. Loans to banks
15,11 3,480
8,811,154
-
8,715,440
7 ,794 ,294
-
4 ,960 ,628
2,834,113
1.1. Current accounts and deposits
2,026,466
X
X
X
2 ,767 ,764
X
X
X
1.2. Term deposits
1,681,145
X
X
X
2 ,430 ,572
X
X
X
1.3. Other financing:
5,103,543
X
X
X
2 ,595 ,958
X
X
X
687,358
X
X
X
1 ,872 ,501
X
X
X
1. Financing
- Reverse repurchase agreements
- Finance leases
- Other
2. Debt instruments
-
13 ,5 27 ,3 38
-
X
X
X
-
X
X
X
4,416,185
X
X
X
723 ,457
X
X
X
6,302,326
2.1. Structured securities
2.2. Other debt instruments
Total
-
45,025
X
6,257,301
X
15,48 9,215
6,3 89,2 49
-
X
X
X
-
6,38 9,249
X
9 ,0 91,17 5
5 ,733 ,044
-
5 ,735 ,350
-
437 ,422
X
X
X
5 ,295 ,622
X
14 ,0 55 ,6 49
X
-
10,69 5,97 8
X
3 ,362 ,4 24
The item A.2 contains the deposit with the Bank of Italy relating to the compulsory reserve.
UBI Banca performs its lending activities mainly to the banks in the Group.
128*
UBI Banca - Notes to the Financial Statements
The main items included the following:
current accounts and deposits with Group banks amounting to €1.2 billion and to €0.8
billion with other banks (mainly margin deposits on derivatives);
term deposits amounting to €1.6 billion relating primarily to transactions with Group
banks;
other financing includes reverse repurchase agreements of €0.7 billion entered into with
Group banks;
debt instruments – intragroup amounting to €6.3 billion (of which €2.4 billion PO mirrors).
6.2 Loans and advances to banks subject to specific hedging
The Bank has no specific hedging contracts for loans to banks.
6.3 Finance leases
The Bank has no existing loans for finance leases
129*
UBI Banca - Notes to the Financial Statements
Section 7 Loans and advances to customers - Item 70 7.1 Loans and advances to customers: composition by type
31.12.2015
31.12.2014
Carrying amount
Fair value
Carrying amount
Performing
L1
Purchased
L2
L3
Fair value
Non-perf orming
(previo usly termed
"deteriorated")
Non-performing (previously
t ermed "deteriorated")
Type of transaction/Amounts
Performing
Other
Purchased
L1
L2
L3
Other
20 ,5 75,21 2
-
1,21 4,834
-
4 ,425 ,8 64
17 ,6 74 ,9 29
21 ,9 38,18 4
-
1 ,280 ,7 77
-
13,07 2,44 5
10 ,3 72 ,5 41
833,118
-
464
X
X
X
1,025,653
-
674
X
X
X
2. Reverse repurchase agreements
1,169,090
-
-
X
X
X
1,253,175
-
-
X
X
X
3. Mortgages
9,224,609
-
1,098,689
X
X
X
9,539,754
-
1,065 ,071
X
X
X
576,377
-
85,907
X
X
X
769,791
-
98 ,160
X
X
X
Financing
1. Current account overdrafts
4. Credit cards, personal loans and
salary- backed lo ans
5. Finance leases
6. Factoring
7. Other financing
Debt instruments
8. Structured securities
9. Other debt instruments
Total
-
-
-
X
X
X
-
-
-
X
X
X
6,054
-
-
X
X
X
6,118
-
-
X
X
X
8,765,964
-
29,774
X
X
X
9,343,693
-
116 ,872
X
X
X
1 11,34 4
-
-
-
10 4,92 0
1,087
1 11,36 0
-
-
-
10 5,628
1,017
110,091
-
-
X
X
X
110,100
-
-
X
X
X
1,253
-
-
X
X
X
1,260
-
-
X
X
20 ,6 86,55 6
-
1,21 4,834
22 ,0 49,54 4
-
1 ,280 ,7 77
-
4,53 0,78 4
17 ,6 76,01 6
-
13,17 8,07 3
X
10 ,3 73,5 58
Details are given below of the most important positions:
- current accounts accounted for intragroup transactions amounting to €681 million. The
remaining €153 million relates to business with institutional customers;
- reverse repurchase agreements relate to transactions with UBI Leasing SpA amounting to
€398.6 million and to €770.5 million with the Cassa di Compensazione e Garanzia (central
counterparty clearing house) as part of liquidity position management;
- mortgages relate to intragroup transactions of €1.7 billion and to non-intragroup
transactions of €8.6 billion. These include the portion arising from the merger of Centrobanca
amounting to €4.5 billion (of which €559 million classified as non-performing – termed
“deteriorated” in previous financial reports), while those mortgages relating to the former B@nca
24-7 amount to €4.1 billion (including €540 million of non-performing positions);
- the other transactions regarded financing for Group companies of €7.4 billion and a loan to
the National Resolution Guarantee Fund of €0.5 billion. Non-intragroup positions amounting to
€1.4 billion relate mainly to collateral financing of €463.8 million with the Cassa di
Compensazione e Garanzia (a central counterparty clearing house) and €252.9 million of financing
arising from the Centrobanca Spa merger (of which €15.2 million non-performing – previously
termed “deteriorated”).
- debt instruments consist of intragroup transactions of €110 million all subject to
subordination clauses.
130*
UBI Banca - Notes to the Financial Statements
7.2 Loans and advances to customers: composition by debtors/issuers
Type of tr ansaction/Amounts
31.12.2015
31.12.2014
Non-per for ming
(previously termed "deteriorated")
Performing
Purchased
1. Debt instrument s
Non-perfor ming
(previously termed "deteriorated")
Per forming
Other
Pur cha sed
Other
111,344
-
-
111,360
-
-
a) Governments
-
-
-
-
-
-
b) Other public authorities
-
-
-
-
-
-
111,344
-
-
111,360
-
-
c) Other issuers
- non financial companies
1,256
-
-
1,263
-
-
110,088
-
-
110,097
-
-
- insurance companies
-
-
-
-
-
-
- other
-
-
-
-
-
-
20,575,212
-
1, 214,834
21,938,184
-
1,280, 777
-
- f inancial companies
2. Financing to:
a) Governments
b) Other public authorities
c) Other
- non financial companies
- f inancial companies
- insurance companies
- other
Total
3,973
-
-
4,651
-
21,564
-
-
24,856
-
-
20,549,675
-
1, 214,834
21,908,677
-
1,280, 777
3,709,326
-
544,466
3,771,468
-
649, 262
12,478,929
-
27,295
13,051,110
-
27, 421
98,038
-
-
98,050
-
-
4,263,382
-
643,073
4,988,049
-
604, 094
20,686,556
-
1,214,834
22,049,544
-
1,280,777
7.3 Loans and advances to customers: assets subject to specific hedging
Type of t ransact ion/Amounts
31.12.2015
1. Loans subject to fair value specif ic hedge:
31.12.2014
28,264
29,609
28,264
29,609
b) curr ency risk
-
-
c) credit risk
-
-
d) multiple risks
-
-
-
-
a) interest rate risk
-
-
b) curr ency risk
-
-
c) other
-
-
28,264
29,609
a) interest rate risk
2. Loans subject to cash flow specifi c hedge:
Tot al
Assets subject to specific fair value hedges on interest rate risk consisted of loans granted to nonintragroup customers, the change in the fair value of which together with that of the relative
hedging contracts, is recognised within item 90 of the income statement – “net hedging income”.
7.4 Finance leases
No finance leases with customers were recognised.
131*
UBI Banca - Notes to the Financial Statements
SECTION 8
Hedging derivatives - Item 80
8.1 Hedging derivatives: composition by type of hedge and hierarchical level
NA 31.12.2015
FV 31.12.2015
L1
L2
A. Financial deriv ativ es
NA
31.12.2014
FV 31.12.2014
L3
L1
L2
L3
-
592,046
363
20,163,247
-
647,972
-
23,526,955
1) Fai r value
-
592,046
-
20,135,573
-
647, 972
-
23, 526,955
2) Cash flow
-
-
363
27,674
-
-
-
-
3) Foreign investments
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
B. Credit deriv ativ es
1) Fai r value
2) Cash flow
Total
-
-
-
-
-
-
-
-
-
592,046
363
20,163,247
-
647,972
-
23,526,955
Legend
NA = notional amount
L1 = Level 1
L2 = Level 2
L3 = Level 3
Financial derivatives consist almost exclusively of interest rate hedges of the interest rate swap
type on the bonds issued. The fair value movement is recognised in item 90 of the income
statement – Net profit hedging income (loss).
8.2 Hedging Derivatives: composition by portfolios hedged and type of hedge
Fair Value
Transactions /Type of hedge
Specifi c
Interest rate risk
1. A vailable-fo r-sale financial assets
2. Loans
3. Held-t o-maturit y investments
x
4. Portfo lio
x
5, Ot her transact ions
Total assets
1. Financial liabilities
2. Portfo lio
Total liabilities
Currency ri sk
Macro- hedge
Credit risk
Price risk
7,572
-
-
-
-
-
x
x
Specif ic
x
x
x
-
x
-
x
x
-
x
363
x
x
-
x
-
x
x
-
-
-
-
-
-
x
-
-
-
-
-
584,474
x
584,474
x
-
x
-
x
-
Macro-hedge
Multiple risks
7,572
x
Forei gn
investments
C as h flow
-
-
x
x
x
x
x
2. Portfo lio of financial assets and
liabilities
x
x
x
x
x
132*
-
-
-
x
x
x
-
-
x
x
x
x
x
-
363
x
x
1. E xpected trans actions
x
x
x
x
-
-
UBI Banca - Notes to the Financial Statements
Section 9 Change in the fair value of financial assets subject to macro-hedge
- Item 90 9.1 Fair value change in hedged assets: composition by portfolios hedged
Fa ir value change in hedged assets / Amounts
31.12.2015
31.12.2014
1. Positiv e changes
4,637
5,583
1. 1 of specific portfolios:
4,637
5,583
4,637
5,583
-
-
a) loans and r eceivabl es
b) available-for-sale f inancial assets
1. 2 general
-
-
2. Negative changes
-
-
2. 1 of specific portfolios
-
-
-
-
a) loans and r eceivabl es
b) available-for-sale f inancial assets
-
-
-
-
4,637
5,583
2. 2 general
Total
9.2 Assets subject to interest rate risk macro hedge
Hedged assets
31.12.2015
1. Loans
2. Availa ble-f or -sale financial assets
3. Portfolio
Tot al
31.12.2014
81,731
108,283
-
-
-
-
81,731
108,283
Total assets subject to fair value macro hedges on interest rate risk consisted of loans, the change
in value of which together with that of the relative hedging contracts, is recognised within item 90
of the income statement – “net hedging income”.
133*
UBI Banca - Notes to the Financial Statements
Section 10
Equity investments - Item 100 -
10.1 Equity investments: information on investments
Name
Registered
address
Op erating
h eadq uarters
Percen tage
o wned
% of votes
A. Companies subject to exclusive con trol
Banca C arime Spa
Cosenza
Cosenza
99.99%
99.99%
Breno (Bs)
Breno (Bs)
89.79%
98.63%
Milan
Milan
83.76%
83.76%
Banca Popolare di Ancona Spa
Jesi (An)
Jesi (An)
99.58%
99.58%
Banca Popolare di Bergamo Spa
Bergamo
Bergamo
100.00%
100.00%
Banca di Valle Camonica Spa
Banca Popolare Commercio e Industria Spa
Banca R egionale Europea Spa
Banco di Brescia San Paolo CAB Spa
BPB Immobiliare Srl
Centrobanca Sviluppo Impresa Sgr Spa
IW Bank Spa
Prestitalia Spa
Società Bresciana Immobiliare Mobiliare - S.B.I.M. Spa
UBI Academy Scrl
UBI Banca International Sa
UBI F actor Spa
Cuneo
Cuneo
74.78%
79.90%
Brescia
Brescia
100.00%
100.00%
Bergamo
Bergamo
100.00%
100.00%
Milan
Milan
100.00%
100.00%
Milan
Milan
100.00%
100.00%
Bergamo
Bergamo
100.00%
100.00%
Brescia
Brescia
100.00%
100.00%
Bergamo
Bergamo
68.50%
100.00%
Luxembourg
Luxembourg
91.20%
100.00%
Milan
Milan
100.00%
100.00%
Brescia
Brescia
100.00%
100.00%
UBI F inance CB 2 Srl
Milan
Milan
60.00%
60.00%
UBI F inance Srl
Milan
Milan
60.00%
60.00%
UBI F inance 2 Srl
Brescia
Brescia
10.00%
10.00%
UBI F inance 3 Srl
Brescia
Brescia
10.00%
10.00%
Milan
Milan
10.00%
10.00%
99.62%
UBI F iduciaria Spa
UBI Lease Finance 5 Srl
UBI Leasing Spa
Brescia
Brescia
99.62%
Bergamo
Milan
65.00%
65.00%
Brescia
Brescia
71.87%
98.56%
UBI SPV BBS 2012 Srl
Milan
Milan
10.00%
10.00%
UBI SPV BPA 2012 Srl
Milan
Milan
10.00%
10.00%
UBI SPV BPCI 2012 Srl
Milan
Milan
10.00%
10.00%
Brescia
Brescia
10.00%
10.00%
UBI Pramerica SGR Spa
UBI Sistemi e Servizi SCpA
24-7 Finance Srl
B. Compan ies subject to jo int control
C. Compan ies subject to sign ifican t influence
Aviva Vita Spa
Milan
Milan
20.00%
20.00%
Aviva Assicurazioni Vita Spa
Milan
Milan
20.00%
20.00%
Lombarda Vita Spa
Brescia
Brescia
40.00%
40.00%
Polis Fondi SGRpA
Milan
Milan
19.60%
19.60%
Bergamo
Mantova
35.00%
35.00%
Shanghai (Cina)
Shanghai (Cina)
35.00%
35.00%
SF Consulting Srl
Zhong Ou Fund Management C o.
As concerns Banca Regionale Europea Spa, the percentage of the voting rights given relates to an Ordinary
Shareholders’ Meeting. If the privileged shares are also included, then the percentage of voting rights is
75.62% in an Extraordinary Shareholders’ Meeting.
The percentage of votes available also includes those available through interests held by subsidiaries of the
Bank.
134*
UBI Banca - Notes to the Financial Statements
10.2 Significant investments: book value, fair value and dividends received
Name
Carrying amount
Dividends
received
Fair value (*)
B. Companies s ubject to considerable influence
1. Lombarda Vita Spa
164,755
2. Aviv a Vita Spa
31,109
3. Aviv a As sicurazioni Vita Spa
23,600
TOTAL
8,598
1,960
219,464
-
10,558
(*) The fair value is not reported because they are companies that are not listed.
Post-tax profit (loss) from
discontinued operations
Post tax profit (loss) from
continuing operations
Profit (Loss) on continuin g
operations befor e tax
Impairment losses and
rever sals on property, plant
and equipment and
intangible assets
Net int erest income
Total revenues
Non-financial liabilities
Finan cial liabilities
Non-financial assets
Financial assets
Name
Cash and cash equivalents
10.3 Significant investments: accounting information
Profit (loss)
for the year
(1)
Other
comprehensive income
net of taxes
(2)
Comprehensive income (3)
= (1) + (2)
B. Compan ies subject to
con siderable influence
1. Lombarda Vita Spa (*)
X
6,465,045
348,547
6,277,475
222,039 1,604,077
X
X 45,158
29,854
-
29,854
(8,429)
21,425
2. Aviva Vita Spa (*)
X
7,056,200
176,800
6,618,700
335,500 1,659,200
X
X 30,800
15,500
-
15,500
-
15,500
3. Aviva Assicurazioni Vita Spa (*)
X
2,652,900
84,500
2,309,000
313,900
X
X 14,700
10,400
-
10,400
-
10,400
435,200
(*) Profit (loss) for the year as in the reporting pack age prepared by the companies for the preparation of the consolidated financial statements of the UBI Group and subject to audit
10.4 Non-significant investments: accounting information
Name
Companies subject to joint
control
Companies subject to
considerable influence
Carrying
amount of the
equity
investments
-
6 ,225
Total
assets
-
285,681
Total
liabilities
-
172,712
Total
revenues
Post tax profit (loss)
from continuing
operations
-
268,4 88
Post-tax profit (los s)
from discontinued
operations
-
-
64,794
-
Profit (loss)
for the year
(1)
-
64,794
Other comprehensive income net of
taxes (2)
-
-
Comp rehensive income
(3) = (1) + (2)
-
64,794
The accounting information relates to the following investments:
- Zhong Ou Fund Management Co.
- Polis Fondi SGRpA
- SF Consulting Srl
135*
UBI Banca - Notes to the Financial Statements
10.5 Annual changes in equity investments
31.12.2015
A. Opening b alances
31.12.2014
9,624,011
10,608,614
B. Inc reases
83,214
588,149
B.1 Purchases
35,454
452,349
-
-
B.2 Reversals of impairment losses
B.3 Reva luations
B.4 Other changes
C. Decreases
-
-
47,760
135,800
( 49,824)
(1,572,752)
C.1 Sales
-
(265,108)
C.2 Impa irment losses
-
(1,255,741)
C.3 Other changes
(49,824)
(51,903)
D. Final balances
9,657,401
9,624,011
E. Tota l r evaluations
F. Total impairment losses
-
-
(3,652,641)
(3,652,641)
Purchases relate mainly to the repurchase of stakes held in the network banks (Banca Carime
Spa: €25.5 thousand; Banca Popolare di Ancona Spa: €1 million; Banca Valle Camonica Spa:
€31.3 million; Banca Popolare Commerce Industry Spa: €2.8 million).
The items B.4 and C.3 ‘Other changes’ relate primarily to the following:
- the merger of IW Bank Spa into UBI Banca Private Investment Spa amounting to €44.6 million;
- the merger of Solimm Srl into SBIM Spa amounting to €2.6 million;
- the effect of provisions and distributions in relation to stock grants for a total net impact of €369
thousand;
- the liquidation of Coralis Rent Srl amounting to €0.4 million: on 20th March 2015, the voluntary
liquidation of Coralis Rent Srl – in liquidation was recorded with the Company Registrar, while its
business was transferred directly to the Parent; on 31st December 2015 the liquidation procedure
came to a close and the company was removed from the Company Registry.
10.6 Commitments relating to equity investments in companies subject to joint control
No commitments relating to equity investments in companies subject to joint control to report.
10.7 Commitments relating to equity investments in companies subject to significant
influence
Information on this item is given in the corresponding item in the Consolidated Annual Report,
which may be consulted.
10.8 Significant restrictions
No positions subject to restrictions to report.
10.9 Other information
No other information to report.
136*
UBI Banca - Notes to the Financial Statements
Section 11
Property, plant and equipment - Item 110 -
11.1 Property, plant and equipment for functional use: composition of assets valued at cost
A ssets/amount s
31.12.2015
1.1 Owned asset s
31.12.2014
119,228
121,610
a) land
73 ,25 8
73,321
b) buildings
38 ,30 9
40,647
2 ,19 7
2,579
c) furnishings
d) electronic equipment
e) other
17 0
345
5 ,29 4
4,718
-
-
1.2 assets acquired in finance leases
a) land
-
-
b) buildings
-
-
c) furnishings
-
-
d) electronic equipment
-
-
e) other
-
-
119,228
121,610
Total
11.2 Tangible assets held for investment: composition of assets valued at cost
31.12.2015
A ssets/amount s
31.12.2014
Fair value
Ca rrying amount
1. Owned a ssets
469,753
L1
L2
-
Carrying
a mount
L3
-
638,763
485,393
Fair value
L1
L2
-
L3
-
661,926
a) land
252,896
-
-
249, 821
253,480
-
-
257,182
b) buildings
216,857
-
-
388, 942
231,913
-
-
404,744
26,680
-
-
27,106
27,175
-
-
27,106
15,075
-
-
13, 553
15,074
-
-
13,553
11,605
496,433
-
-
13, 553
665,869
12,101
512,568
-
-
13,553
689,032
2. Assets ac quired through finance leases
a) land
b) buildings
Total
11.3 Property, plant and equipment for functional use: composition of assets revalued
No revalued property, plant and equipment for functional use exists at UBI Banca.
11.4 Tangible assets held for investment: composition of assets measured at fair value
No tangible assets held for investment at fair value to report.
137*
UBI Banca - Notes to the Financial Statements
11.5 Property, plant and equipment for functional use: annual changes
La nd
B uildings
Ele ctronic
e quipment
Furnishings
Ot her
Total
A. Gr oss opening bala nces
87,016
99,038
68,438
161,381
146,763
562,636
A.1 Total net reductions in value
(13, 695)
(58, 391)
(65,859)
(1 61, 036 )
(14 2,045)
(441,026)
A.2 Net opening balances
73,321
40,647
2,579
345
4,718
121,610
B. Inc reases
33,275
30,116
349
1
4,276
68,017
-
-
1 74
1
2,141
2,316
-
-
-
-
-
-
B.2 Capitali sed improvement expenses
-
-
-
-
-
-
B.3 Reversal of imp airment losses
-
-
-
-
-
-
B.4 Positive changes in fair value recognised in:
-
-
-
-
-
-
a) equity
-
-
-
-
-
-
b) income statement
-
-
-
-
-
-
B.5 Positive exchange rate diff erences
-
-
-
-
-
-
B.6 Tr ansfers from properties hel d for investment
-
-
-
-
-
-
B.1 Purchases
of which business combina tion transactions
B.7 Other changes
C. Decreases
33, 275
30, 116
1 75
-
2,135
65,701
( 33,338)
(32,454)
(730)
(176)
(3,701)
(70,399)
C.1 Sales
-
-
-
-
-
-
C.2 Depreciation
-
(2, 331)
(555)
( 175 )
(1,564)
( 4,625)
C.3 Impa irment losses recognised in:
a) equity
b) income statement
C.4 Negative changes in fair val ue recognised in:
(63)
( 70)
(7)
-
-
-
-
-
-
-
-
-
(63)
(7)
-
-
-
(70)
-
-
-
-
-
-
a) equity
-
-
-
-
-
-
b) income statement
-
-
-
-
-
-
C.5 Negative exchange rate differences
-
-
-
-
-
-
C.6 Tr ansfers to:
-
-
-
-
-
-
a) tangib le assets held for i nvestment
-
-
-
-
-
-
-
-
-
-
C.7 Other changes
(33, 275)
(30, 116)
(175)
(1 )
(2,137)
(65,704)
D. Final net balances
73,258
38,309
2,198
170
5,293
119,228
D.1 Total net red uctions in value
(13, 694)
(60, 722)
(66,225)
(1 60, 251 )
(14 2,855)
(443,747)
D.2 Final gross balance s
86,952
99,031
68,423
160,421
148,148
562,975
-
-
-
-
-
-
b) assets held for sale
E. Va lue at cost
138*
-
UBI Banca - Notes to the Financial Statements
11.6 Tangible assets held for investment: annual changes
31.12.205
Land
A. Opening b alances
Buildings
285,010
569,167
A.1 Total net reductions in value
(16,455)
(325,154)
A.2 Net opening balances
268,555
244,013
11
717
B. Inc reases
B.1 Purchases
8
12
B.2 Capitali sed improvement expenses
-
704
B.3 Positive changes in fair value
-
-
B.4 Reversals of impairment losses
-
-
B.5 Positive exchange rate diff erences
-
-
B.6 Tr ansfers from properties used in oper ations
-
-
B.7 Other changes
3
1
(595)
(16,268)
(3)
-
C.2 Depreciation
-
(15,466)
C.3 Negative changes in fair val ue
-
-
(565)
(728)
C.5 Negative exchange rate differences
-
-
C.6 Tr ansfers to other a sset por tf olios:
-
-
C. Decreases
C.1 Sales
C.4 Impa irment losses
a) properties f or functional use
-
-
b) non-current assets held for disposal
-
-
C.7 Other changes
(27)
(74)
D. Final balances
267,971
228,462
D.1 Total net reductions in value
(16,455)
(339,871)
D.2 Final gross balance s
284,426
568,333
E. Fair value
263,374
402,495
External appraisers were appointed for impairment testing purposes to appraise the entire real
estate portfolio; it found the value consistent with the carrying amounts. In this context the fair
value of properties was determined on the basis of generally accepted valuation principles, by
applying the following valuation criteria:
- the direct comparative or market method, based on a comparison between the asset in
question and other similar assets subject to sale or currently on sale on the same market or
competing markets;
- the income method, based on the present value of potential market incomes for a property,
obtained by capitalising the income at a market rate.
The results of the appraisal method described resulted in a write-down of property positions
amounting to approximately €1.3 million.
139*
UBI Banca - Notes to the Financial Statements
Depreciation was calculated on the basis of the estimated useful life of the assets from the date on
which use of the assets began.
The estimated useful life for the main asset classes is given in months in the table below.
Description
Depreciation
Useful life
Land relating to properties
Properties - Leased properties
Lifting and weighing equipment
Light constructions and scaffolding
Furnishings sundry fix tures
Ordinary office furnishings and equipment
A TM installations
NO
YES
YES
YES
YES
YES
YES
Not depreciated
On basis of appraisal
160 months
120 months
120 months
100 months
96 months
Safes and strong roo ms
Machinery and sundry equipment
Fire fighting equipment
Su ndry machinery, furnishings and fixtures
Bullet proof co unters or with bullet proof glass
Personal computers
Canteen equipment
Special internal communication equipment
A larm systems
Electrical and electronic office machinery
Motor vehicles
A utomobiles
Leased automobiles
YES
YES
YES
YES
YES
YES
YES
YES
YES
YES
YES
YES
YES
80 months
80 months
40 months
80 months
60 months
60 months
48 months
48 months
40 months
30 months
30 months
24 months
Based on duration of contract
11.7 Commitments to purchase property, plant and equipment (IAS 16/74.c)
No commitments for the purchase of property, plant and equipment to report.
140*
UBI Banca - Notes to the Financial Statements
Section 12
Intangible assets - Item 120 -
12.1 Intangible assets: composition by type of asset
Assets/amounts
31.12.2015
Finite useful life
A.1 Goodwill
31.12.2014
Indefinite useful life
X
-
Finite use ful life
Indefinite useful life
X
-
A.2 Other intangible assets
373
37
373
37
A.2. 1 Assets mea sured at cost:
373
37
373
37
-
-
-
-
373
37
373
37
-
a) Internally generated intangible assets
b) Other assets
A.2. 2 Assets at f air value
-
-
-
a) Internally generated intangible assets
-
-
-
-
b) Other assets
-
-
-
-
373
37
373
37
Tot al
141*
UBI Banca - Notes to the Financial Statements
12.2 Intangible assets: annual changes
Other intangible assets: internally
generate d
Goodwill
Finit e useful life
Other intangible assets: other
31.12.2015
Indefinite useful
Indefinite useful
Finite useful life
life
life
569,694
-
-
90,756
37
660,487
(569, 694)
-
-
(90,383)
-
(660,077)
A.2 Net opening balances
-
-
-
373
37
410
B. Inc reases
-
-
-
-
-
-
B.1 Purchases
-
-
-
-
-
-
-
A. Opening b alances
A.1 Total net reductions in value
-
-
-
-
-
B.2 Increases in intangible internal assets
of which business combina tion transactions
x
-
-
-
-
-
B.3 Reversal of impairment losses
x
-
-
-
-
-
B.4 Positive changes in fair value
-
-
-
-
-
-
- in equity
x
-
-
-
-
-
- in the income statement
x
-
-
-
-
-
B.5 Positive exchange rate diff erences
-
-
-
-
-
-
B.6 Other changes
-
-
-
-
-
-
C. Decreases
-
-
-
-
-
-
C.1 Sales
-
-
-
-
-
-
C.2 Impa irment losses
- Amor tisation
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
x
-
-
-
-
-
x
-
-
-
-
-
-
-
-
-
-
x
- Impairment losses
+ equi ty
x
+ income statement
C.3 Negative changes in fair val ue
- in equity
- in the income statement
C.4 Tr ansfers to non-cur rent assets held for
sale.
C.5 Negative exchange rate differences
-
-
-
-
-
-
C.6 Other changes
-
-
-
-
-
-
D. Final net balances
-
-
-
373
37
410
D.1 Total net impairment losses
E. Final gross balanc es
F. Value at cost
(569, 694)
-
-
(90,383)
-
(660,077)
569,694
-
-
90,756
37
660,487
-
-
-
-
-
-
142*
UBI Banca - Notes to the Financial Statements
12.3 Other information
The useful life used for calculating the amortisation of the other finite useful life intangible assets
is reported below for each type of asset.
31.12.2015
intangible assets
- software
Useful life
Carrying amount
36 months
373
The software recognised within intangible assets has not yet entered into service and therefore
has not yet been amortised.
There were no contractual commitments to purchase intangible assets.
143*
UBI Banca - Notes to the Financial Statements
Section 13
item 80
Tax assets and tax liabilities – Asset item 130 and Liability
13.1 Deferred tax assets: composition
31.12.2015
31.12.2014
Goodwill f rom merger realigned
977, 397
1,023,210
Impair ment losses on loans to customers
149, 777
211,739
Impair ment losses on AFS securities
4, 402
86,4 17
11, 312
10,8 08
Write-down of non-banking loans and unsecured guarantees not d educted
7, 216
9,047
Provisions for staff costs
6, 381
3,835
Provisions for risks and charges not deducted
6, 519
9,082
Goodwill on depository b ank operations from group member companies
1, 182
1,445
-
1,232
Mathematical reserve f or Separ ately Managed Pension Fund former 21.03. 89 account
220
294
Non-recur ring expenses not deducted
232
252
Other minor items
181
207
1,164,819
1,357,568
Property, plant and equipment - greater IAS depreciation
Share capital increases deductible over f ive years
Tot al
13.2 Deferred tax liabilities: composition
31.12.2015
Reval uation of AFS securities
Purchase price alloca tion
31.12.2014
124 ,506
135 ,443
41,128
41 ,128
Property, p lant and equipment - non-accounting excess depreciation deducted
4,509
4 ,646
Leased properties recognised at fair value
1,358
1 ,370
Fa ir value changes of securi ties designated a t f air value
1,038
645
255
255
172,794
183,487
Post-emp loyment benefit f und valuation
Tot al
144*
UBI Banca - Notes to the Financial Statements
13.3 Changes in deferred tax assets (balancing entry in the income statement)
31.12.2015
1. Ope ning balance
31.12.2014
1,267,287
1,276,957
2. Increases
16,601
31,577
2. 1 Def err ed tax assets arising dur ing the year
16,601
31,577
a) relating to previous yea rs
-
-
b) due to changes in accounting policies
-
-
c) reversals of impairment losses
-
-
16,601
31,577
2.2 New taxes or incr eases in tax rates
-
-
2.3 Other incr eases
-
-
-
-
( 125,840)
(41,247)
(6,290)
(41, 247)
(6,290)
(41, 247)
b) impairment losses on non-recoverable items
-
-
c) due to changes in accounting policies
-
-
d) other
-
-
d) other
of which business combination transa ctions
3. Decrea ses
3.1 Deferred tax assets derecognised dur ing the year
a) reversals of temporar y differences
3.2 Reductions in tax r ates
3.3 Other decreases
a) transformation in tax credits pursuant to Law 214/2011
b) other
of which business combination transa ctions
4. Final b alance
-
-
(119,550)
-
(119,550)
-
-
-
-
-
1,158,048
1,267,287
Deferred tax assets are recognised on the basis of the probability of there being sufficient future
taxable income and also taking into account the consolidated tax regime adopted in accordance
with articles 117 et seq of Presidential Decree No. 917/86. They also depend on the ability, under
determined conditions, to convert deferred tax assets into tax credits, that were recognised in the
balance sheet relating to write-downs and losses on loans to customers and also to realign the
value of goodwill and other intangible assets.
The opening balance is the amount for deferred tax assets arising up until 2014 with the
balancing entry in the income statement.
The deferred tax assets were recognised for IRES purposes at a rate of 27.5% and for IRAP (local
production tax) purposes at a rate of 5.57%.
Deferred tax assets recognised during the year amounting to €16,601 thousand were composed as
follows: €11,775 thousand from 25% of the write-downs and losses on loans deductible over
future years for IRES (corporate income tax) and IRAP (regional production tax) purposes, in
accordance with Art. 16, paragraph 3, of Decree Law No. 83 of 27th June 2015.
This provision did in fact introduce the full deductibility of write-downs and losses on loans to
customers recognised in the accounts from 2016 and a reduced 75% reduction on the same items
in the 2015 transition period.
The remaining portion amounting to €4,826 thousand is composed as follows: €3,707 thousand of
additions to provisions for risks and charges and guarantees and commitments that are not
deductible; €1,042 thousand of non-deductible depreciation and amortisation; and €77 thousand
of expenses incurred during the year deductible in the following year.
Deferred tax assets of €6,290 thousand derecognised during the year were composed as follows:
€4,047 thousand from the use/release of taxed provisions; €1,508 thousand from recoveries in
145*
UBI Banca - Notes to the Financial Statements
value on unsecured guarantees; €122 thousand from costs that became deductible during the
year; €539 thousand from depreciation on property plant and equipment and other costs which
became deductible during the year; and €74 thousand from recoveries resulting from payments
from the pension fund.
Other decreases amounting to €119,550 thousand relate to the transformation of deferred tax
assets for IRES and IRAP into tax credits as a result of the loss recognised for the year 2014 by
UBI Banca in accordance with Law No. 214/2011.
13.3.1 Changes in deferred tax assets pursuant to Law No. 214/2011 (balancing entry in
the income statement)
31.12.2015
1. Ope ning balance
31.12.2014
1,234,949
1,238,386
2. Increases
11,775
29,090
3. Decrea ses
(119,550)
( 32,527)
-
(27,507)
3.1 Reversals of temporary dif ferences
3.2 Transf ormation in tax credits
a) resulting f rom loss for the year
(1 19, 550)
-
(1 19, 550)
-
-
-
b) resulting from tax losses
3.3 Other decreases
4. Final b alance
-
(5,020)
1,127,174
1,234,949
13.4 Changes in deferred tax liabilities (balancing entry in the income statement)
31.12.2015
1. Ope ning balance
31.12.2014
48,043
51,685
2. Increases
393
432
2. 1 Def err ed tax liabilities ar ising during the year
393
432
-
-
a) rela ting to previous years
b) due to changes in accounting pr inciples
-
-
393
432
2. 2 New taxes or increases in tax rates
-
-
2. 3 Other increases
-
-
c) other
of which business combina tion transactions
3. Decrea ses
3. 1 Def err ed tax liabilities derecognised during the year
-
-
( 148)
( 4,074)
(148)
(4, 074)
(148)
(4, 074)
b) due to changes in accounting pr inciples
-
-
c) other
a) reversals of temporary differences
-
-
3. 2 Reductions i n tax rates
-
-
3. 3 Other decreases
-
-
48,288
48,043
4. Final b alance
Deferred tax liabilities are recognised on the basis of temporary differences between the book
value of an asset or liability and its value for tax purposes.
146*
UBI Banca - Notes to the Financial Statements
As concerns revaluations of equity investments which satisfied the requirements for equity
exemption, deferred taxes were recognised on the 5% taxable portion.
No deferred tax liabilities were recorded on untaxed reserves, because no events occurred to
remove the tax exemption regime.
The opening balance is the amount for deferred taxes arising up until 2014 with the balancing
entry in the income statement.
Deferred tax liabilities of €393 thousand recognised during the year were attributable to equity
instruments classified as designated at fair value.
Deferred tax liabilities derecognised during the year amounted to €148 thousand representing the
difference between statutory accounting and tax accounting depreciation of property, plant and
equipment.
13.5 Changes in deferred tax assets (balancing entry in equity)
31.12.2015
1. Ope ning balance
31.12.2014
90,281
128,133
2. Increases
420
28,507
2. 1 Def err ed tax assets arising dur ing the year
420
28,507
-
-
a) rela ting to previous years
b) due to changes in accounting pr inciples
c) other
-
-
420
28,507
2. 2 New taxes or increases in tax rates
-
-
2. 3 Other increases
-
-
-
-
3. Decrea ses
(83,930)
(66,359)
3. 1 Def err ed tax assets derecognised during the year
(83,930)
(66, 359)
(83,930)
(66, 359)
-
-
of which business combina tion transactions
a) reversals of temporary differences
b) impairment losses on non-recovera ble items
c) due to changes in accounting principles
-
-
d) other
-
-
-
-
3. 2 Reductions i n tax rates
3. 3 Other decreases
4. Final b alance
-
-
6,771
90,281
The opening balance is the amount for deferred tax assets arising up until 2014 with the
balancing entry in equity.
Deferred tax assets recognised during the year, amounting to €420 thousand, were attributable to
fair value movements in securities and equity investments classified within available-for-sale
financial assets.
Taxes derecognised, amounting to €83,930 thousand, consisted of €82,436 thousand for the
change in the fair value of available-for-sale securities, €1,232 thousand for expenses incurred for
the share capital increase deductible in 2014 and €262 thousand for the amortisation charge on
goodwill.
147*
UBI Banca - Notes to the Financial Statements
13.6 Changes in deferred tax liabilities (with balancing entry in equity)
3 1.12 .2 0 15
1. O p e n in g b a la n c e
2 . In c re a s e s
2.1 De fe rre d ta x lia bilitie s a ris ing during the ye a r
3 1.12 .2 0 14
13 5 ,4 4 3
3 8 ,8 14
4 2 ,6 0 4
118 ,9 0 6
42,604
118,906
a ) re la ting to pre vio us ye a rs
-
-
b) due to c ha nge s in a c c o unting po lic ie s
-
-
42,604
118,906
2.2 Ne w ta xe s o r inc re a s e s in ta x ra te s
-
-
2.3 Othe r inc re a s e s
-
-
c ) o the r
o f whic h bus ine s s c o m bina tio n tra ns a c tio ns
-
3 . D e c re a s e s
-
( 5 3 ,5 4 1)
3.1 De fe rre d ta x lia bilitie s de re c o gnis e d during the ye a r
( 2 2 ,2 7 7 )
(53,541)
(22,277)
(53,541)
(22,277)
b) due to c ha nge s in a c c o unting po lic ie s
-
-
c ) o the r
-
-
3.2 R e duc tio n in ta x ra te s
-
-
3.3 Othe r de c re a s e s
-
-
a ) re ve rs a ls o f te m po ra ry diffe re nc e s
4 . F in a l b a la n c e
12 4 ,5 0 6
13 5 ,4 4 3
The opening balance is the amount for deferred tax arising up until 2014 with the balancing entry
in equity.
Deferred tax liabilities recognised during the year, amounting to €42,604 thousand, similarly to
those derecognised amounting to €53,541 thousand, consisted of fair value movements in
securities and investments classified within AFS at the end of the year.
13.7 Other information
Current tax assets
The table below reports amounts for current tax assets.
31.12.2015
31.12.2014
164,421
208, 096
1,006
3, 013
Tax credits from transformation of DTAs in tax cr edits pursuant to Law 214/2011
98,750
-
Tax credits for IRAP purposes
63,340
80, 486
Other tax credits
37,217
39, 567
364,734
331,162
Taxes paid on account
Withheld at source
Tot al
148*
UBI Banca - Notes to the Financial Statements
Current tax liabilities
The table below reports amounts for current tax liabilities.
Opening balances
Tax provision
Uses for payment of tax
31.12.2015
31.12.2014
169, 396
232,645
90, 640
173,174
(166,904)
Other changes
-
Final balance s
93,132
(236,423)
169,396
Probability test on deferred taxes
As reported in Part A – Accounting Policies in these notes to the financial statements – the
recognition of deferred tax liabilities and assets is performed in compliance with the criteria set
out in IAS 12, as follows:
– with account taken of all taxable temporary differences, for deferred tax liabilities, except in
some specific cases;
– with account taken of all taxable temporary differences, for deferred tax assets, if it is
probable that future taxable income will be earned, against which the temporary difference may
be used. The effects, amongst other things, of article 117 et seq of the Consolidated Income Tax
Act (Tax Consolidation) are taken into consideration in the calculation of taxable income.
Deferrred tax assets (DTAs) are measured on the basis of the tax rates that it is expected will
apply in the year in which the tax asset will be realised.
As already described in the section “Tax Aspects” of the Management Report, Law No. 208 of 28th
December 2015 ( 2016 Legge di stabilità – “stability law” – annual finance law) established a
reduction in the tax rate for IRES from 27.5% to 24% in effect from 2017.
Nevertheless, for banks and financial companies only the reduction in the IRES rate was
neutralised by the introduction of a surtax of 3.5%, again applicable from 2017 (“IRES surtax”).
As a result of the introduction of the surtax on IRES, the rate for IRES on the income of banks
and financial companies remains substantially unchanged at 27.5% also for future years.
More specifically, on the basis of IAS 12, section 46, the reduction in the rate for IRES would
result in an obligation to adjust the value of the credit for deferred tax assets in line with the
reduction in the rate.
The 3.5% surtax on IRES for the banking and financial sector restored the overall level of taxation
to 27.5% and consequently it was not necessary to reduce the value of the deferred tax assets
previously recognised in the accounts.
Furthermore, for the purposes of calculating deferred tax assets and the respective recoverability,
the surtax on IRES is considered fully equivalent to the ordinary rate on IRES, because in both
cases the calculation of the taxable income follows the rules laid down by the Consolidated
Income Tax Act. Consequently, the portion of the tax losses attributable to temporary differences
which generate qualified deferred tax assets, and that is those relating to impairment losses on
149*
UBI Banca - Notes to the Financial Statements
loans to customers and on goodwill, are considered fully convertible into tax credits in accordance
with the rules currently in force for ordinary IRES.
As at 31st December 2015, deferred tax assets recognised by UBI Banca Spa within the item “130
Tax assets b) deferred” totalled €1,164.8 million and were generated by the following:
 excess of impairment losses recognised on loans pursuant to Art. 106, paragraph 3, of the
Consolidated Income Tax Act: €149.8 million (of which €10 million recognised for IRAP purposes
in accordance with the new tax regime introduced by Art. 1, paragraph 158, of the 2014, Legge
Stabilità, which made this deductible for the purposes of this regional tax effective from 2013);
 goodwill and other intangible assets, subject, amongst other things, to tax relief in
accordance with the law, for which the amortisation is deductible in subsequent years: €977.4
million, with regard to the amounts reported in both the separate and the consolidated financial
statements (article 15 paragraph 10 bis of Decree Law No. 185/2008 introduced by Decree Law
No. 98/2011 converted by Law No. 111/2011);
 impairment losses on the AFS securities portfolio and provisions and expenses not
deductible for accrual reasons in accordance with Consolidated Income Tax Act: €37.6 million.
For the purposes of carrying out the probability test on deferred tax assets recognised in the
balance sheet as at 31st December 2015, those resulting from deductible temporary differences
relating to write-downs and losses on loans, goodwill and other indefinite useful life intangible
assets (known as “qualified deferred tax assets”) were considered separately.
Since the tax year ended 31st December 2011, it has in fact been possible to convert into tax
credits deferred tax assets (IRES –corporate income tax) recognised in the balance sheet against
tax losses resulting from the deferred deduction of temporary differences relating to impairment
losses on loans to customers and on goodwill (Art. 2, paragraph 56-bis, Decree Law No. 225 of
29th December 2010, introduced by Art. 9, Decree Law No. 201 of 6th December 2011). A similar
conversion has been allowed with effect from the tax year 2013, if an IRAP (regional production
tax) return declares a net negative value for production, relating to the deferred tax assets for
IRAP which relate to the aforementioned temporary differences that led to the determination of a
net negative value for production (Art. 2, paragraph 56-bis 1, Decree Law No. 225 of 29th
December 2010, introduced by Law No. 147/21013). These conversion hypotheses – which are in
addition to that already provided where an individual balance sheet records a loss for the year
(Art. 2, paragraphs 55 and 56, Decree Law No. 225/2010, as last amended by Law No. 147/2013)
– have introduced an additional and supplementary procedure for recovery designed to ensure the
recovery of the deferred tax assets in question in all situations, independently of the future profits
of a company.
The convertibility of deferred tax assets on IRES tax losses and on a net negative value of
production for IRAP purposes which are determined by qualified temporary differences therefore
amount to a sufficient condition for the recognition of the aforementioned deferred tax assets in
the balance sheet which makes the relative probability test obsolete. This approach is also
confirmed in a joint document No. 5 issued by the Bank of Italy, the Consob (securities market
authority) and Isvap (insurance authority) on 15th May 2012 (issued in respect of a co-ordination
committee on the application of the IFRS) relating to the tax accounting treatment for tax assets
resulting from law No. 214/2011 and in the subsequent IAS Italian Banking Association
document No. 112 of 31st May 2012 (“Tax credit resulting from the transformation of deferred tax
assets: Bank of Italy, Consob and ISVAP clarifications on the application of IFRS”).
On the basis of those assumptions, UBI Banca has carried out the following tests:
– identification of deferred tax assets, other than those relating to write-downs and losses on
loans, goodwill and other indefinite useful life intangible assets (“non-qualified deferred tax
assets”) recognised in the balance sheet;
– analysis of those non-qualified deferred tax assets and deferred tax liabilities recognised in
the balance sheet distinguishing them by type for probable timing for use;
– forecasts of future income designed to verify its capacity to realise deferred tax assets.
The calculations carried out resulted in a tax base able to reabsorb taxes recognised as at 31st
December 2015.
150*
UBI Banca - Notes to the Financial Statements
Section 14
Non-current assets and liabilities and groups of assets and
the associated liabilities held for disposal – Asset item 140
and Liability item 90
14.1 Non-current assets and disposal groups held for sale: composition by type of asset
31.12.2015
31.12.2014
A. Single assets
A.1 Financial assets
-
-
2,032
-
-
-
-
Total A
2,032
-
of which me asure d at cost
of which me asured at fair value level 1
of which me asured at fair value level 2
2,032
-
-
of which me asured at fair value level 3
B. Groups of assets (discontinued operating units)
-
-
A.2 Equity investments
A.3 Property, plant and equipment
A.4 Intangible assets
A.5 Other non-current assets
B.1 Financial assets held for trading
-
-
B.2 Financial assets designate d at fair value
B.3 Available-for-sale financial assets
B.4 Held-to-maturity investments
-
-
B.5 Loans and advances to banks
B.6 Loans and advances to customers
-
507
B.7 Equity investments
-
-
B.8 Property, plant and equipme nt
-
-
B.9 Intangible assets
-
-
B.10 Other assets
Total B
of which me asure d at cost
-
507
507
of which me asured at fair value level 1
-
-
of which me asured at fair value level 2
of which me asured at fair value level 3
C. Liabilities associated with single assets held for sale
-
-
C.1 Borrowings
-
-
C.2 Securities
C.3 Other liabilities
-
-
Total C
-
-
of which me asure d at cost
of which me asured at fair value level 1
-
-
of which me asured at fair value level 2
of which me asured at fair value level 3
-
-
D.1 Due to banks
D.2 Due to customers
-
-
D.3 Debt securities issued
D.4 Financial liabilities held for trading
D.5 Financial liabilities de signated at fair value
-
-
D.6 Provisions
-
-
D.7 Other liabilities
Total D
-
-
D. Liabilities associated with assets held for sale
of which me asure d at cost
-
-
of which me asured at fair value level 1
of which me asured at fair value level 2
-
-
of which me asured at fair value level 3
-
-
In June 2015 UBI Banca reclassified one third of the stake held in Zhong Ou Asset Management
Co. Ltd (accounting for approximately 11.7% of the total share capital) into non-current assets held
for sale in accordance with IFRS 5.
Further details are given in section “The consolidation scope” of the consolidated management
report.
151*
UBI Banca - Notes to the Financial Statements
14.2 Other information
There is no other significant information to report.
14.3 Information on equity investments in companies subject to significant influence not
accounted for using the equity method
There are no equity investments in companies subject to significant influence classified within
non-current assets and groups of assets held for disposal.
Section 15
Other assets - Item 150 -
15.1 Other assets: composition
Descr iption/ Amounts
31.12.2015
31.12.2014
Other assets for tax consolida tion
107,531
Items in transit
140,875
90,302
Debtor items in transit not yet posted to destinati on accounts
240,954
110,165
39,106
34,802
Bills, securities, coupons and fees to be debited to customer s and correspondents
184,614
Currency dif fer ences on currency tr ansactions
3,360
3,555
Cheques drawn on the ba nk
4,592
2,287
Tax credits on withholding tax
8,233
7,225
Stocks
3,567
3,571
Improvements to leased assets
Items relating to covered bond operations and securitisations
Sundry debtor items
Tot al
152*
277
404
127,582
181,089
23,904
24,325
699,981
642,339
UBI Banca - Notes to the Financial Statements
LIABILITIES
Section 1 Due to banks - Item 10 1.1 Amounts due to banks: composition by type
Type of transaction/Amounts
31.12.2015
1. Due to central banks
2. Due to banks
31.12.2014
8,106,441
7,738,913
10,305,964
8,834,453
2.1 1. Current accounts and deposits
2,253,790
2,408,747
2.2 Term deposits
2.3 Financing
2.3.1 Repurchase agreements
4,460,255
960,674
389,462
5,010,334
1,349,898
613,158
571,212
-
736,740
-
Total
64,194
15,845,354
65,474
19,140,417
Fair value - level 1
-
-
Fair value - level 2
Fair value - level 3
15,805,892
19,207,310
Total fair value
15,805,892
19,207,310
2.3.2 Other
2.4 Amounts due for commitments to repurchase own equity instruments
2.5 Other payables
The item “Due to central banks” contains the carrying amount of the remaining financing received
from the ECB amounting to €8.1 billion.
The item “Due to banks – Current accounts and deposits” includes intragroup amounts of €1.7
billion and financing from other banks of €498.7 million.
Term deposits include financing from Group banks of €4.4 billion and financing from other banks
of €37 million.
Repurchase agreements include €344 million with Group counterparties and €45 million relating
to positions with other banks.
The item “Financing – other” relates to outstanding transactions with the EIB amounting to
€570.2 million. The remaining amount relates to intragroup transactions.
1.2 Details of item 10 “Due to banks”: subordinated liabilities
No subordinated loans to banks to report.
1.3 Details of item 10 “Due to banks”: structured debts
The Bank has issued no structured debt to other banks.
1.4 Due to banks: liabilities subject to specific hedging
No liabilities due to banks subject to specific hedging to report.
153*
UBI Banca - Notes to the Financial Statements
1.5 Amounts due for finance leases
No amounts due to banks for finance leases have been recognised.
Section 2 Due to customers - Item 20 2.1 Amounts due to customers: composition by type
Ty p e o f t ra n s a c t io n / A m o u n t s
3 1. 12 . 2 0 15
1. Cu rre n t a c c o u n ts a n d d e p o s its
3 1. 12 . 2 0 14
8 5 0 ,2 0 6
2 . Te rm d e p o s its
3 . Fin a n c in g
3 .1 Re p u rc h a s e a g re e me n ts
-
6 ,4 9 6 ,6 2 7
6 ,0 0 6 ,4 5 1
6 ,10 7 ,6 6 7
5 ,5 3 1,5 8 6
3 8 8 ,9 6 0
4 7 4 ,8 6 5
3 .2 O th e r
4 . Amo u n ts d u e fo r c o mmitme n ts to re p u rc h a s e o wn e q u ity in s tru me n ts
5 . O th e r p a ya b le s
To t a l
1,0 3 2 ,6 8 7
-
-
-
10 ,7 5 3
2 6 ,13 2
7 ,3 5 7 ,5 8 6
7 ,0 6 5 ,2 7 0
F a ir v a lu e - le v e l 1
-
-
F a ir v a lu e - le v e l 2
-
-
F a ir v a lu e - le v e l 3
7 ,3 5 7 ,6 8 8
7 ,0 7 5 ,8 2 5
F a ir v a lu e
7 ,3 5 7 ,6 8 8
7 ,0 7 5 ,8 2 5
The item “Current accounts and deposits” includes cash of €348.3 million from managed
portfolios and funds deposited by UBI Pramerica SGR and €231.4 million of intragroup
transactions.
Repurchase agreements relate to financing transactions with Cassa di Compensazione e Garanzia
(a central counterparty clearing house).
The main “other” financing liabilities consisted of €361.7 million of transactions with the Cassa
Deposito e Prestiti (state controlled fund and deposit institution) and of €23.4 million of intragroup
transactions.
2.2 Details of item 20 “Due to customers”: subordinated liabilities
No subordinated loans to banks to report.
2.3 Details of item 20 “Due to customers”: structured debts
The Bank has issued no structured debt to customers
2.4 Due to customers: liabilities subject to specific hedge
No outstanding amounts due to customers subject to specific hedges to report.
154*
UBI Banca - Notes to the Financial Statements
2.5 Amounts due for finance leases
31.12.2015
31.12.2014
Residual debt to lea sing companies
- within 1 year
1,085
- b etween 1 and 5 years
5,049
4,75 7
17,280
1 8,65 7
- more than 5 years
155*
1,02 3
UBI Banca - Notes to the Financial Statements
Section 3 Debt securities issued - Item 30 3.1 Debt securities issued: composition by type
31.12.2015
Type of
sec urity/ Amounts
31.12.2014
Fair Va lue
Carr ying
Amount
Lev el 1
Le vel 2
Fair value
Carr ying
Amount
Le vel 3
Level 1
Level 2
Level 3
A. Securities
1. bonds
1. 1 structured
1. 2 other
2. other securities
2. 1 structured
2. 2 other
Total
36, 250,054
15,426,790
21,388, 901
-
36,514,980
16,277, 423
21, 078,127
3, 496,668
950,107
2,515, 407
-
3,539,451
978, 676
2, 544,021
-
32, 753,386
14,476,683
18,873, 494
-
32,975,529
15,298, 747
18, 534,106
-
15,186
-
15, 186
-
30,688
-
30,688
-
-
-
-
-
-
-
-
-
15,186
-
15, 186
-
30,688
-
30,688
-
36,265,240
15,426,790
21,404,087
-
36,545,668
16,277,423
21,108,815
-
At the end of the year bonds issued in relation to covered bond operations amounted to €9.3
billion nominal (the carrying amount inclusive of the amortised cost and the delta fair value of the
hedge was €9.9 billion).
The remaining book value of bond issues on the EMTN market totalled €2.5 billion.
3.2 Details of item 30 “Debt securities issued”: subordinated securities
Desc ription/Amount s
31.12.2015
31.12.2014
Debt securities issued
Debt securities issued - subordinated
2,851,838
3,583,881
A list of the individual bond issues is given in section 2 - Part F of this report which provides
information on capital.
3.3 Debt securities issued subject to specific hedge
31.12.2015
1. Securi ties subject to specif ic fair value hedge:
a) interest rate risk
31.12.2014
19,476, 916
20,355,012
19,476, 916
20,355,012
b) currency risk
-
-
c) multiple risks
-
-
-
-
a) interest rate risk
-
-
b) currency risk
-
-
c) other
-
-
2. Securi ties subject to specif ic cash flow hedge:
Changes in fair value of the underlying bonds and of the relative hedging contracts generated a
net result recognised within item 90 in the income statement – “Net hedging income”.
156*
UBI Banca - Notes to the Financial Statements
Section 4 Financial liabilities held for trading - Item 40 4.1 Financial liabilities held for trading: composition by type
31.12.2015
Type of t ransact ion/Amounts
31.12.2014
FV
NA
L1
FV*
L2
FV
NA
L3
L1
FV*
L2
L3
A. On-bala nce sheet liabilities
1. Due to banks
-
-
-
-
-
-
-
-
-
2. Due to customers
-
-
-
-
-
-
-
-
-
-
3. Debt instr uments
-
-
-
-
-
-
-
-
-
-
3.1 Bonds
3. 1.1 Structured
3. 1.2 Other bonds
3.2 Other securities
3. 2.1 Structured
3. 2.2 Other
Total A
-
-
-
-
-
-
-
-
x
x
-
-
-
-
-
-
-
-
-
-
-
-
x
x
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
x
-
-
-
-
-
x
-
-
-
-
-
-
-
-
x
-
-
-
-
x
-
-
-
-
-
-
B. Der iva tiv e instruments
1. Financial derivati ves
x
7
608,582
11
x
x
300
721, 881
-
x
1.1 For trading
x
7
608,582
11
x
x
300
721, 881
-
x
1.2 Connected with fair
value options
x
-
-
-
x
x
-
-
-
x
1.3 Other
x
-
-
-
x
x
-
-
-
x
2. Credit derivatives
x
-
-
-
x
x
-
-
-
x
2.1 For trading
x
-
-
-
x
x
-
-
-
x
2.2 Connected with fair
value options
x
-
-
-
x
x
-
-
-
x
2.3 other
x
-
-
-
x
x
-
-
-
x
x
7
608,582
11
x
x
300
721,881
-
x
7
608,582
11
300
721,881
-
Total B
Tota l ( A+B)
-
-
-
Legend
FV = fair value
FV* = Fair value calculated excluding changes in value resulting from a change in the credit rating of the issuer since the
date of issue
NA = nominal or notional amount
Financial derivatives (level two) relate to OTC transactions connected with trading activity and
were composed mainly of interest rate swaps of €546.1 million, options of €23.4 million, forwards
of €34.4 million and swaps on commodities of €4.7 million.
The changes should be interpreted in relation to the corresponding item recognised within
financial assets held for trading.
4.2 Details of item 40 “Financial liabilities held for trading”: subordinated liabilities
The Bank has issued no subordinated financial liabilities held for trading.
4.3 Details of item 40 “Financial liabilities held for trading”: structured debt
The Bank has issued no structured financial liabilities held for trading.
157*
UBI Banca - Notes to the Financial Statements
-
Section 5 Financial liabilities designated at fair value - Item 50 The Bank holds no financial liabilities designated at fair value to report.
Section 6 Hedging derivatives - Item 60 6.1 Hedging derivatives: composition by type of hedge and hierarchical level
NA
31.12.2015
Fair Value 31.12.2015
L1
L2
A. Financial deriv ativ es
NA
31.12.2014
Fair Value 31.12.2014
L3
L1
L2
L3
-
700,871
-
13,591,479
-
937,018
-
11,329,852
1) Fai r value
-
700,871
-
13,591, 479
-
937,018
-
11,329, 852
2) Cash flow
-
-
-
-
-
-
-
-
3) Foreign investments
-
-
-
-
-
-
-
-
B. Credit deriv ativ es
-
-
-
-
-
-
-
-
1) Fai r value
-
-
-
-
-
-
-
-
2) Cash flow
-
-
-
-
-
-
-
-
-
700,871
-
13,591,479
-
937,018
-
11,329,852
Total
Legend
NA = notional amount
L1 = Level 1
L2 = Level 2
L3 = Level 3
Financial derivatives consist exclusively of interest rate hedges of the interest rate swap type.
6.2 Hedging Derivatives: composition by portfolios hedged and type of hedge
Fair value
Transactions /Type of hedge
Specific
I nterest rate risk
1. A vailable-fo r-sale financial
as sets
Macro- hedge
Credi t risk
Price risk
669,768
-
-
6,374
-
-
x
-
x
2. Loans
3. Held-t o-maturit y investments
x
4. Po rtfo lio
x
5. Ot her transact io ns
Total assets
Curren cy risk
x
x
-
x
-
x
-
x
x
x
-
x
x
-
x
-
x
x
5,450
-
-
-
-
-
-
-
-
19,279
-
-
Total liabilities
Macro-hedge
-
-
2. Po rtfo lio
Speci fic
Multiple risks
676,142
1. Financial liabilities
Forei gn
investments
C ash f low
x
-
x
x
-
5,450
-
-
x
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
x
x
x
x
x
x
2. Po rtfo lio of financial assets
and liabilit ies
x
x
x
x
x
-
x
x
19,279
1. E xpected trans actio ns
x
x
-
x
x
-
x
x
x
-
-
With regard to specific hedges, the amount for hedging derivatives on available-for-sale financial
assets relates primarily to positions on debt instruments issued by the Italian government.
158*
UBI Banca - Notes to the Financial Statements
Section 7 Fair value change in financial liabilities subject to macro-hedge Item 70 The Bank has no contracts for macro-hedging of financial liabilities.
Section 8 Tax liabilities - Item 80 See Asset Section 13.
Section 9 Liabilities associated with disposal groups held for sale -Item 90 See Asset Section 14.
Section 10 Other liabilities - Item 100 10.1 Other liabilities: composition
Description / Amounts
31.12.2015
Ba lance of illiquid portfolio items
31.12.2014
72,664
77, 638
Other liabilities per tax consol idation
231,802
287, 111
Cr edit items in transit in departments or branches pending posting to accounts
333,096
106, 761
55,103
32, 462
Tax withheld on income paid to third parti es
8,144
8, 401
Indirect taxes payabl e
3,025
3, 101
Items i n transit
Dividends and sums due to shareholders
Currency differences on currency transactions
Amounts due to supplier s
Paya bles f or educational, cultural, charita ble and social purposes
26
86
868
264
45,266
41, 138
5,627
6, 564
Paya bles f or guar antees and commitments
21,747
23, 627
Due to personnel
27,583
29, 141
Residual creditor items
76,327
134, 776
881,278
751,070
Tot al
159*
UBI Banca - Notes to the Financial Statements
Section 11
Post-employment benefit provision - Item 110 -
11.1 Annual changes in post-employment benefits
31.12.2015
A. Opening b alances
B. Inc reases
B. 1 Allocation for the year
31.12.2014
45,443
40,166
63
6,706
58
168
5
6 ,538
(5,531)
( 1,429)
C. 1 Payments mad e
(3,80 4)
(1, 300)
C. 2 Other changes
(1,72 7)
(129)
39,975
45,443
B. 2 Other changes
C. Decreases
D. Final balances
11.2 Other information
The demographic and actuarial hypotheses adopted to value the post-employment benefit
provision and leaving entitlements
Methodology used as at 31.12.2015
Mortality rate
Post-employment
benefit advances
Inflation rates
Discount rates
2013 SIM (Italian male statistics) and SIF (Italian female statistics) tables (Italian National
Office of Statistics data) were used .
The probability of advance payments, calculated on the basis of historical data for the
Group, is 2% while the average amount requested is between 45% and 100% of the
available provision.
Long term forecasts of the scenario for inflation led to the use of a rate of 1.5%
A discount rate of 1.6968%, was used, calculated as the weighted average of the EUR
Composite AA curve as at 31.12.2015, using, as weights, the ratios between the amount
paid and advanced for each maturity date and the total amount to be paid and advanced
until the extinction of the population considered. This was performed because IAS 19
states that reference should be made to the market yields of “high quality corporate
bonds”, or to yields on securities with a low credit risk. By making reference to the
definition of “investment grade” securities, where a security qualifies for that
classification if its rating is equal to or higher than BBB for S&P or Baa2 for Moodys, it
was decided to consider only securities issued by corporate issuers with a class “A”
rating with the assumption that this class identifies an average level for “investment
grade” securities and thereby excludes higher risk securities. Since IAS 19 makes no
explicit reference to a specific market sector for the bonds, it was decided to opt for a
“composite” market curve which therefore summarises the prevailing market conditions
on the valuation date for securities issued by companies belonging to different sectors,
including utilities, telephone, financial, banking and industrial sectors. The euro area was
used for the geographical area.
160*
UBI Banca - Notes to the Financial Statements
Methodology used as at 31.12.2014
Mortality rate
Post-employment
benefit advances
Inflation rates
Discount rates
2012 SIM (Italian male statistics) and SIF (Italian female statistics) tables (Italian National
Office of Statistics data) were used.
The probability of advance payments, calculated on the basis of historical data for the
Group, is 2% while the average amount requested is between 45% and 100% of the
available provision.
Long term forecasts of the scenario for inflation led to the use of a rate of 1.5%.
A discount rate of 1.0766%, was used, calculated as the weighted average of the EUR
Composite AA curve as at 31.12.2014, using, as weights, the ratios between the amount
paid and advanced for each maturity date and the total amount to be paid and advanced
until the extinction of the population considered. This was performed because IAS 19 states
that reference should be made to the market yields of “high quality corporate bonds”, or to
yields on securities with a low credit risk. By making reference to the definition of
“investment grade” securities, where a security qualifies for that classification if its rating is
equal to or higher than BBB for S&P or Baa2 for Moodys, it was decided to consider only
securities issued by corporate issuers with a class “A” rating with the assumption that this
class identifies an average level for “investment grade” securities and thereby excludes
higher risk securities. Since IAS 19 makes no explicit reference to a specific market sector
for the bonds, it was decided to opt for a “composite” market curve which therefore
summarises the prevailing market conditions on the valuation date for securities issued by
companies belonging to different sectors, including utilities, telephone, financial, banking
and industrial sectors. The area was used for the geographical area.
161*
UBI Banca - Notes to the Financial Statements
Section 12
Provisions for risks and charges - Item 120 -
12.1 Provisions for risks and charges: composition
Items/Amounts
31.12.2015
31.12.2014
1,035
1,144
42,522
44,074
2.1 litigation
18,426
27,861
2.2 costs for staff
17,718
8,262
1. Company pension f unds
2. Other provisions for risks and charges
2.3 other
Tot al
6,378
7,951
43,557
45,218
The most important positions were as follows:
- a release for litigation amounting to approximately €10 million relating to a former
Centrobanca Spa position for which the reasons for maintaining the provision no longer existed;
- provisions for staff costs related to exposures that are probable but uncertain with regard to
the precise amount and timing of the payment.
12.2 Provisions for risks and charges: annual changes
Pension funds
A. Opening b alances
B. Inc reases
B.1 Allocation for the year
B.2 Changes due to passage of time
Other prov isions
Total
1,144
44,074
45,218
12
23,945
23,957
-
23, 457
23, 457
12
18
30
B.3 Changes due to cha nges in discount rate
-
5
5
B.4 Other changes
-
465
465
( 121)
(25,497)
( 25,618)
(68)
(6, 071)
(6, 139)
-
-
-
C.3 Other changes
(53)
(19, 426)
(19, 479)
D. Final balances
1,035
42,522
43,557
C. Decreases
C.1 Use for the year
C.2 Changes due to cha nges in discount rate
162*
UBI Banca - Notes to the Financial Statements
12.3 Defined benefit company pension funds
This consists of a supplementary pension fund in which there are now nine remaining pensioners
from Centrobanca Spa participating. No changes in the population of the participants has
occurred since the previous year.
The contribution for the year 2015 as specified by the “Fund Regulations” was calculated on the
basis of the weighted average rate used in the valuation performed 1.63%).
Against that contribution the Bank benefited from the returns on using the assets of the fund.
The sums in the fund are not invested in specific assets.
Except for the amount recognised within liability item 120 a), no other liabilities and/or assets
were recognised in the financial statements of the bank.
The main actuarial hypotheses on which the valuation of the fund as at 31.12.2015 was based
are as follows:
- demographic hypotheses from ‘SI2013’ mortality tables;
- a discount rate calculated as the weighted average of the EUR Composite AA curve as at
31.12.2015, using, as weights, the ratios between the amount paid for each due date and the total
amount to be paid until the extinction of the population.
The present value of the fund, calculated on the basis of those assumptions, resulted in an
“actuarial profit” of €53 thousand (point C.2).
Changes in liabilities in 2015 for IAS 19 purposes
A
OPEN ING BALANCES
B
INCREASES
1,144
12
B1
Interest expense
B2
Actuarial losses
B3
Provisions
B4
Other changes
C
DECREASES
( 121)
C1
Benefits paid
(68)
C2
Actuarial gains
(53)
C3
D
12
Other changes
FINAL BALANC ES
1,035
N O. OF PAR TICIPANTS
9
of which ACTIVE
0
12.4 Provisions for risks and charges - other provisions
Items/Components
31.12.2015
31.12.2014
Other provisions for risks and charg es
1. Provision for revocation ( clawback) risks
2. Provision for adjustments on i nterest, commissions and expenses
3. Provision for bonds in default
4. Other provisions for r isks a nd charges
Total
163*
2,500
2,500
-
612
-
-
3,878
4,839
6,378
7,951
UBI Banca - Notes to the Financial Statements
Contingent liabilities
Contingent liabilitie s
For tax litigation
64,653
For revocation (clawback) action
311
For other litigation
411,108
Tot al
476,072
The liabilities regulated by IAS 37, characterised by the absence of certainty over the timing or the
amount of future expense required to settle presumed liabilities, can be classified as being of the
following types:
 probable liabilities;
 contingent liabilities (possible or remote).
The correct identification of the nature of liabilities is of fundamental importance because it
determines whether or not the risk deriving from an obligation must be recognised in the financial
statements.
The recognition of a provision for risks and charges in the financial statements represents a
probable liability of uncertain timing or amount19 and the amount recognised in the accounts
represents the best estimate of the expenditure required to settle the obligation existing as at the
reporting date and reflects the risks and uncertainties that inevitably characterise a number of
different facts and circumstances.
The amount of a provision is measured by the present value of the expenditure that it is assumed
will be necessary to settle the obligation where the effect of the present value is significant.
Future events that might affect the amount required to settle the obligation are only taken into
consideration if there is sufficient objective evidence that they will occur.
The measurement of provisions is periodically reviewed to verify that they are reasonable.
The general and theoretical legal parameters which govern the process of determining the present
value of provisions, which is performed for each single case of litigation and for the relative
residual life, are given below:
• type/nature of the litigation, to be assessed in the light of the legal claims formulated by the
counterparty. Various “macro-families” are identifiable in this respect such as corporate litigation,
labour law cases, financial intermediation litigation, litigation generically definable as
compensation for damages (resulting from non-performance of contract obligations, illegal
actions, violation of regulations) etc.;
• degree of “innovation” in the litigation, to be assessed by considering whether the issues
turn on matters already known and “weighed” by the Bank or on completely new matters which
therefore require study (e.g. resulting from a change in the legislation or in legal orientations);
19
Details of the criteria for recognising provisions are given in Part A.2 of the notes to the financial statements “The
main items in the financial statements”, sub-section 12 “Provisions for risks and charges”, which may be
consulted.
164*
UBI Banca - Notes to the Financial Statements
• degree of “strategic importance” of the litigation to the bank: for commercial reasons the
Bank might for example decide to end a case very rapidly even if it had grounds of defence that
would allow it to resist in court for a long time;
• average length of litigation, to be weighted taking account of geographical factors, which is to
say the location of the jurisdiction in which the case is tried and the state of progress of the trial.
In this respect a decision must be taken on the source of the statistics from which data is
obtained and assistance can be obtained from the lawyers who represent the Bank in litigation
and who have direct knowledge of the jurisdictions concerned for each case;
• the “nature” of the counterparty (e.g. a private individual or a legal entity, a professional
operator or not, a consumer or not, etc.).
A contingent liability is defined as:

a possible obligation, the result of past events, the existence of which will only be
confirmed by the occurrence or (non-occurrence) of future events that are not totally under the
control of the enterprise;

a present obligation that is the result of past events, but which is not recognised in the
accounts because:


it is improbable that financial resources will be needed to settle the obligation;
the amount of the obligation cannot be measured with sufficient reliability.
Contingent liabilities are not recognised in the accounts, but if they are considered “possible”,
they are reported only. On the other hand, in compliance with IAS 37, contingent liabilities that
are considered remote require no disclosure.
As occurs for amounts relating to provisions (for probable liabilities), the amounts for contingent
liabilities are also subject to periodic verification because it is possible that events may occur
which make them remote or probable with the possible need, in the latter case, to make a
provision for them in the financial statements.
A list of contingent liabilities of a tax nature are listed below.
Assessment notices
Substitute tax pursuant to Presidential Decree No. 601/1973 on medium to long-term loans
Court hearings took place during the period for appeals relating to the substitute tax (0.25%)
under articles 15 et seq of Presidential Decree No. 601/19731 on medium to long-term loans and
in particular this involved four payment demands notified and appealed against in the courts.
One appeal was successful before the Provincial Commission with a final judgement, one was
annulled under “internal review” procedures with a consequent ruling of no further case to
answer, while no date has been yet set for hearings for the remaining two.
More specifically, with regard to the aforementioned substitute tax on loans, with Resolution No.
20/E of 28th March 2013 the tax authorities addressed the issue of its application in relation to
the specific case of loan contracts signed abroad and considered that it was not relevant that the
contracts were signed abroad – and would therefore be exempt from the substitute tax – while the
actual formation of the contract in Italy was relevant (see agreement of the parties). On the basis
of that orientation some local offices of the financial authorities sent payment demands to some
Group banks (including the Parent UBI Banca as the survivor of the Centrobanca merger) for the
tax years 2009 and 2010 relating mainly to pooled loans granted jointly with other major national
banks, which also received payment demands.
Good grounds exist for a similar successful ruling for the two appeals of the Bank still to be
heard.
165*
UBI Banca - Notes to the Financial Statements
Preference shares and the registry tax on branch contribution transactions
As part of activities to contain risks connected with contingent liabilities, including those of a tax
nature, the Bank decided that it was best to come to an overall settlement agreement with the tax
authorities on two lines of litigation involving the bank and that is the “preference shares” matter
with the potential tax risk inclusive of tax, interest and fines amounting to €115.3 million and the
dispute regarding the “branch switching” transactions.
The settlement agreement stipulated on 4th February 2016 involves the complete conclusion of all
the litigation by means of the payment of taxes in an amount recalculated by the tax authorities
and of the related interest.
The impact on the income statement for 2015, subject to normalisation, came to approximately
€25 million, with account taken of the provisions made from time to time in the accounts to cover
the tax risk.
Irpeg (former corporate income tax) for 2003
In November 2011 UBI Banca (formerly BPU Banca) was served with a notice of assessment in
relation to its tax treatment for IRPEG (former corporate income tax) purposes of the contribution
of a bank made on 1st July 2003 to the then newly formed Popolare di Bergamo Spa and Banca
Popolare Commercio e Industria Spa. In particular, the full deduction (i.e. tax recovery) by the
transferor BPU Banca of the taxed provisions for risks and charges set aside in previous years
was disputed.
On conclusion of a hearing held in March 2015, the Commission of the Province of Milan accepted
the Bank’s appeal, acknowledging that the notice of assessment had been notified after the
ordinary term had expired and in the absence of the necessary conditions for full assessment. As
a result of that ruling the tax authorities issued a provision agreeing to withdraw the payment
demand for €8.3 million notified in 2014 to UBI Banca, which had already been suspended by the
Provincial Tax Commission of Milan: withdrawal of that demand has not yet taken place.
The tax authorities lodged an appeal on 19th October 2015 to the Regional Tax Commission of
Milan against which the bank promptly filed its defence. It will be recalled that the recent
parliamentary bill addressing the issue of doubling the time limits for assessment moves in a
manner consistent with the arguments put by the Bank in the proceedings in question.
Mortgage and land registry duties
A notice of payment issued to UBI Banca in July 2011 alleged failure to pay mortgage and land
registry taxes for a total of €0.56 million, in relation to the sale, subject to VAT, in 2010 of a set of
properties. The Bank appealed before the Tax Commission of the Province of Milan, which fully
upheld the appeal with a ruling deposited on 1st October 2012. That ruling was appealed in April
2013 with an application made to the Regional Tax Commission by the tax authorities. With a
ruling deposited on 28th May 2014, the Regional Tax Commission confirmed the favourable
decision of the court of first instance. In January 2015 the tax authorities lodged an appeal with
the Supreme Court of Cassation, in relation to which the Bank lodged its own counter appeal.
UBI Banca former Centrobanca: IRES (corporate income tax) losses on loans
In 2009 the Regional Department for Lombardy of the tax authorities served a notice of
assessment on Centrobanca for the tax year 2006, demanding an extra €2.7 million of IRES, fines
of €3.8 million and interest.
More specifically, the tax authorities mainly disputed a deduction for losses on loans due to the
absence of the requirements of “certainty and precision” required by the tax rules. Centrobanca
lodged an appeal with the Tax Commission of the Province of Milan.
In February 2015, UBI Banca (as the survivor of the merger with Centrobanca) and the tax
authorities signed a reconciliation agreement which quantified the increased tax due at €0.1
million (compared with an original demand for €2.7 million) and the fines and interest at €0.1
million (compared with an original demand for €3.8 million in fines alone).
That reconciliation was acknowledged in a hearing of 2nd March 2015 by the Tax Commission of
the Province of Milan which declared the matter finally closed.
166*
UBI Banca - Notes to the Financial Statements
Section 13
Redeemable shares
No shares have been issued with redemption rights.
Section 14
Equity – Items 130, 150, 160, 170, 180, 190 and 200
14.1 “Share capital” and “Treasury shares”: composition
31.12.2015
Number of ordinary sha res
Number of treasury shares held in portfolio
31.12.2014
901, 748,572
901,748, 572
1, 431,829
1,483, 192
The share capital of UBI Banca as at 31st December 2015 amounted to €2,254,371,430 divided
into 901,748,572 shares with no nominal value and it has not changed compared with the
previous year.
14.2 Share capital - Number of shares: annual changes
Ite ms/Ty pe
Ordinary
A. Shar es existing at the beg inning of t he year
- f ully paid up
- not fully paid up
Ot her
901,748,572
-
901,748,572
-
-
-
(1,48 3,192)
-
900,265,380
-
51,363
-
-
-
-
-
- business combinations
-
-
- conversion of bonds
-
-
- exercise of warrants
-
-
- other
-
-
- f ree of charge:
-
-
- in favour of emp loyees
-
-
- in favour of director s
-
-
- other
-
-
A.1 Treasury shar es (-)
A.2 Outstanding shares: init ial numb er
B. Inc reases
B.1 New issues
- by payment:
B.2 Sale of trea sury shares
-
-
51,363
-
C. Decreases
-
-
C.1 Cancellation
-
-
C.2 Purchase of treasury shar es
-
-
C.3 Company disposal operations
-
-
C. 4 Other changes
-
-
900,316,743
-
B.3 Other changes
D. Out st anding shares: closing balances
D.1 Trea sury shares (+)
D.2 Shares outstanding at the end of the year
- f ully paid up
- not fully paid up
167*
1,431,829
-
901,748,572
-
901,748,572
-
-
-
UBI Banca - Notes to the Financial Statements
14.3 Share capital: other information
A total of 51,363 treasury shares were granted during the year, as part of remuneration and
incentive policies for “key personnel” as described in Part I of these notes.
A total of 1,431,829 treasury shares were held in portfolio as at 31.12,2015 with a book value in
equity of €5,155,293.
14.4 Reserves of profits: other information
3 1. 12.2015
S tatutory reserve
31 .12. 2014
57 3,91 2
Reserve under Art. 2 2 Legislative Decr ee No. 153 /199 9
Extr aor dinary reserve
Reserve for the repurchase of treasury shares
36, 494
97 0,87 0
1,0 40, 797
5,15 5
7, 250
Taxed p rofit reserve
Reserve under Art. 1 3 pa r.6 Legislati ve D ecree N o. 12 4/
Reserve under Art. 6 Legislative D ecree No. 3 8/20 05
Reserves of profits for ACT - health policy
4
4
76 2
762
1 6,51 5
16, 515
2,26 7
2, 267
49
49
1,606, 028
1 ,6 78 ,050
Retained earn ings
Re serv es of p rofit s
5 73, 912
3 6,49 4
31.12.2015
31.12.2014
Reserve for valuation of equity-accounted investees
12, 153
12, 153
Reserve for reversal of prior year d epreciation and amortisation
61, 649
61, 649
Reserve under art. 7 par. 2 Law No. 218/ 1990
75, 213
75, 213
Reserve pursuant to Art. 7 par . 3 Law No. 218/1 990
71, 885
71, 885
437, 854
437, 854
Reserves f or supplementary pension ref orms
-3, 618
-3, 618
Other reserves
22, 324
21, 099
677,460
676,235
Reserves f or tr ansactions under common control
Othe r reserv es
168*
UBI Banca - Notes to the Financial Statements
The summary table below gives the origin, the availability for use and distribution of the items of
equity (figures given to one hundredth of a euro) in compliance with Art. 2427, paragraph 1, No.
7-bis) of the Italian Civil Code.
A mou nt as at 31. 12.2015
A ) S H A R E C A PITA L
S ha re c apita l
A mo unt av ailab le
Po ssibility of
use
Tax con strain t ( 1)
2,254,371 ,430.00
Use s in th e las t 3 y ears
512 ,559,822.43
B ) CA PI TA L RES ERV ES
S ha re p rem ium reserve
B ) RES ER V ES O F PR OF ITS
3,798,429 ,612.02
3,798 ,429,612.02
A B ( 2)( 3)
S ta tut ory reserve
573,911 ,871.93
573 ,911,871.93
B ( 4)
Ext ra ordina ry reserv e
970,870 ,723.01
970 ,870,723.01
A BC
36,494 ,083.45
5,155 ,292.99
36 ,494,083.45
-
AB C
AB C
762 ,160.51
762,160.51
AB C
52 ,605.46
52,605.46
AB C
12,152 ,680.05
12 ,152,680.05
AB
12 ,152,680.05
61,649 ,339.66
61 ,649,339.66
A BC ( 6)
61 ,649,339.66
75,213 ,372.10
75 ,213,372.10
AB ( 5) ( 6)
65 ,769,618.41
71,884 ,949.60
437,853,778 .96
71 ,884,949.60
A B ( 5)
A B ( 7)
71 ,884,949.60
39 ,125,309.00
Reserv e under Art . 22 Leg isla tive D ecree No. 153/1 999
Reserv e for th e repurc ha se o f t rea sury sha res
Reserv e under Art . 13 pa r. 6 Leg isla tiv e D ecree N o. 124/93
Reserv es un a vailab le pursua nt t o A rt. 6 L eg isla t ive D ec ree
No. 38/ 2005
Reserv es of prof it s fo r A CT - hea lt h policy
Other res erv es of prof its a nd ret ained ea rning s
142 ,676,307.98
918,436,688.7 8
72,021,230.4 0
762,160.51
16,514 ,823.94
2,266 ,865.22
C) OTH ER R ES ERV ES
Reserv e for va luat io n of equit y- a cc ount ed invest ees
Reserv e for rev ersa l o f prior y ea r d eprec iation and
a mo rt isa tion ( 5)
Reserv e pursua nt to A rt. 7 pa r. 2 La w No . 2 18/1990 (5)
Reserv e pursua nt to A rt. 7 pa r. 3 La w No . 2 18/1990
Reserv es for tra nsa c tions u nder com mon c ontro l
Reserv es for supp lem ent ary pension reform s
- 3,618,366 .73
Other res erv es
22,323 ,959.51
22 ,323,959.51
AB C
1,844 ,167.38
1 ,844,167.38
A B ( 5)
1 ,844,167.38
29 ,148,801.10
A B ( 6)
27 ,453,137.73
D ) V A LU A TION R ES ERV ES
Rev a lua tion reserve L aw No. 350/ 2003
F a ir v alue reserve - a v aila ble- for- sa le fina n cia l a sset s
281,294,088 .54
F a ir va lue reserv e – a do ption of fa ir v a lu e in p la c e of co st
(5 )
Reserv e f or a ct ua rial ga ins/los ses on pos t- employ m en t
benef it prov ision
Other valua tio n reserv es
E) Treasu ry s hares
29,148 ,801.10
- 7,554,053 .49
- 344,438 .88
- 5,155,292 .99
TOTA L
8,635,522,4 53.34
Pro fit
5,654,7 38,325.78
935, 877,492.75
123,423,301. 60
Total shareh olders’ eq uity as at 31st D ecem ber 2015
8,758,945,7 54.94
A = for increase in the share capital
B = to cover losses
C = for distribution to shareholders
(1) Amounts on which tax is deferred
(2) An amount of €918,436,688.78 was drawn from the share premium reserve in 2015 to replenish the 2014 loss.
(3) See details of movements in the reserve occurring over the years:
year
distributable reserve (*)
non distributable reserve
1 ,310,245,825.91
2007
2011
2012
2013
2015
-918,436,688.78
2,158,641,579.47
3,798,429,612.02
5,790,132,233.70
329,528,573.34
-2,713,053,965.45
13,633.30
1,639,788,032.55
total
1,310,245,825.91
7,100,378,059.61
7,429,906,632.95
4,716,852,667.50
4,716,866,300.80
3,798,429,612.02
description
Re serves as at 31.12.2006
increase as a result merger with Banca Lombarda
increase in the share capital
use to repleni sh losses (**)
bond conversion s and share capital increases
use to repleni sh losses (**)
(*) In consideration of the lack of clarity in the legislation over whether a reserve that arose following merger transactions
recognised in accordance with IFRS 3 is available for distribution to shareholders, the previously existing portion and the
subsequent increases in capital are considered distributable.
(**) The replenishment of losses was performed by drawing on part of the increase arising from the merger in relation to the
revaluation of items in the accounts of the merged bank and recognition of goodwill following the purchase price allocation
amounting to €4,096,625,123. As a result of the losses mentioned that increase was reduced to €465,134,468.77.
(4) Only that part of the reserve which exceeds one fifth of the share capital is available, even for an increase in capital and
for distribution (Art. 2430, paragraph 1, Italian Civil Code).
(5) Distribution to shareholders is dependent on compliance with the provisions of paragraphs 2 and 3 of Art. 2445 of the
Italian Civil Code. If it is used to cover losses, no distribution can be made until the reserve has been replenished.
169*
UBI Banca - Notes to the Financial Statements
(6) The “Value realignment reserve” under Law No. 266/2005 with taxation deferred amounting to a total of €90,607,559.00
consisted of €27,453,137.73 recognised in the “Valuation reserve – adoption of fair value to replace cost”, €61,649,339.66 in
the “Reserve for reversal of prior year amortisation and depreciation” and €1,505,081.61 in the "Reserve under Art. 7, Par. 2,
Law No. 218/90".
(7) The reserve for transactions under common control was increased during last year by €239,338,214.08 as a result of the
cancellation of the investment in Centrobanca Spa due to the merger concluded in 2013. As a result of that increase, the
reserves of the merged bank that are only taxable if distributed were reconstituted in the surviving bank on the basis of Art.
172, paragraph 5 of the Consolidated Income Tax Act (€39,114,523 on the basis of the reference made by Art.1, paragraph
473 of Law No. 266/2005 to Art. 13 of Law No. 342/2000 and €10,786 pursuant to Art. 13, paragraph 6 of Legislative
Decree No. 124/1993). When a dividend was distributed for the financial year 2008, an amount of €273,579,193.83 was
drawn from the extraordinary reserve, while €45,027,337.95 was drawn for the distribution of the 2011 dividend.
As already reported, the 2011 incentive scheme for the Senior Management of the UBI Group
requires the Parent, UBI Banca, to deliver treasury shares to its employees and to grant shares to
the employees of its subsidiaries.
According to IFRS 2 “share-based payments”, that scheme constitutes an “equity settled”
operation where payment is based on shares and made using equity instruments. On this basis,
because the objective of IFRS 2 is to recognise the impact on profit and loss of the remuneration
paid by means of equity instruments in the income statement in the form of staff costs, UBI
Banca and the subsidiaries involved in the scheme recognised the cost for the year within the
item 150a “Administrative expense: staff costs” against an increase in equity made by posting the
amount to a separate reserve in equity because the obligation of the company will be extinguished
by the delivery of equity instruments and that obligation will be settled in any event by UBI
Banca.
In this context, the item “reserves – other” also includes stock grant reserves relating to the share
component of the incentive scheme for UBI Banca personnel amounting to €1.5 million and for
the personnel of Group member companies amounting to €829 thousand.
14.5 Capital instruments: composition and annual changes
The Bank has no capital instruments.
14.6 Other information
No other information to report.
170*
UBI Banca - Notes to the Financial Statements
Other information
1. Guarantees granted and commitments
Tr ansactions
31.12.2015
1) Guarantees granted of a fina ncial nature
31.12.2014
4,6 24, 707
10,085,508
a) Banks
2,8 91, 231
8,500,266
b) Customers
1,7 33, 476
1,585,242
2) Guarantees granted of a commercial nature
a) Banks
b) Customers
3) Irrevocable commitments to pay f unds
a) Banks
i) of certain use
ii) of uncertain use
b) Customers
i) of certain use
ii) of uncertain use
5 67, 138
463,754
3 88, 944
414,767
1 78, 194
48,987
1,6 72, 692
1,632,712
2 01, 789
647,782
70, 419
636,807
1 31, 370
10,975
1,4 70, 903
984,930
27, 605
29,663
1,4 43, 298
955,267
4) Commitments underlying credit derivatives: protection sales
-
-
5) Assets pledged to guarantee obligations to third parties
-
-
6) Other commitments
10,1 27, 437
8,786,031
Tot al
16,991,974
20,968,005
2. Assets pledged to secure own liabilities and commitments
Por tfolios
31.12.2015
31.12.2014
419,262
1. Financial assets held for trading
2. Financial assets designated at fair val ue
415,950
-
-
3. Availa ble-f or -sale financial assets
8,053,685
10, 508,152
4. Held-to-matur ity investments
2,644,892
1, 850,111
5. Loans and advances to banks
6. Loans and advances to customers
7. Property, plant and equipment
-
-
3,611,189
3, 719,615
-
-
The financial assets contained in the table relate to securities owned, pledged to guarantee
liabilities and commitments of the Bank as follows:
171*
UBI Banca - Notes to the Financial Statements
Portfolios
To guarantee
Own securities
Liabilities or commitments
issued by third
parties
Financial assets for trading:
Re purchase agre ements
Financial assets for-sale:
Bank of Italy Advance s
3,984,726
Re purchase agre ements
3,934,201
issued by group
member companies
419,262
EIB F inancing
70,076
Othe r transactions
64,681
8,053,684
Financial investments held to maturity:
Bank of Italy Advance s
953,623
Re purchase agre ements
1,691,268
2,644,891
Loans to customers:
EIB F inancing
561,806
Cove red Bond Iss uance
287,745
1,980,714
Bank of Italy Advance s
780,924
3,323,444
287,745
The table does not report loans (amounting to approximately €1.33 billion) pledged to guarantee
the former B@nca 24-7 Spa securitisation, because the bonds are not issued by UBI Banca but by
a special purpose entity.
In addition to the assets reported above, securities were also pledged as guarantees as follows:
To guarantee
Liabilities or commitments
Nominal amount of securities
is sued by a special purpose
entity
Bank of Italy Advance s
own iss ue s ecurities
2,145,268
3,450,000
2,145,268
3,450,000
Notes, senior tranches, acquired through reverse repurchase agreements were issued by special
purpose entities for securitisations created by the following “originators”:




UBI Leasing Spa for a nominal amount of €468.7 million;
Banca Popolare di Ancona Spa for a nominal amount of €344.2 million;
Banco di Brescia Spa for a nominal amount of €239.9 million;
Banca Popolare Commercio e Industria Spa for a nominal amount of €157.5 million.
Notes issued as part of the UBI Banca (former B@nca 24-7 Spa) securitisation included
instruments amounting to €934.9 million lodged with the Bank of Italy to guarantee advances.
The instruments issued by the Bank consisted of covered bonds issued at a floating rate for
€3.450 billion nominal.
3. Information on operating leases
No operating lease contracts were entered into.
4. Management and intermediation on behalf of third parties
172*
UBI Banca - Notes to the Financial Statements
Type of ser vices
31.12.2015
31.12.2014
1. Executio n of or ders on behalf o f customer s
a) Purchases
1. Settled
2. N ot settled
3,148,282
800,343
3,140,455
800,109
7,827
234
4,066,376
646,861
4,058,864
645,036
7,512
1,825
a) individ ua l
-
-
b) collective
-
-
-
-
-
-
b) Sales
1. Settled
2. N ot settled
2. Por tfolio ma nageme nts
3. Custody and administra tio n of secur ities
a) securities of third parties held on deposit : connected with depository b ank activity (not
including p ortfolio management)
1. securities issued by the reporting ba nk
2. other securities
b) secur ities of thir d pa rties held on d eposit (not including por tfolio management): other
-
-
60,818,209
67, 189,116
1. securities issued by the reporting ba nk
22,492,702
19, 965,457
2. other securities
38,325,507
47, 223,659
c) securities belonging to third parties, dep osited wi th third parties
60,679,899
67, 029,383
d) own securities deposited with third p arties
27,338,046
29, 753,178
12,717,058
21,916,775
4) Other transa ctio ns
The “Custody and administration of securities” relates to financial instruments belonging to
ordinary customers of the network banks.
5. Financial assets subject to offsetting in the financial statements, or subject to master
netting arrangements or similar agreements.
Type of in st rumen t
Gr oss amoun t of
t he financial
asset s (a)
Amoun t of the
financial liabilities
offset in th e accoun ts
(b)
Related amou nts not offset in th e
accoun ts
Net amou nt of th e
fin ancial assets
repo rted in th e
acco unt s (c=a-b)
Net amou nt
Cash deposits
received as
collateral (e)
Finan cial
instru men ts (d)
31 .1 2.201 5
Net amoun t
(f=c-d-e)
31.1 2.201 4
1. Derivatives
758,603
-
75 8,603
431,427
32 4,35 6
2,820
4,4 45
2. Rep urchase agreements
770,335
-
77 0,335
769,577
-
758
1,6 52
-
-
-
-
-
-
-
3. Stock lending
4. Other
-
-
-
-
-
-
Total 3 1.12.2 015
1 ,5 28,9 38
-
1,528 ,9 38
1,20 1,00 4
324 ,3 56
3,57 8
Total 3 1.12.2 014
1 ,3 55,3 97
-
1,355 ,3 97
1,04 3,73 0
305 ,5 70
173*
x
x
6,097
UBI Banca - Notes to the Financial Statements
6. Financial liabilities subject to offsetting in the financial statements, or subject to master
netting arrangements or similar agreements.
Related amoun ts n ot offset in t he
acco unt s
Type of in str umen t
Gr oss amoun t of t he
finan cial liabilities (a)
Amou nt of finan cial
assets offset in th e
accoun ts (b)
Net amou nt of th e
finan cial liabilit ies
repor ted in th e
accou nt s (c=a-b)
Fin an cial
instru ments (d )
Net amoun t
Cash deposits lodged
as collateral (e)
3 1.12 .2 015
Net amoun t
(f=c-d-e)
31 .12.20 14
1. Deri vati ves
1,232,207
-
1,2 32,20 7
431,427
797 ,631
3,14 9
24,528
2. Rep urchase agreements
6,107,667
-
6,1 07,66 7
6,099,880
7 ,787
-
-
3. Stock lending
-
-
-
-
-
-
-
4. Other transactions
-
-
-
-
-
-
Total 3 1.12.2 015
7 ,3 39,87 4
-
7,339 ,874
6 ,5 31,30 7
8 05 ,4 18
3 ,1 49
Total 3 1.12.2 014
7 ,3 73,97 8
-
7,373 ,978
6 ,2 99,20 0
1 ,0 50 ,2 50
x
x
24,52 8
With regard to derivatives, no offsetting has been carried out in the accounts between the same
counterparties, because not all of the criteria laid down by IAS 32 are present.
The following has been reported in the columns for related amounts not subject to offsetting: the
value of the related derivative by single counterparty up to the full amount under financial
instruments, while the margin deposits are given up to the full amount, again for single related
counterparty under the column for deposits received or made.
As a consequence, given the related items for derivatives assets and liabilities and the amount of
the respective margin deposits received or made, the column for the net amount (table 5)
represents the residual exposure of UBI Banca by counterparty of €1.6 million, while the residual
exposure of third parties (table 6) is €14.1 million.
The conditions set by IAS 32 were also not met for offsetting asset and liability repo positions with
the same counterparties in the financial statements.
The following has been reported in the columns for related amounts not subject to offsetting: the
fair value of the underlying security by single counterparty up to the full amount under financial
instruments, while the margin deposits are given similarly up to the full amount (table 5, assets of
€758 thousand) also by single related counterparty under the column for deposits received.
7. Stock lending transactions
No stock lending transactions to report.
8. Information on joint arrangements
Information on this item is given in the Consolidated Annual Report, which may be consulted.
174*
UBI Banca - Notes to the Financial Statements
Part C – Notes to the Income Statement
Section 1 Interest - Items 10 and 20 1.1 Interest income and similar: composition
It ems / Type
Debt instr uments
2,638
1. Financial assets held for trading
Othe r
transa ctions
Financing
-
2015
2014
-
2,638
22,305
366,506
-
-
366,506
408,737
3. Held-to-matur ity investments
45,809
-
-
45,809
97,731
4. Loans and advances to banks
70,469
14, 830
-
85,299
86,120
2,726
327, 629
-
330,355
464,189
2. Availa ble-f or -sale financial assets
5. Loans and advances to customers
-
6. Financial assets designated at fair val ue
-
X
7. Hedging derivatives
X
X
8. Other assets
Total
X
488,148
342,459
-
-
-
43,968
43,968
43,234
151
151
155
44,119
874,726
1,122,471
Interest on non-performing (previously termed “deteriorated”) assets amounted to €39.289 million
(€47.398 million in 2014).
1.2 Interest income and similar: hedging differentials
Items
2015
2014
A. Positive differentials on hedging transactions
265, 882
308,874
B. Negative diff erentials on hedging transactions
(221, 914)
(265 ,640)
43,968
43,234
C. Balanc e (A-B)
1.3 Interest and similar income: other information
1.3.1 Interest income on financial assets held in foreign currency
It ems
2015
Interest i ncome on financial assets held in f oreign currency
2014
11, 999
8,403
1.3.2 Interest income on finance lease transactions
No interest income on finance lease transactions was recognised.
175*
UBI Banca - Notes to the Financial Statements
1.4 Interest expense and similar: composition
Ite ms/Type
Borrowings
1. Due to central banks
2. Due to banks
3. Due to customers
4. Debt securities issued
Securit ies
X
-
(7,110)
(19,846)
X
-
( 37,448)
(78,973)
(11,853)
X
-
( 11,853)
(20,143)
-
(829,393)
( 890,745)
(15,959)
(829,393)
(2,199)
-
-
(2,199)
-
-
-
-
-
(316)
(316)
(361)
X
8. Hedging derivatives
X
X
Total
2014
(7,110)
6. Financial liabilities designated at f air value
7. Other liabilities a nd provisions
2015
(37,448)
X
5. Financial liabilities held f or tr ading
Othe r tr ansactions
X
(58,610)
(829,393)
-
-
-
(316)
(888,319)
( 1,026,027)
The item interest expense payable to central banks consists of interest accruing during the year
on financing obtained from the ECB.
The following refinancing operations existed under the ECB TLTRO issuance programme as at 31st
December 2015:
 nominal amount €2.9 billion, issuance 25.03.2015, rate 0.05%
 nominal amount €2 billion, issuance 30.09.2015, rate 0.05%
 nominal amount €3.2 billion, issuance 17.12.2014, rate 0.15%
1.5 Interest expense and similar: hedging differentials
Interest expense contained no differentials relating to hedging transactions (see section 1.2 of this
section).
1.6 Interest expense and similar: other information
1.6.1 Interest expense on liabilities held in foreign currency
It ems
2015
Interest expense on liabilities held in foreign currency
2014
(5, 759)
(1, 038)
1.6.2 Interest expense on liabilities for finance lease transactions
It ems
2015
Interest expense on liabilities f or finance lease transacti ons
2014
(316 )
176*
( 361 )
UBI Banca - Notes to the Financial Statements
Section 2 Fees and commissions - Items 40 and 50 2.1 Fee and commission income: composition
Type of service/Amounts
2015
a) guarantees granted
2014
7,572
8,360
-
-
18,607
17,665
9,342
9,667
229
961
-
-
3.1. individual
-
-
3.2. collecti ve
-
-
1,198
999
-
-
620
524
(1)
(1)
5,935
4,361
5,935
4,361
-
-
1,284
1,154
9.1. portfolio management
-
-
9.1.1. individual
-
-
9.1.2. collective
-
-
9.2. insurance products
301
426
9.3. other pr oducts
983
728
b) credit derivatives
c) management, trading and advisory services:
1. trading in financial instruments
2. foreign exchange trading
3. portfolio management
4. custody and administration of securities
5. depositor y banking
6. placement of secur ities
7. receipt a nd tra nsmission of orders
8. advisory activities
8.1 on investments
8.2 on financial structure
9. distribution of third party services
d) collection and payment services
18,925
18,107
e) servicer activities for securitisa tion transactions
-
-
f) services for f actoring transactions
-
-
g) tax collection and payment services
-
-
h) management of multilateral trading systems
i) current account administration
j) other services
k) stock lending transactions
Total
177*
-
-
21
22
48,287
39,320
-
-
93,412
83,474
UBI Banca - Notes to the Financial Statements
2.2 Fee and commission income: distribution channels for products and services
Channels/Values
2015
2014
a) Through own branches:
1,904
1. Portf olio management
1,678
-
-
620
5 24
1, 284
1,1 54
-
-
1. Portf olio management
-
-
2. Placement of securities
-
-
3. Thir d pa rty services and products
-
-
-
-
1. Portf olio management
-
-
2. Placement of securities
-
-
3. Thir d pa rty services and products
-
-
2. Placement of securities
3. Thir d pa rty services and products
b) through indir ect networ ks:
c) Ot her distribut ion channels:
2.3 Fee and commission expense: composition
S e rv ic e s / A m o u n t s
2 0 15
a ) gua ra nte e s re c e ive d
2 0 14
(392)
b) c re dit de riva tive s
c ) m a na ge m e nt a nd tra ding s e rvic e s :
1. tra ding in fina nc ia l ins trum e nts
2. fo re ign e xc ha nge tra ding
3. po rtfo lio m a na ge m e nt:
3.1. o wn
3.2. o n be ha lf o f third pa rtie s
4. c us to dy a nd a dm inis tra tio n o f s e c uritie s
5. pla c e m e nt o f fina nc ia l ins trum e nts
6. fina nc ia l ins trum e nts , pro duc ts a nd s e rvic e s dis tribute d thro ugh indire c t ne two rks
d) c o lle c tio n a nd pa ym e nt s e rvic e s
e ) o the r s e rvic e s
To ta l
178*
(18,845)
-
-
(26,183)
(24,625)
(4,907)
(2,537)
(1)
(5)
-
-
-
-
-
-
(2,020)
(1,411)
-
-
(19,255)
(20,672)
(3,279)
(2,958)
(14,579)
(12,791)
( 4 4 ,4 3 3 )
( 5 9 ,2 19 )
UBI Banca - Notes to the Financial Statements
Section 3 Dividends and similar income - Item 70 3.1 Dividends and similar income: composition
ERRORE!
Items/Inc ome
ERRORE!
2015
Income from
units in UCITS
Dividends
A. Financial assets held f or tr ading
B. Available-for-sale financial assets
C. Financial assets at fair va lue
2014
Income from
units in U CITS
Dividends
39
2
34
-
1,706
4,123
4,812
1, 173
3,013
D. Equity investments
240,547
Tot al
245,305
-
2,169
X
-
268,301
4,125
X
275,316
1,173
Details are given below of dividends received from equity investments in subsidiaries and
companies subject to significant influence.
20 15
On equity inves tments in s ubsidiaries
2014
229,843
Banca Carime Spa
Banca Popolare Commercio e Industria Spa
Banca Popolare di Ancona Spa
Banca Popolare di Be rgamo Spa
Banca Re gionale Europe a Spa
Banco di Bres cia San Paolo CAB Spa
BPB Immobiliare Srl
235,771
-
11,180
28,221
25,800
7,467
4,146
133,512
129,109
10,704
36,111
8,411
3,151
260
984
Società Bresciana Immobiliare Mobiliare - S.B.I.M. Spa
1,855
1,400
IW Bank Spa
5,492
3,837
UBI Factor Spa
5,722
-
UBI Pramerica SGR Spa
28,199
20,053
On equity inves tments in companies subject to s ignificant influence
10,704
32,530
1,960
5,000
Aviv a As sicurazioni Vita Spa
Aviv a Vita Spa
-
6,000
Lombarda Vita Spa
8,598
14,083
Polis F ondi SGRpA
146
119
-
7,328
240,547
268,301
UBI As sicurazioni Spa (*)
Total
(*) Company disposed of in December 2014.
179*
UBI Banca - Notes to the Financial Statements
Section 4 Net trading income - Item 80 4.1 Net trading income: composition
Transactions/Components of income
I ncome from
trading
(B)
Gains
(A)
1. Financial assets held for trading
Losses from
trading
(D)
Los ses
(C)
Net income (loss)
[(A+B)-(C+D)]
381
22,101
(2,336)
(3,787)
16,359
278
13,049
(1,286)
(2,158)
9,883
95
239
(997)
(5)
(6 68)
1.3 Units in UCITS
8
11
(53)
-
(34)
1.4 Financing
-
-
-
-
-
1.5 Othe r
-
8,802
-
(1,624)
7,178
1.1 De bt instruments
1.2 Equity ins trume nts
2. Financial liabilities held for trad ing
-
1,473
-
(1,543)
(70)
2.1 De bt instruments
-
1,473
-
(1,543)
(70)
2.2 Payables
-
-
-
-
-
2.3 Othe r
-
-
-
-
-
3. Financial assets and liabilities: exchange
rate differences
x
x
4. Derivative ins truments
161,550
243,183
(174,920)
(224,433)
4.1 Financial derivative s:
161,550
243,183
(174,920)
(224,433)
9,180
157,239
229,410
(171,037)
(213,745)
1,867
- on debt instrume nts and interest rates
- on equity ins trume nts and share indices
- on currencies and gold
- Othe r
4.2 Credit d erivative s
Total
432
x
3,695
x
x
x
(4)
x
433
(623)
x
9,180
3,500
3,800
3,879
10,078
(3,879)
(10,065)
-
-
-
-
13
-
161,931
266,757
(177,256)
(229,763)
25,902
The most significant positions included the following:
- a net gain for financial assets held for trading of €9.9 million on debt securities and a net loss of
€0.7 million on equity instruments;
- a net gain of €5.4 million for derivatives on equity and debt instruments;
- a gain of €11.3 million on foreign exchange trading.
180*
UBI Banca - Notes to the Financial Statements
Section 5 Net hedging income - Item 90 5.1 Net hedging income: composition
Inc ome components/Amounts
2015
2014
A. Inc ome r elating to:
A.1 Fair value hedge derivatives
268,402
469,047
A.2 Hedged financial assets (fair value)
115,464
610,960
A.3 Hedged financial liabilities (f air value)
112,005
39,129
A.4 Cash f low hedge f inancia l derivatives
-
-
A.5 Assets and liabilities in foreign curr ency
-
-
495,871
1,119,136
B.1 Fair value hedge der ivatives
(226,425)
( 663, 982)
B.2 Hedged f inancial assets ( fair value)
(248,853)
(14, 359)
(9,515)
( 448, 864)
B.4 Cash flow hedge financial derivatives
-
-
B.5 Assets and lia bilities in foreign currency
-
-
( 484,793)
( 1,127,205)
11,078
( 8,069)
Tot al income from hedging act ivity (A)
B. Expense relat ing t o:
B.3 Hedged f inancial liabilities (fair val ue)
Tot al expense from hedging activit y ( B)
C. Net hedging income (loss) (A-B)
Details of the income and expense for hedging transactions in relation to the items hedged are as
follows:
Description
net income
Assets:
Available-for-sale debt instruments
Loans and advances to customers
6,711
196
Liabilities:
bonds in issue
4,171
Net income on hedging
11,078
181*
UBI Banca - Notes to the Financial Statements
Section 6 Income/expense from disposal or repurchase - Item 100 6.1 Income (loss) from disposals/repurchases: composition
It ems/Income component s
2015
Profits
2014
Losses
Net income
Profits
Losses
Net pr ofit
Financia l assets
1. Loans and advances to banks
2. Loans and advances to customers
3. Availa ble-f or -sale financial assets
-
-
-
-
-
-
3,914
( 8,164)
(4,250)
2,447
(11,771)
(9,324)
257,701
(599)
257,102
167,893
(1,150)
166,743
168,620
(575)
168,045
138,261
(1,079)
137,182
82,196
(7)
82,189
9,910
(71)
9,839
6,885
(17)
6,868
19,722
-
19,722
-
-
-
-
-
-
-
-
-
-
-
-
261,615
(8,763)
252,852
170,340
( 12,921)
157,419
1. Due to banks
-
-
-
-
-
-
2. Due to customers
-
-
-
-
-
-
3. Debt securities issued
164
(15,747)
(15,583)
59
(7,999)
(7,940)
Tot al lia bilities
164
(15,747)
( 15,583)
59
(7,999)
(7,940)
3.1 Debt instruments
3.2 Equity instruments
3.3 Units in UCITS
3.4 Financing
4. Held-to-matur ity investments
Tot al assets
Financia l liab ilities
The net result for the disposal of loans to customers, a loss of €4.25 million, related to an
operation to dispose of loans, part of operations designed to reduce the impact of positions
difficult to dispose of and with very large operating costs.
As concerns “Available-for-sale financial assets - debt instruments”, the profits were mainly
attributable to disposals of government securities and amounted to €165.2 million.
The most significant component for equity instruments regarded the profit of €82.2 million on the
disposal of 4.04% of ICBPI Spa.
The repurchase of bonds subscribed by institutional counterparties and retail customers
generated a net loss of €15.6 million.
182*
UBI Banca - Notes to the Financial Statements
Section 7 Net income/expense on assets and liabilities designated at fair
value - Item 110 7.1 Net change in financial assets/liabilities designated at fair value: composition
Gains
(A)
Tr ansactions/Component s of income
1. Financial assets
Profit on sale
( B)
Losses
(C )
Losses on sale
(D)
Ne t income ( loss)
[( A+B)-(C+D)]
5,126
230
(1,422)
(20)
-
-
-
-
-
1.2 Eq uity instruments
2,014
182
(367)
-
1, 829
1.3 Units in UC ITS
3,112
48
(1,055)
(20)
2, 085
-
-
-
-
-
-
-
-
-
-
2.1 Debt secur ities issued
-
-
-
-
-
2.2 Due to banks
-
-
-
-
-
2.3 Due to customers
-
-
-
-
-
1.1 Debt instruments
1.4 Financing
2. Financial liabilit ies
3. Other financial assets a nd liabilitie s in foreign
currency: fore ign currency differ ences
x
4. Credit and financia l derivatives
Total
x
x
3,914
x
442
-
-
-
-
-
5,126
230
(1,422)
(20)
4,356
The table below gives the most significant changes in fair value that occurred in the UCITS
portfolio in 2015.
De sc r iption
Ta ge s Fu nds
O ther h edge f un ds
To tal
Ope nin g ba la n ce s
e x c ha ng e
g a ins/ losse s r a te e ffec t s c losing b ala nc e
R ede m pt ions
pr ofits /loss es
5, 237
-84
28
-223
44 2
5,400
1 22,03 9
-84
28
2,05 7
442
12 4,482
116, 802
2, 280
183*
119,082
UBI Banca - Notes to the Financial Statements
Section 8 Net impairment losses - Item 130 8.1 Net impairment losses on loans: composition
Transac tions/Components of income
Impairment losses
Specific
Portfolio
Write-offs
A. Loans and advances to banks
- Financing
- Debt instruments
B. Loans and advances to customers
Non-performing (previously ter med
deter iorated) loa ns purchased
- Financing
- Debt instruments
Other loans a nd receivables
- Financing
- Debt instruments
C. Total
Reversals
2015
Specific
Other
Portfolio
Other
reversals
Of interest
2014
Of interest
Other reversals
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(29,846)
(168,165)
-
11,521
48,790
-
33,534
(104,166)
(116,738)
-
-
-
-
x
x
-
-
-
-
x
x
x
x
-
-
-
-
-
-
-
-
-
-
(29,846)
(168,165)
-
11,521
48,790
-
33,534
(104,166)
(116,738)
(29,846)
(168,165)
-
11,521
48,790
-
33,534
(104,166)
(116,738)
-
-
-
-
-
-
-
-
-
(29,846)
(168,165)
-
11,521
48,790
-
33,534
(104,166)
(116,738)
Specific impairment losses on loans to customers consisted almost exclusively of impairment
losses on mortgages and personal loans, in the portfolios of the former B@nca 24-7 Spa and the
former Centrobanca Spa.
8.2 Net impairment losses on available-for-sale financial assets: composition
Impairment losses
Rever sals
Specific
Specific
Transact ions/Components of
income
Write-offs
A. Debt instruments
Ot her
of inter est
(13,645)
-
B. Equity instruments
-
(3 75)
C. Units in UCITS
-
2015
2014
other r eversals
-
-
(13,645)
898
-
-
(375)
(2,676)
(1,5 36)
x
x
(1,536)
(1,217)
x
-
D. Loans to banks
-
-
-
-
E. Loans to customer s
-
-
-
-
-
-
(13,645)
(1,911)
-
-
(15,556)
(2,995)
Tot al
Write-offs of debt instruments consist of €10 million for the bond BANCA POPOLARE ETRURIA
06/16 TV and €3.6 million for the bond BANCA MARCHE 05/15 TV%.
Impairment losses on units in UCITS consisted of write-downs of private equity funds amounting
to €1.5 million.
8.3 Net impairment losses on held-to-maturity investments: composition
No net impairment losses were recognised on held-to-maturity investments.
184*
UBI Banca - Notes to the Financial Statements
8.4 Net impairment losses on other financial transactions: composition
Impairment losses
Transa ctions/
Compone nts of income
Por tfolio
Specific
Write-offs
2015
Reversals
Specific
Other
Por tfolio
Other
rever sals
Of interest
2014
Other
rever sals
Of inter est
A. Gua rantees granted
-
(3)
(1,592)
-
3,198
-
-
1,603
B. Credit derivati ves
-
-
-
-
-
-
-
-
(2,000)
-
C. Commitments to pay fund
-
-
(1,894)
-
-
-
-
(1,894)
182
D. Other transactions
-
-
-
-
-
-
-
-
-
E. Tota l
-
(3)
( 3,486)
-
3,198
-
-
(291)
(1,818)
The item, “Impairment losses – other”, relates to losses recognised on specific guarantees granted,
while portfolio impairment is determined by using the calculation methodology employed to
calculate recognition of collective impairment losses in the UBI Group.
Section 9 Administrative expenses - Item 150 9.1 Staff costs: composition
Type of expense/Amounts
2015
1) Employees
a) Wa ges and salaries
b) Social security charges
c) Post-employment benef its
d) Pension expense
e) Provision for post-employment benef its
f ) Provision f or pension and similar:
- defined contribution
- defined benefit
g) Payments to external supplementar y pension plans:
- defined contribution
- defined benefit
h) Expenses resulting from share based payments
i) Other employee benefits
2) Other sta ff in ser vic e
3) Dir ector s and statutor y a uditors
4) Ex pense s for ret ire d staff
5) Recov eries of expenses for sta ff on secondment to ot her companies
6) Reimb ursements of ex penses for staff on secondment at the Bank
Total
2014
(227,728)
( 218,191)
(149,901)
(140,427)
(39,923)
(37,650)
(8,144)
(7,846)
-
-
(790)
(1,031)
(12)
(27)
-
-
(12)
(27)
(6,789)
(6,378)
(6,789)
(6,378)
-
-
-
-
(22,169)
(24,832)
(328)
(308)
(6,502)
(6,388)
-
-
86,934
87,638
( 35,475)
(32,721)
(183,099)
( 169,970)
A discussion is given in the “Income statement” section of the Management Report which may be
consulted.
185*
UBI Banca - Notes to the Financial Statements
9.2 Average number of employees by category
2015
1) EMPLOYEES
2014
1,613
1,579
a. number of senior ma nagers
138
135
b. number of middle managers
900
875
c. remaining employees
575
569
2) OTHER PERSONNEL
TOTAL
32
32
1,645
1,611
“Other personnel” includes the board members of UBI Banca.
9.3 Defined benefit company pension funds: expenses and income
See section 12 sub-section 12.3 “Defined benefit company pension funds” in the balance sheet
liabilities section.
9.4 Other benefits for employees
Details are given below of other benefits for employees.
2015
Leaving incentives
2014
(13,920)
(17, 370)
Expenses f or luncheon vouchers
(2,333)
(2, 274)
Insurance expenses
(3,037)
(2, 905)
Expenses f or medical visits
-
(20)
Expenses f or attendance on personnel training courses
(978)
(795)
Expenses f or interna l communications a nd conventions
(1,105)
(857)
Other expenses
Tot al
(796)
(611)
(22,169)
(24,832)
The item “Other benefits for employees” consists mainly of expenses relating to the leaving
incentive plan amounting to €13.9 million.
Further details are given in ‘Human resources’ section of the Management Report.
186*
UBI Banca - Notes to the Financial Statements
9.5 Other administrative expenses: composition
Type of service/Amounts
2015
A. Other a dminist rative ex penses
2014
(203,707)
Rent payable
Professional and advisor y services
Rentals on ha rdwar e, software and other assets
Maintenance of hardware, softwar e a nd other assets
( 155,774)
( 7,584)
(7,197)
(28,583)
(23,907)
( 3,257)
(3,668)
(530)
(506)
Tenancy of premises
( 7,039)
(7,131)
Property and equipment maintenance
( 2,757)
(3,239)
Counting, transport and management of valuables
(8)
(10)
(47,489)
(3,613)
Inf or mation services and land registry sear ches
(511)
(773)
Books and periodicals
(415)
(349)
Postal
(587)
(1,459)
Insurance premi ums
( 4,267)
(4,110)
Advertising
( 4,285)
(3,249)
(973)
(699)
(10,386)
(11,047)
( 9,528)
(7,994)
Membership fees
Entertainment expenses
Telephone and data tra nsmission expenses
Outsourced ser vices
Travel expenses
( 3,395)
(3,419)
(62,075)
(62,094)
( 7,217)
(8,408)
Printing, stationery and consumables
(289)
(418)
Transport and r emovals
(259)
(311)
( 1,365)
(1,528)
(908)
(645)
(15,770)
(15,696)
(606)
(1,278)
( 7,262)
(6,844)
Instalments on services provided by Group companies
Cr edit recovery expenses
Security
Other expenses
B. Indirect taxes
- Indirect taxes and duties
- Stamp duty
- IMU/ICI (Municipal property taxes)
( 6,099)
(5,965)
- Other taxes
( 1,803)
(1,609)
(219,477)
( 171,470)
Total
The item ‘Membership fees’ includes the ordinary and extraordinary contributions to the National
Resolution Fund totalling €41.9 million.
Further details are given in the special section in the Management Report.
187*
UBI Banca - Notes to the Financial Statements
Section 10 Net provisions for risks and charges
- Item 160 10.1 Net provisions for risks and charges: composition
Provisions
Releases
Net provisions as at:
Provisions
Net provisions as
at:
Releases
2015
2014
Provision for revocation (clawback) risks
-
-
-
(500)
-
(500)
Staff costs
-
-
-
-
-
-
Provision for bonds in default
-
-
-
-
-
-
Net provisions for litigation
(4,127)
12,406
8,279
(1,327)
992
(335)
Provisions for risks and charges
(2,429)
1,105
(1,324)
(1,954)
2,478
524
Total
(6,556)
13,511
6,955
(3,781)
3,470
(311)
As already reported in section 12.1 of Part B of these notes, the releases include a former
Centrobanca provision amounting to €10 million relating to defence in legal proceedings where
the grounds for maintaining it no longer existed.
Section 11 Net impairment losses on property, plant and equipment
- Item 170 11.1 Net impairment losses on property, plant and equipment: composition
Assets/Income components
A. Property, plant and equipment
A.1 Owned
- for functional use
- For investment
A.2 Acquired through finance lease
- for functional use
- For investment
Total
Depreciation
(a)
Impairment
losses
(b)
Reversals of
impairment
losses
(c )
Net result
(a+b-c)
(19,595)
(4,624)
(14,971)
(496)
(496)
(1,363)
(70)
(1,293)
-
-
(20,091)
(1,363)
-
2014
(20,958)
(4,694)
(16,264)
(21,002)
(5,555)
(15,447)
(496)
(496)
(21,454)
(501)
(501)
(21,503)
Impairment losses on property, plant and equipment included impairment on properties
amounting to €1.363 million. See section 11.6 of Part B of these notes for further information.
Section 12 Net impairment losses on intangible assets
- Item 180 12.1 Net impairment losses on intangible assets: composition
No net impairment losses on intangible assets were recognised.
188*
UBI Banca - Notes to the Financial Statements
Section 13 Other operating income and expense - Item 190 13.1 Other operating expense: composition
2015
Other opera ting e xpenses
2014
(3,477)
(4,628)
Depr eciation of improvements to third par ty leased assets
(127)
(127)
Expenses f or secur itisation/covered bond oper ations
(444)
-
Social bond operation expenses
(277)
(500)
(2, 629)
(4,001)
Other expenses and pri or year expense
13.2 Other operating income: composition
2015
Other opera ting income
2014
121,067
Recover ies of taxes
Income for services to Group member companies
Charges to third parties for expenses on deposit and current accounts
Recover y of insurance pr emiums
Other income f or intragroup rents and property management
Rent income - other
Income from securitisation/covered bond operations
Other income, expense recoveries and prior yea r income
124,789
8, 630
7,855
65, 334
64,797
2
2
4, 866
5,140
31, 682
31,999
1, 546
1,457
-
616
9, 007
12,923
The item “Other income, expense recoveries and prior year income” comprises the following:
 recoveries of expenses for credit card business amounting to €2.9 million;
 receipt of expenses connected with the management of former B@nca 24-7 Spa financing
amounting to €474 thousand;
 recoveries on litigation proceedings amounting to €2.7 million;
 recovery of board members fees of €443 thousand;
 other prior year income of €2.5 million.
189*
UBI Banca - Notes to the Financial Statements
Section 14 Profits (losses) of equity investments - Item 210 14.1 Profits (losses) of equity investments: composition
Component of income /Amount s
2015
A. Inc ome
2014
1,598
1. Revaluations
2. Prof its on sale
3. Reversals of impair ment losses
4. Other income
B. Expense
1. Write-downs
2. Impairment l osses
136,393
-
-
289
135,380
-
-
1,309
1,013
(47)
( 1,258,519)
-
-
-
(1, 255,741)
3. Losses on sale
(10)
(2,081)
4. Other expense
(37)
(697)
1,551
( 1,122,126)
Net income
Item 4, “Other income”, includes the proceeds from the liquidation of the company Coralis Rent
Srl which took place in December 2015.
As already reported, impairment losses on Group equity investments were recognised in 2014
amounting to €1.256 billion, as well as profits and losses on the disposal of the investments in
UBI Assicurazioni Spa, Aviva Vita Spa and Aviva Assicurazioni Vita Spa.
As stated in Section A.2 of the notes to the financial statements the “Main balance sheet items”,
the value of equity investments is subject to systematic testing for impairment of the carrying
amount.
This impairment test consists of verifying that the carrying amount recognised for each single
investment was not greater than the higher of the value in use and the fair value after sales costs
(the recoverable amount).
The value used for impairment test purposes was the value in use for subsidiaries. The fair value
less cost to sell was not estimated for all the CGUs except for IW Bank, UBI Pramerica and UBI
Banca International, because there were no transactions for comparable companies in the latest
period. In the case of IW Bank and UBI Pramerica, the fair value less costs to sell was obtained
from multiples of comparable companies, while for UBI Banca it was obtained on the basis of a
prudent appraisal of the realisable value of the assets held by it.
The values in use for equity investments were those of the corresponding values of the cash
generating units (CGUs) to which the carrying amount of the equity investments held among the
assets of the specific legal entity subject to impairment testing were added. The dividend currently
being distributed was added to the amount obtained in this manner.
Consistency was maintained between the consolidated financial statements and the separate
financial statements in carrying out impairment tests on CGUs, although the impacts on the two
balance sheets may be different because of the different carrying amounts. Also in the
consolidated financial statements, impairment cannot exceed the equity of the assets subject to
impairment testing and that is it cannot write down the carrying amounts of assets outside the
field of application of IAS 36.
As a consequence of the above, the impairment tests performed as at 31.12.2015 found no reason
to recognise any impairment losses on the equity investments recognised in the balance sheet.
Details of the factors underlying the projections and the assumptions made are given in subsection 13.3 “Other information” in the assets section, which may be consulted.
190*
UBI Banca - Notes to the Financial Statements
Section 15 Net result of fair value changes in property, plant and equipment
and intangible assets – Item 220 –
No items of this type exist for the Bank.
Section 16 Net impairment losses on goodwill - Item 230 Goodwill was completely written-off in prior years.
Section 17 Profits (losses) on disposal of investments - Item 240 17.1 Profits (losses) on disposal of investments: composition
C omponent of income/Amounts
2015
A. Proper ties
- Profits on sale
- L osses on sal e
B. Other assets
2014
42
82
42
1 33
-
(51)
1
(21)
- Profits on sale
2
-
- L osses on sal e
(1)
(21)
43
61
Net income
191*
UBI Banca - Notes to the Financial Statements
Section 18 Taxes on profit for the year for continuing operations
- item 260 18.1 Taxes on profit for the year from continuing operations: composition
Income compo ne nts/Amo unts
2015
1. Current taxes (-)
2. Change in current taxes of prior years (+/-)
3. Reduction in current taxes for the year (+)
3. a Reduction in current taxes for the year for tax cred its pursuant to Law 21 4/2011 (+)
4. Change in deferred tax assets (+ /-)
5. Change in deferred tax liabili ties (+/-)
6. Ta xation for the year (-) (-1+/-2+ 3+3a+/-4+/-5)
2014
(4,69 9)
(6,0 59)
(27,46 1)
5,0 20
-
-
119,55 0
-
(109,23 9)
(9,6 70)
(24 5)
3,6 42
(22,094)
(7,067)
Current taxes amounted to €4.7 million and were composed of the IRES (corporate income tax)
and IRAP (local production tax) provisions for the year.
That amount was adjusted for items of tax income resulting from participation in the tax
consolidation by a total of €870 thousand and by €415 thousand resulting from write-downs of
AFS securities.
The decrease in prior year current taxation by €27.5 million consists of €25.7 million as a result
of a settlement agreement with the tax authorities relating to the most substantial items of Group
litigation and €1.8 million from adjustments to the prior year current taxation which resulted in
an increase in tax assets.
The reduction in current taxes, by €119.55 million is shown to highlight the transformation of
deferred tax assets resulting from the loss incurred by UBI Banca in 2014 into tax credits, as
requested by the “addendum” letter of 7th August 2012 issued by the Bank of Italy. This reduction
was fully offset by movements in tax assets because the transformation of deferred tax assets into
tax credits had no impact on the income statement, in compliance with the instructions in the
addendum letter cited and in Document No. 5 of 15th May 2012 issued as a result of co-ordination
between the Bank of Italy, Consob (Italian securities market authority) and Isvap (Italian
insurance authority”.
The remainder of the change in deferred tax assets amounting to €10.311 million consists of the
difference between the balance on increases and decreases shown in items 2.1 and 3.1 of table
13.3.
The change in deferred tax liabilities of €245 thousand consists of the balance on increases and
decreases reported in table 13.5 (items 2 and 3).
192*
UBI Banca - Notes to the Financial Statements
18.2 Reconciliation between theoretical taxation and actual taxation recorded in the
accounts
IRES (CORPORATE INCOM E TAX)
Taxabl e income
Theoretical IRES payabl e
145,518
IRES
%
(40,017)
27.50%
Permanent increases
- Non-deductible losses and impairment
1,326
(364)
0.25%
- Non-deductible interest expense
32,350
(8,896)
6.11%
- Non-deductible costs and other provisions, net
10,096
(2,776)
1.91%
4,713
(1,296)
0.89%
88
(24)
0.02%
1,217
(335)
0.23%
- I.M.U. (municipal property tax) and other non-deductible taxes
- Minus amounts non-deductible on disposal of equity investments
- Non-deductible auto expenses
- Non-deductible donations
307
(84)
0.06%
- Representative office expenses
566
(156)
0.11%
- Entertainment expenses
315
(87)
0.06%
- Non-business buildings
294
(81)
0.06%
- T ax litigation provision
-
(9,843)
6.76%
- T ax authority settlement provision
-
(25,628)
17.61%
(233,003)
64,076
-44.03%
(18,370)
5,052
-3.47%
- One-off 10% IRAP (local production tax) and labour expense deduc
(1,034)
284
-0.20%
- Other changes
(1,463)
402
-0.28%
(57,080)
(19,773)
13.59%
Permanent decreases
- Exempt dividends
- 2015 ACE (grow th law ) concession
Effective IRES payabl e
IRAP (REGIONAL PRODUCTION TAX)
Taxabl e income
Theoretical IRAP payabl e
IRAP
%
145,518
(8,105)
5.57%
Permanent increases
- Staff costs (item 150 a)
183,099
(10,199)
7.01%
- Impairment losses on AFS and unsecured guarantees (item 130 b a
15,847
(883)
0.61%
- Non-deductible interest expense
35,533
(1,979)
1.36%
- Recovery of taxation on operating income
17,989
(1,002)
0.69%
- Administrative expenses - 10% (item 150 b)
21,948
(1,222)
0.84%
- Depreciation and amortisation - 10% and non-operational (item 17
16,454
(917)
0.63%
- I.M.U. (MUNICIP AL P ROP ERT Y T AX)
5,243
(292)
0.20%
- Other changes
8,491
(472)
- Losses on disposals of operating investments (item 240)
1
-
0.32%
0.00%
Permanent decreases
- Untaxed dividends
(121,883)
6,789
-4.67%
- Income not taxed for IRAP purposes (item 190)
(117,590)
6,550
-4.50%
- T ax w edge
(160,474)
8,938
-6.14%
- P rovisions for risks and charges (item 160)
(6,955)
387
-0.27%
- P rofits on equity investments (item 210)
(1,551)
86
-0.06%
41,670
(2,321)
1.59%
145,518
(22,094)
15.18%
Effective IRAP payabl e
Total effective IRES and IRAP tax expense
193*
UBI Banca - Notes to the Financial Statements
Section 19
Post-tax profit (loss) from discontinued operations - Item 280
-
No profits or losses on groups of assets held for disposal were recognised.
Section 20
Other information
There is no further information of significance.
Section 21 Earnings per share
21.1 The average number of ordinary shares with diluted share capital
International accounting standards (IAS 33) specify a precise method for calculating earnings per
share (EPS) with two formulas: basic earnings and diluted earnings per share.
Basic EPS has been calculated by dividing the profit attributable to ordinary equity holders of the
Parent by the weighted average number of ordinary outstanding shares during the year.
21.2 Other information
The relative figures for basic and diluted EPS for the separate UBI Banca accounts are given
below, while greater details of the methods of calculation and figures for the Group are given in
the relative section of the consolidated financial statements.
2015
Basic EPS
Diluted EPS
2014
Profit "attr ibutable"
(thousands of euro)
Weighted average
ordinar y shares
Earnings per
share
Profit "attributable"
(thousands of euro)
Weighted average
ordinary shares
Earnings per
share
119,324
119,324
900, 287,051
900, 287,051
0. 1325
0. 1325
-917, 775
-917, 775
900,157,867
900,157,867
-1.0196
-1.0196
194*
UBI Banca - Notes to the Financial Statements
Part D – Comprehensive income
Detailed statement of comprehensive income
31.12.2015
Items
10.
Gross amount
Tax on income
X
X
Profit (loss) for the yea r
Net amount
123,423
Other compre hensive income without t ransfer to the inco me
stateme nt
20.
Pr op erty, plant and equipment
30.
Intangible assets
40.
Def ined benef it plans
50.
Non-current assets held f or sal e.
60.
Shares of valuation reserves of equity accounted investees
1, 780
(489)
1,291
Other compre hensive income with tr ansfer t o t he income
stateme nt
70.
Hedging fore ign inv est ment s:
a) changes in fair value
b) transfer to the income statement
c) other changes
80.
Curre ncy tra nslat ion differences:
a) changes in val ue
b) transfer to the income statement
c) other changes
90.
Cash flow hedges
a) changes in fair value
(1 02)
-
(102)
b) transfer to the income statement
c) other changes
100. Ava ila ble-for-sale financial asse ts:
a) changes in fair value
325, 422
(104, 296)
221,126
b) transfer to the income statement
- impairment losses
- profits and losses from sal e
133
(44)
(1 15,7 68)
32,80 2
211,465
(72,027)
89
(82 ,966)
c) other changes
110. Non-current a ssets held for sale:
a) changes in fair value
b) transfer to the income statement
c) other changes
120. Sha res of va lua tion reserves of equity accounted inve ste es:
a) changes in fair value
b) transfer to the income statement
- impairment losses
- profits and losses from sal e
c) other changes
130. Tot al other compr ehensive inco me items
140. Comprehensive income (item 10 + 130)
139,438
262,861
195*
UBI Banca - Notes to the Financial Statements
Details are given below of the main changes in fair value and of recognition through profit and
loss (impairment losses):
a) Changes in fair value
Government securities
Other debt instruments
Other certificates
Gross
change in
reserve
305,397
-256
20,281
325,422
tax
-100,995
85
-3,386
-104,296
Net
change in
reserve
204,402
-171
16,895
221,126
The change in the reserve for government securities and debt instruments is determined by the
credit risk component inherent in the market price of securities, while the interest rate risk
component for hedged securities is recognised in the income statement within item 90 – “Net
hedging income”.
b) transfer to the income statement (impairment losses)
Banca Popolare dell'Etruria
Idea Eff Energ SV So
Fondo Ital. Inv-Port
Other
Gross
change in
reserve
504
412
-471
-312
133
tax
-167
-136
156
103
-44
Net
change in
reserve
337
276
-315
-209
89
c) transfer to the income statement (profit and loss on the disposal)
BTP-01MG31 6%
BTP-010818 4,5%
ITALY 21 TV CMS
BTP-01AG16 3,75%
BTP-01DC18 3,50%
BTP-15NV16 2,75%
BTP-01MG19 2,50%
BTP 01 AG 19 1,5%
UNICRDIT INT 09/P RC
ICBPI - Ist.Centrale Banche Popolari Italiane
OTHER CERTIFICATES
Gross
change in
reserve
39,327
-1,145
-14,805
-25,880
-55,947
-21,312
-9,302
-3,380
-2,498
-21,410
584
-115,768
196*
tax
-13,005
379
4,896
8,558
18,502
7,048
3,076
1,118
826
1,598
-194
32,802
Net
change in
reserve
26,322
-766
-9,909
-17,322
-37,445
-14,264
-6,226
-2,262
-1,672
-19,812
390
-82,966
UBI Banca - Notes to the Financial Statements
Part E - Information on risks and the relative hedging policies
Introduction
In compliance with current regulations, the UBI Group has adopted a risk control system which
disciplines and integrates the organisational, regulatory and methodological guidelines of the
system of internal controls with which all Group member companies must comply in order to
allow the Parent to perform its activities of strategic, management and operational control in an
effective and economical manner.
The Bank works pro-actively to identify the risks to which it is subject and to define the relative
criteria for measuring, managing and monitoring them.
The key principles on which Group risk analysis and management are based for the pursuit of an
increasingly more knowledgeable and efficient allocation of economic and regulatory capital are as
follows:
rigorous containment of financial and credit risks and strong management of all types of
risk;
the use of a sustainable value creation approach to the definition of risk appetite and the
allocation of capital;
definition of the Group’s risk appetite with reference to specific types of risk and/or specific
activities in a set of policy regulations for the Group and for the single entities within it.
This part furnishes information on the risk profiles listed below, on the relative management and
hedging policies pursued by the Bank and its activities relating to financial derivative
instruments:
a)
credit risk;
b)
market risks:
- interest rates,
- price;
- currency;
c)
liquidity risk;
d)
operational risks.
A report on the general framework of the risks and uncertainties to which the Bank is exposed is
given in a special section of the Management Report, prepared in compliance with Legislative
Decree No. 32 of 2nd February 2007, which implements EC Directive No. 2003/51/EC.
Section 1 Credit risk
Qualitative information
1. General aspects
The strategies, policies and instruments for the assumption and management of credit risk are
defined at the Parent by the Chief Risk Officer in co-operation with the Chief Lending Officer, with
the support and co-ordination of the relative specialist units.
There is a particular focus in the formulation of policies to manage credit risk on maintaining an
appropriate risk-yield profile and on assuming risks that are consistent with the risk appetite
defined by senior management and, more generally, with the mission of the UBI Group.
197*
UBI Banca - Notes to the Financial Statements
The priorities in the orientation of the Group's credit management policies are to support local
economies, families, businessmen, professionals and small to medium-sized enterprises.
The particular attention paid to maintaining relationships established with customers and to
developing them over the years is one of the strong points of the Group and it helps to eliminate
information asymmetries and offers continuity in customer relationships with a view to long term
support.
Even in the continuing and difficult current economic situation, the Bank is ensuring that the
economy has adequate access to credit by participating, amongst other things, in “Agreements”
stipulated between the Italian Banking Association, the Ministry of Finance and trade
associations, while preserving the quality of its assets and by employing an extremely selective
approach to “non-core” exposures.
With regard to “business” customers in particular, lending rules have been formulated and are
being followed for the grant and management of loans, which in operational terms translate into
action which ranges from the development to the containment of exposures. These rules are based
on a number of drivers as follows:
 internal counterparty rating (average weighted rating for Groups of companies), linked to the
degree of protection provided by any accessory guarantees there may be;
 degree of engagement of the UBI Group with the counterparty or Group of companies;
 the economic sector to which the counterparty or Group of companies belongs with a view to:
 the level of sector risk;
 the overall level of concentration of the UBI Group in the individual economic sector (with
verification also of the concentration at individual bank or company level).
Finally, particular attention is paid to the definition of guidelines for the treatment of new
products, with adequate reporting to senior management concerning observance of risk-yield
objectives, the calculation of minimum interest rates for granting loans, the quality of borrowers,
guarantees received and expected rates of recovery in cases of insolvency.
2. Policies for the management of credit risk
2.1 Organisational aspects
In the performance of its traditional banking business, the Bank is exposed to the risk that the
loans it grants will not be repaid by borrowers when they are due and that they must be partially
or fully written down. More specifically the risk profile for lending is sensitive to the performance
of the economy as a whole, to the deterioration in the financial position of counterparties
(shortage of liquidity, insolvency, etc.), or to changes in their competitiveness, to structural or
technological changes in corporate debtors and to other external factors (e.g. changes in
legislation, deterioration in the value of financial guarantees and mortgages connected with
market performance). A further risk factor to which particular attention is paid is the degree of
diversification in the lending portfolio among different borrowers and among the different sectors
in which they operate.
The organisational model on which the units which manage lending activity is based is as follows:

Parent units for centralised monitoring and co-ordination;

the General Managements of banks and Group companies, to which the following report:
Credit Departments;
Local Credit Centres;
Branches;
“Private & Corporate Unity” units.
198*
UBI Banca - Notes to the Financial Statements
As a whole the characteristics of that organisational model ensure strong standardisation between
the units of the Parent and the corresponding units in the network banks, with consequent
linearity in the processes and the optimisation of information flows. Loan granting activity is also
differentiated, at local level, by customer segment (retail/private banking/corporate and
institutional) and specialised by the status of the loan: “performing” (managed by retail, private
banking and corporate lending units) and “in default” (managed by problem loan units).
Moreover, with regard to banks, the introduction of decentralised Local Credit Units to support
retail branches and corporate banking and private banking units, ensures effective co-ordination
and liaison between units operating on their respective markets. The Parent oversees policy
management, overall portfolio monitoring, the refinement of assessment systems, problem loan
management and compliance with regulations through the units that report to the Chief Lending
Officer, Credit Risk Management, Strategic Planning and the Audit Function of the Parent and the
Group.
For all those entities (individual companies or groups) with authorised credit from banks and
companies in the Group (including risk activities involving issuer and related risks), which totals
more than €50 million (€35 million for single entities or groups of companies classified as “highrisk”), the Parent must set an operational limit which is the maximum credit that may be
authorised for the counterparty at UBI Group level.
The banks and companies of the Group must also request a prior, consultative, non-binding
opinion from the Parent for combinations of a) amounts of authorised credit and b) determined
internal rating classes.
The various organisational units in banks and product companies are responsible for credit and
commercial activities and they also hold responsibility for monitoring both the activity they
perform directly and that performed by those units which report to them. More specifically,
responsibility for managing and monitoring performing loans lies in the first instance with the
account managers who handle daily relationships with customers and who have an immediate
perception of any deterioration in credit quality. Nevertheless, all employees of Group member
companies are required to promptly report all information that might allow difficulties to be
identified at an early stage or which might recommend different ways of managing accounts, by
concretely participating in the monitoring process.
In the second instance, the organisational unit responsible for monitoring credit risk is the Credit
Quality Management and Monitoring Unit, which carries out monitoring, supervision and analysis
of performing positions on both a case by case and a collective basis, where the intensity and
degree of detail of the analysis is a function of the risk class attributed to the counterparties and
the seriousness of the performance problems. It is assisted by Local Credit Units. This unit, not
involved in loan approval procedures, either on its own initiative or on submission of a proposal,
may assess a position and decide (or propose to a superior decision-making unit when the
decision does not lie within its powers), to change the classification of performing counterparties
to a more serious status. In these cases it asks the UBI Banca Credit Area – Credit Service Italy,
to issue a prior non-binding opinion in cases where Credit Authorisation Regulations require it.
The UBI Banca Credit Policies and Quality Service is responsible for co-ordinating and defining
guidelines for monitoring the lending portfolio, overseeing the development of monitoring tools,
monitoring credit policies and preparing management reports.
Management of the “bad loan” (previously termed “non-performing”) positions of all the UBI
Group’s network banks is entrusted to the Problem Loan and Credit Recovery Area of UBI Banca,
within the unit relating to the Chief Lending Officer.
199*
UBI Banca - Notes to the Financial Statements
This unit has undergone substantial organisational change in recent years, as part of the
implementation of the new model for the management of bad loans (previously termed “nonperforming loans”), designed to improve credit recovery processes, by means of the following:
–
the introduction of segmentation approaches and division into portfolios of bad loans, on
the basis of the size and complexity of the loan;
–
the specialisation of recovery processes and the units responsible for it, consistent with the
segments and portfolios identified;
–
monitoring of processes for the management of positions;
–
the assignment of recovery objectives to managers and assessment of results;
–
the introduction of strategies designed to optimise recovery on specific portfolios, such as for
example, recourse to property operators to value the properties which back mortgage loans.
As part of that initiative, three specialist services on specific segments have been created within
the above mentioned areas:
–
Small Sum Recovery Service, to manage bad unsecured loans to private individuals for
amounts of less than €25,000;
–
Large Loan Recovery Service, specialising in the management of bad loans to both private
individuals and businesses for amounts of over €1 million, or with a net book value of over
€500,000. Particularly complex types of position are also managed by this service (e.g. pool
financing, etc.);
–
Private Individual and Corporate Recovery Service, for the management of other types of
loan which are not included within the scope of the two services just mentioned. This unit is
organised into six specialist functions according to geographical criteria.
Furthermore, the management of counterparties being restructured or classified as “unlikely to
pay” restructured loans of the network banks, UBI Banca and UBI Leasing Spa was centralised in
the Problem Loans and Credit Recovery Area of the Parent in 2014.
2.2 Management, measurement and control systems
The Credit Risk Management Area of the Parent is responsible for the Bank’s reporting on credit
risk in order to monitor changes in the risk attached to lending. The reports – submitted to the
Management Board of the Bank each quarter – illustrate the distributions by regulatory portfolio
of internal rating classes and risk parameters. They also show changes in average risk for the loan
portfolio, with a focus on the Corporate Market (Core and Large portfolio) and the Retail Market
(Business and Individuals portfolio). They describe default rates for loans and contain a section on
the quarterly monitoring of concentration and credit quality policies.
The set of models which constitute the Group’s internal rating system is managed by the area that
reports to the Risk Management Officer with the support of the Credit Area.
The system at present involves the use of automatic models for medium to large-size businesses,
private individuals and small-sized businesses.
Ratings are calculated using a counterparty approach and they are normally reviewed and
updated once a year. For the “exposures to corporates” supervisory portfolio, the PD models
developed by the UBI Group provide an overall assessment of counterparty risk through a
combination of a quantitative and a qualitative component. The quantitative component is
developed and processed statistically: the technique selected is that of logistic regression,
normally used to assess cases where the dependent variable (target) is dichotomous, either default
or performing. The qualitative component of the rating model is based on information acquired by
200*
UBI Banca - Notes to the Financial Statements
the account manager or a central unit20 of UBI Banca for large corporate positions and it meets
the need to incorporate qualitative factors and information on the client in ratings which
accompanies and completes the quantitative analyses, in order to detect trends and assess
creditworthiness more accurately.
The same considerations described above apply to retail exposure classes (for retail businesses
and private individuals) except that the qualitative component is not considered. The quantitative
component for monitoring and granting loans assesses the credit rating for small-size companies,
by integrating it with geo-sectoral, economic and financial, and internal and external performance
type assessments. The quantitative opponent for monitoring mortgages to private individuals
assesses the credit rating by integrating it with information on personal details and external and
internal performance. The quantitative component for granting mortgages to private individuals
assesses counterparty risk by integrating it with information on personal details and on the
product.
The output of the models consists of nine rating classes that correspond to the relative PDs,
updated comprising default positions up to December 2014.
The determining parameters for LGD are as follows: 1) Bad Loan (previously termed “nonperforming”) LGD 2) Downturn LGD 3) Danger Rate.
1)
Bad Loan LGD is calculated as the one’s complement of the ratio of the net recoveries
observed during the life of a bad loan position and exposure when the classification as bad loan
occurs inclusive of the principal reclassified and the interest that has been capitalised. In
accordance with the definition of economic LGD given in supervisory regulations, credit recoveries
are discounted to present values at a risk-adjusted rate, which reflects the time value of money
and a risk premium calculated on the basis of the volatility of credit recoveries observed compared
to a preset market benchmark.
2)
The approach adopted for the Downturn LGD was designed to take account of adverse
economic conditions for recovery expectations, based on the identification of a period of recession
on the basis of the current economic scenario and incorporating historical and prospective
macroeconomic trends.
3)
The Danger Rate parameter is used to correct the LGD estimated on bad loans only, by
considering the following factors: 1) the composition of defaulted loans, because not all new
expected defaults are bad loan positions that come directly from the performing category; 2)
migration between default categories, because not all defaults that are not in the bad loan
category arrive at the most serious and loss-incurring bad loan status; 3) change in the exposure
because the exposure may change over time for defaulted positions which migrate to the bad loan
category.
Credit processes within the network banks work with information channelled from the rating
system as described in detail below.
The operational units involved in the loan disbursement and renewal process use internal credit
ratings, which constitute necessary and essential evaluation factors for credit authorisations
when these are assessed and revised. Powers to authorise loans are based on the risk profiles of
the customers or the transactions as given by the credit rating and by the expected loss, while
20
This solution was adopted in order to ensure centralised management by specialists in the assessment of large
corporate positions in conformity with internal Group assessments.
201*
UBI Banca - Notes to the Financial Statements
they are managed using Pratica Elettronica di Fido (electronic credit authorisation) software. The
credit ratings are used, amongst other things, to monitor loans both by the management reporting
system and in the information made available to units in banks involved in the lending process.
The assignment to rating classes that are different from those calculated by the internal rating
system on the basis of the models adopted is made by proposing an override on the rating. These
changes are made on the basis of information not already considered by the rating model, not
adequately weighted by the model or where it is intended to anticipate the future influence of the
information.
For the process of calculating collective impairment losses on loans – consistent with decisions
taken by the Parent – a method based on internal ratings and internal estimates of loss given
default (LGD) is used.
Activity also continues constantly to revise, update and adopt policies and regulations for credit
risk management.
Existing policies are listed below together with the principal contents.
–
Credit Risk Management Policy, which unifies regulations for the management of different
types of credit risk in a single document, which were previously contained in separate policies.
This policy sets regulations for the following:
ordinary customers, for which, regulations, principles and limits to manage credit risk are
set on the basis of the availability of internal ratings. The definition of the limits is based on a
series of indicators expressed in terms of: capital allocation, values for maximum risk (i.e. target
and maximum expected loss), limits on risk-taking in terms of the distribution of exposures by
credit rating class and the management of credit quality;
institutional and ordinary counterparties resident in countries at risk for which the risk
management policy, the relative regulations to implement it and the documents setting limits lay
down rules and principles for managing credit granted to resident and non-resident institutional
customers and also to ordinary customers in countries at risk. As with ordinary customers, the
definition of the limits is based on a series of indicators expressed in terms of: capital allocation,
limits on the assumption of risks in terms of the distribution of exposures by credit rating class
and countries and the management of credit quality;
single name concentration risk, which sets maximum exposure limits on single
counterparties in order to limit risks of instability that would arise from high rates of
concentration for loans to major borrowers if one of these should default;
-
–
policy for the distribution of mortgage loans through brokers, which regulates the
procedures for the use of external distribution networks for granting mortgages to non-captive
customers in order to contain potential credit, operational and reputational risks;
–
policy on the portability, renegotiation, substitution and early repayment of the mortgages of
direct customers of the network banks, which provides UBI Group guidelines for the portability (in
both directions), the renegotiation, the substitution and early repayment (partial or total) of
mortgages. It is designed with a view to minimising the times required, the conditions and the
related costs (by setting minimum service standards, amongst other things) and also to equipping
the Group with appropriate processes and instruments to manage the relative risks (credit,
operational and reputational);
–
policy on the portability, renegotiation, substitution and early repayment of mortgages
granted through brokers, which relates to mortgages granted on the basis of standing
arrangements between the companies and banks in the Group and specific distribution networks;
202*
UBI Banca - Notes to the Financial Statements
–
policy on risks resulting from securitisations, which sets guidelines for the Group to manage
risks resulting from securitisations;
–
policy on residual risk, which defines strategic orientations relating to the management of
“residual risk”, defining the process of control over the acquisition and use of techniques to
reduce credit risk in order to mitigate the risk in question;
–
policy on internal controls to manage risk assets and conflicts of interest with regard to
associate companies, which implements Bank of Italy recommendations. The policy defines
guidelines and criteria for the adoption by the Group as a whole and by individual Group banks
and companies of appropriate organisational structures, internal control systems and specific
internal policies to manage that risk within two areas defined by the regulations: prudential limits
and approval procedures.
–
policy to manage equity risk, which defines appropriate management controls designed to:
contain the risk of locking up too much liquidity as a result of making equity investments in
financial and non-financial companies and, with specific reference to non-financial companies,
promote risk and conflicting interest management that complies with the criterion of sound and
prudent management.
2.3 Techniques for mitigating credit risk
The Bank employs standard risk mitigation techniques used in the banking sector by acquiring
security such as properties and financial instruments as well as personal guarantees from
counterparties for some types of loan. Determination of the total amount of credit that can be
granted to a given customer and/or group of companies to which the customer belongs takes
account of special criteria for assigning weightings to the different categories of risk and to
guarantees. Prudent "haircuts" are applied to the estimated value of collateral depending on the
type of security.
The main types of security accepted by the Group are as follows:
real estate mortgage
pledge.
In order to ensure that general and specific requirements are met for recognition of collateral, as
part of its credit risk mitigation techniques (CRM) in accordance with supervisory regulations, for
prudent purposes the UBI Group has performed the following:
redefined credit processes relating to the acquisition and management of collateral. With
particular regard to mortgages, in network banks it is compulsory to enter all data on a property
needed to render collateral eligible in account manager software systems. Particular attention was
paid to the compulsory nature of expert appraisals and to the prompt recovery of the relative
information, including notarial information (details of registrations), essential for guarantees to be
accepted;
acquired, for existing mortgages, all the information required to ensure that they are
admissible, in line with the provisions of Basel 2 in terms of specific requirements.
2.4 Non-performing (previously termed “deteriorated”) financial assets
The classification of the problem loan portfolio complies with regulations and legislation and can
be summarised as follows:
•
loans past due and/or continuously in arrears;
•
“unlikely to pay” loans
203*
UBI Banca - Notes to the Financial Statements
•
bad loans (previously termed “non-performing loans”).
This classification was revised at the beginning of 2015 in line with supervisory provisions.
In addition to those classes, there remains a type of problem loan in respect of “country risk” for
unsecured exposures to institutional and ordinary customers belonging to countries considered
as “at risk” as defined by the supervisory authority.
Exposures previously classified as “impaired” and “restructured” are now comprised within the
“unlikely to pay” class. These subdivisions nevertheless remain for management purposes.
With regard to unlikely to pay exposures (formerly “impaired”), in order to optimise management
and solely for operational purposes, these are divided into positions for which it is considered that
the temporary situation of objective difficulty can be overcome in a very short period of time and
the remaining positions, for which it is felt best to disengage from the account with credit recovery
out of court over a longer period of time. Additionally, loans past due and/or continuously in
arrears are subject to controls to decide, within a maximum operational period of 180 days,
whether to reclassify them as either “performing” or into another problem loan class.
The management of problem loans is performed on the basis of the level of risk and it is
performed by the relative units responsible for management of the Bank’s problem loans with
regard to “loans past due and/or continuously in arrears” and to “unlikely to pay” loans (formerly
“impaired”). The management of the “bad loan” (previously termed “non-performing”) positions
and positions that are “restructured/undergoing restructuring” is by the Parent.
Assessment of the appropriateness of impairment losses recognised is performed on a case by
case basis for individual positions to ensure adequate levels of cover for expected losses.
The analysis of non-performing (previously termed “deteriorated”) exposures is performed
continuously by the single operational units which manage risks and by the Parent.
The resolution of difficulties by counterparties is a determining factor for the return of positions to
“performing” status. This event occurs principally and above all for accounts which are past due
and/or continuously in arrears and for “unlikely to pay” (formerly “impaired”) accounts.
204*
UBI Banca - Notes to the Financial Statements
Quantitative information
A. Credit Quality
A.1 Non-performing (previously termed “deteriorated”) and performing
credit exposures: amounts, impairment losses, changes, economic and
geographical distribution
A.1.1 Distribution of credit exposures by portfolio and by credit quality (carrying amounts)
Bad loa ns
(previously termed
"non-per forming")
Portfolios/quality
1. Availa ble-f or -sale financial assets
Non-per forming
(previously ter med
Perfor ming past Perfor ming asse ts
"deteriorated")
due exposures
past-due
exposures
17,576
15,154,275
Unlikely to pa y
loans
-
Total
15,171,851
2. Held-to-matur ity investments
-
-
-
-
3,494,547
3,494,547
3. Loans and advances to banks
-
-
-
2, 255
15,486,960
15,489,215
4. Loans and advances to customers
319,461
871,702
23,671
1,410, 269
19,276,287
21,901,390
5. Financial assets designated at fair val ue
-
-
-
-
-
-
6. Financial assets held for sale
-
-
-
-
-
-
Tota l 31.12.2015
319,461
889,278
23,671
1,412,524
53,412,069
56,057,003
Tota l 31.12.2014
318,097
932,328
30,895
1,014,882
56,487,371
58,783,573
As at 31st December 2015 forborne exposures amounted to approximately €616 million (of which
€392 million non-performing – previously termed “deteriorated” – and €224 million performing) and
they related to “Loans and advances to customers” and “available-for-sale financial assets”. See table
A.1.6 for further details.
The following table shows the composition by maturity of past due performing exposures:
Fo r b o rn e e x p o s u r e s
P o rt f o lio s / Cre dit q ua lit y
To t a l
P a st due
P a st due
unde r 3
mo nt hs
1. Loa ns a nd a dva nc e s t o ba nks
2. Loa ns a nd a dva nc e s t o c ust ome r s
To t a l
3 1. 12 . 2 0 15
Ot h e r e x p o s u r e s
P a st due
P a st due
P a st due
P a st due
P a st due
f ro m 3 t o 6
f ro m 6 t o
over 1
unde r 3
f ro m 3 t o 6
f r o m 6 t o 12
mo nt hs
12 m o n t h s
year
mo nt hs
mo nt hs
mo nt hs
31,244
3 1, 2 4 4
8,894
8,894
-
-
6,908
6,908
-
205*
2,255
1,312,313
1, 3 14 , 5 6 8
37,730
37,730
over 1 year
13,180
13 , 18 0
( ne t
e x po s ure )
P a st due
-
-
2,255
-
1, 4 10 , 2 6 9
1, 4 12 , 5 2 4
UBI Banca - Notes to the Financial Statements
A.1.2 Distribution of credit exposures by portfolio and by credit quality (gross and net
amounts)
Non-perfor ming (previously ter med "deteriorated")
asse ts
Portfolios/Quality
Gross exposur e
1. Availa ble-f or -sale financial assets
Specific
impair ment
losses
Net exposure
Per forming assets
Gross exposure
Portfolio
impairment
losses
17,576
-
17,576
2. Held-to-matur ity investments
-
-
-
3,494, 547
-
3,494, 547
3,494,547
3. Loans and advances to banks
-
-
-
15,489,215
-
15,489,215
15,489,215
20,734,329
(47,773)
20,686,556
21,901,390
4. Loans and advances to customers
15,154,275
Tot al
( net
exposure)
Net exposure
1,838,363
(623,529)
1,214,834
5. Financial assets designated at fair val ue
-
-
-
6. Financial assets held for sale
Tot al 31.12.2015
-
-
-
-
1,855,939
(623,529)
1,232,410
Tot al 31.12.2014
1,939,999
(658,679)
1,281,320
-
X
15,154,275
X
15,171,851
-
-
-
-
-
54,872,366
(47,773)
54,824,593
56,057,003
57,587,142
(84,889)
57,502,253
58,783,573
Details of write-offs performed during the year on the various portfolios of non-performing (previously
termed “deteriorated”) assets are given in table A.1.7.
Port folios/Quality
Other assets
Assets with markedly poor credit quality
Accumulat ed losse s
1. Financial assets held for trading
2. Hedging derivatives
Tot al 31.12.2015
Net exposure
N et ex posur e
(23)
239
-
-
1, 082,587
592,409
(23)
239
1,674,996
Non-performing (previously termed “deteriorated”) financial assets held for trading relate principally
to the debt security Cogemeset 09/14 Step Coupon, amounting to €100 thousand, while the
remaining part relates to positions in derivatives classified as of poor credit quality in relation to the
status of the financing with the main counterparties in question.
206*
UBI Banca - Notes to the Financial Statements
A.1.3 On- and off-balance sheet exposures to banks: gross and net amounts and by time
past due
Gross exposur e
Specific impairment
losses
N on-performing (previously termed "deteriorated") assets
Type of exposur e/amounts
Up t o 3 months
3 months to 6
months
6 months to
1 year
Performing
a ssets
More t han 1
ye ar
Portfolio
impairment losses
Net exposure
A. On-bala nce sheet exposure
a) B ad loans (previously termed "nonperforming")
-
-
-
-
X
-
X
-
of which: forb orne exposures
-
-
-
-
X
-
X
-
b) Unlikely to pay loans
-
-
-
-
X
-
X
-
-
-
-
-
X
-
X
-
-
-
-
-
X
-
X
-
-
-
-
-
X
-
X
of which: forb orne exposures
c) Exposure past due non-performing
(pr eviously termed "deteriorated")
of which: forb orne exposures
d) Performing past due exposures
X
X
X
X
of which: forb orne exposures
X
X
X
e) Other performing exposures
X
X
X
X
of which: forb orne exposures
Total A
X
X
2, 255
X
-
X
-
X
-
X
15,749, 450
X
-
X
X
-
-
-
-
a) N on-performing (previously termed
"deteriorated")
1
-
-
-
b) Performing
X
X
X
X
15,751,705
2,255
-
-
15,749,450
-
-
-
15,751,705
(61)
13,930,414
B. Off-b alance sheet e xposures
X
(1)
13,930, 475
X
X
-
Total B
1
-
-
-
13,930,475
(1)
( 61)
13,930,414
Total A+B
1
-
-
-
29,682,180
(1)
( 61)
29,682,119
No forborne exposures to banks existed to report.
A.1.4 On-balance sheet credit exposures to banks: changes in gross non-performing
(previously termed “deteriorated”) exposures
Descr iption/ categor ies
Bad loans
(previously termed
"non-performing")
U nlikely to pay
loans
-
-
A. Initial gross exposure
- of which: exposur es transferred not derecognised
Non-performing
(previously termed
"deteriorated") pastdue exposures
-
-
-
-
B. Inc reases
15,015
-
-
B.1 transfers from performing exposures
-
15,015
-
B.2 transfers from other categories of impaired exposures
-
-
-
B.3 other increases
-
-
-
( 15,015)
-
-
-
-
-
C. Decreases
C.1 transfers to performing exposures
C.2 wr ite-offs
(15,015)
-
-
C.3 payments received
-
-
-
C.4 from disposals
-
-
-
C.5 losses on the disposal
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
C.6 transfers to other cla sses of non-perf orming (previously termed
"deteriorated") exposur e
C.7 other decreases
D. Final gross ex posure
- of which: exposur es transferred not derecognised
Write-offs regarded the subordinated bonds BCA MARCHE 05/15 TV amounting to €5 million and
BCA POP. ETRURIA 06/16 amounting to €10 million.
207*
UBI Banca - Notes to the Financial Statements
A.1.4.bis On-balance sheet credit exposures to banks: changes in gross forborne exposures
by credit quality
No on-balance sheet forborne credit exposures to banks to report.
A.1.5 Non-performing (previously termed “deteriorated”) on-balance sheet credit exposures
to banks: changes in total impairment losses
Descr iption/ categor ies
Bad loa ns
(previously termed
"non-per formi ng")
Unlikely t o pay loans
Non-perfor ming (previously
termed "deteriorated") pastdue exposures
-
-
-
-
-
-
( 15,015)
-
-
A. Tota l initial ne t impairment
- of which: exposur es transferred not derecognised
B. Inc reases
B. 1 impair ment losses
(15,015)
-
-
-
-
-
-
-
-
-
-
-
15,015
-
-
C. 1 unreali sed reversals of impa irment losses
-
-
-
C. 2 realised reversals of impairment losses
-
-
-
C. 3 profits on the disposal
-
-
-
15,015
-
-
-
-
-
-
-
-
-
-
-
-
-
-
B. 2 losses on the disposa l
B. 3 transf ers f rom other classes of non-performing (previousl y
termed "deteriora ted")exposures
B. 4 other increases
C. Decreases
C. 4 write-offs
C. 2 transf ers to other categories of non-perf orming (previously
termed "deteriora ted") exposures
C. 6 other d ecreases
D. Total clo sing net impairment
- of which: exposur es transferred not derecognised
208*
UBI Banca - Notes to the Financial Statements
A.1.6 On- and off-balance sheet exposures to customers: gross and net amounts and by time
past due
Gross exposur e
Type of exposur e/amounts
N on-performing (previously termed "deteriorated") assets
Performing
a ssets
More t han 1
ye ar
Specific impairment
losses
Portfolio
impairment losses
Net exposure
Up t o 3 months
3 months to 6
months
6 months to
1 year
343
420
767
704, 487
X
(386,556)
X
-
224
452
18, 945
X
(9,317)
X
10,304
262,969
80,232
75,063
706, 652
X
(235,638)
X
889,278
192,747
62,711
40,642
183, 038
X
(101,880)
X
377,258
90
14,987
8,817
1, 111
X
(1,335)
X
23,670
8
502
3,315
418
X
(212)
X
A. On-bala nce sheet exposure
a) B ad loans (previously termed "nonperforming")
of which: forb orne exposures
b) Unlikely to pay loans
of which: forb orne exposures
c) Exposure past due non-performing
(pr eviously termed "deteriorated")
of which: forb orne exposures
d) Performing past due exposures
X
X
X
X
of which: forb orne exposures
X
X
X
e) Other performing exposures
X
X
X
of which: forb orne exposures
Total A
319,461
4,031
1,419, 253
X
X
47, 948
X
(902)
47,046
X
38,167, 008
X
(38,890)
38,128,118
179, 627
X
X
X
X
263,402
95,639
84,647
X
12,552
-
-
-
X
X
X
1,412,250
39,586,261
(8,883)
(623,529)
1,410,370
(2,298)
177,329
( 47,773)
40,770,897
(20,207)
3,840,306
B. Off-b alance sheet e xposures
a) N on-performing (previously termed
"deteriorated")
b) Performing
X
X
3,860, 513
(1,478)
X
X
11,074
Total B
12,552
-
-
-
3,860,513
(1,478)
( 20,207)
3,851,380
Total A+B
275,954
95,639
84,647
1,412,250
43,446,774
(625,007)
( 67,980)
44,622,277
The past due range “up to 3 months” contains 575 customer relationships (including the bond
Sorgenia Spa One Coupon conv. cat. A) with gross exposure of €145.9 million (net exposure of €115.3
million) that are forborne non-performing (previously termed “deteriorated”), but not past due in the
“cure period”.
209*
UBI Banca - Notes to the Financial Statements
A.1.7 On-balance sheet credit exposures to customers: changes in gross non-performing
(previously termed “deteriorated”) exposures
Bad loans
(pr eviously
termed "nonperf orming")
Description/categ ories
A. Initial gross exposure
- of which: exposur es transferred not derecognised
B. Inc reases
B. 1 transf ers f rom perf orming exposures
B. 2 transf ers f rom other categories of non-performing
(previously termed "deteri ora ted" exposures)
B. 3 Other increases
C. Decreases
C. 1 transf ers to performing exposur es
Non-performing
Unlikely t o pay (previously termed
loans
"deteriorated") pastdue exposures
732,896
1,174,934
32,423
-
-
-
188,624
315,880
58,915
8,759
194,720
57, 368
164,199
58,525
25
15,666
62,635
1, 522
(215,503)
( 365,898)
(66,332)
(351)
(55,805)
(5, 067)
(143,737)
(41,898)
-
C. 3 payments received
(45,337)
(80,347)
(2, 536)
C. 4 f rom disposals
(17,725)
-
-
(8,116)
-
-
(237)
(163,783)
(58, 729)
-
(24,065)
-
706,017
1,124,916
25,006
-
-
-
C. 2 write-offs
C. 5 losses on the disposa l
C. 6 transf ers to other classes of non-performing (previously
termed "deteriora ted") exposure
C.7 other decreases
D. Final gross ex posure
- of which: exposur es transferred not derecognised
A.1.7.bis On-balance sheet credit exposures to customers: changes in gross forborne
exposures by credit quality
The regulatory changes contained in Circular No. 22 – fourth update are effective from the 2015
financial statements, except for the notes to the financial statements on forborne exposures for
which compilation is compulsory with effect from the 2016 financial statements. Publication of
table A.1.7.a “On-balance sheet credit exposures to customers: changes in gross forborne
exposures by credit quality” has therefore been omitted.
210*
UBI Banca - Notes to the Financial Statements
A.1.8 Non-performing (previously termed “deteriorated”) on-balance sheet credit exposures
to customers: changes in total impairment losses
Bad loans
(previously
termed "nonperf orming")
Description/categ ories
A. Tota l initial ne t impairment
Unlike ly to pay
loans
Non-per forming
(previously termed
"deteriorated") past due ex posures
(414,544)
( 242,606)
(1,528)
-
-
-
(146,118)
( 128,441)
(1,677)
(81, 549)
(124,250)
(965)
(8, 116)
-
-
(52, 362)
(1,097)
(284)
(4, 091)
(3,094)
(428)
174,106
135,409
1,870
10,648
6,899
40
C.2 realised reversals of impairment losses
8,172
34,333
412
C.3 pr of its on the disposal
3,387
-
-
143,737
41,898
-
46
52,279
1, 418
8,116
-
-
(386,556)
( 235,638)
(1,335)
-
-
-
- of which: exposures transf erred not
derecognised
B. Inc reases
B.1 impairment losses
B.2 losses on the disposal
B.3 transfers from other classes of non-performing
(pr eviously termed "deteriorated") exposure
B.4 other increases
C. Decreases
C.1 unrealised reversals of impairment losses
C.4 wr ite-offs
C.5 transfers to other categories of impair ed
exposures
C.6 other decreases
D. Total closing net impairment
- of which: exposures transf erred not
derecognised
The regulatory changes contained in Circular No. 262 – fourth update are effective from the 2015
financial statements, except for the notes to the financial statements on forborne exposures for
which the compilation is compulsory with effect from the 2016 financial statements.
Loans to customers: gross and net amounts
31 .12.201 5
B a d lo a n s
( p re v io u s l y
ter m ed "n o n p e rf or m i n g " )
G ro s s e x p o s u r e
- F i n a n c in g
- S e c u r it i e s
S p ec i f i c i m p a i rm e n t l o s s e s
- F i n a n c in g
N o n - p e rf o r m i n g
(p r e v i ou s ly t e r m e d
P er f o r m i n g lo a n s
" d e t e ri or at e d " ) p a s td u e e x p o s u re s
U n l i k el y t o p ay
lo a ns
7 06,01 7
706,017
-
1,10 7,340
1,107,340
-
2 5,006
25,006
-
2 0 , 7 3 4 ,3 2 9
2 0 , 6 2 2 ,9 8 5
1 1 1 ,3 4 4
( 3 8 6 ,5 5 6 )
( 3 8 6 ,5 5 6 )
(235,63 8)
( 2 3 5 ,6 3 8 )
(1 , 3 3 5 )
( 1 ,3 3 5 )
X
X
X
- S e c u r it i e s
-
-
-
P o rt f o l i o im p ai r m e n t lo s s es
- F i n a n c in g
- S e c u r it i e s
-
-
-
(47,773 )
(4 7 , 7 7 3 )
-
3 19,46 1
87 1,702
2 3,671
2 0 , 6 8 6 ,5 5 6
T o t al
211*
UBI Banca - Notes to the Financial Statements
A.2 Classification of exposures on the basis of external and internal ratings
A.2.1 Distribution of on- and off-balance sheet credit exposures by external rating class
Ext ernal r ating classe s
Exposur es
Classe 1
A. On-bala nce sheet credit exposures
Cla sse 2
Classe 3
Classe 4
C lasse 5
Unrated
Classe 6
Intragr oup
Total
123,452
7,196,065
18,753,346
42,984
10,879
1
7,980,018
22,588,279
56,695,024
25,155
267,144
469
1,705
-
-
252,390
245,180
792,043
25, 155
267,144
469
1,705
-
-
252, 390
245, 180
792,043
-
-
-
-
-
-
-
-
-
-
440,810
206,265
-
-
-
1,273,726
3,271,044
5,191,845
D. C ommit ment s to g rant funds
-
4,721
286,052
-
-
-
1,250,545
10,246,370
11,787,688
E. Othe r
-
220
-
-
-
-
9,998
-
10,218
148,607
7,908,960
19,246,132
44,689
10,879
1
10,766,677
36,350,873
74,476,818
B. Der iva tiv es
B.1 Financial derivatives
B.2 Credit derivatives
C. Guara nte es granted
Total
The following table gives the relationship between external rating classes reported in the table and the classes of the agency in question.
Moody’s.
Class
1
2
Moody's Ratings
Aaa,Aa,Aa1,Aa2,Aa3
A,A1,A2,A3
3
4
Baa,Baa1,Baa2,Baa3
Ba,Ba1,Ba2,Ba3
5
B,B1,B2,B3
Caa,Caa1,Caa2,Caa3,C
a,C,DDD,DD,D
6
212*
UBI Banca - Notes to the Financial Statements
A.2.2. Distribution of on- and off-balance sheet credit exposures by internal rating class
Internal rating classes
Exposures
Unrated
Total
1
2
3
4
5
6
7
8
9
10
11
12
13
14
34,912
524,714
645,779
395,940
3,574,794
1,424,325
656,634
53,832
63,007
327,075
153,312
87,144
53,776
42,516
48,484,843
-
27,057
-
898
31,127
1,911
116,941
6,238
3,356
13,292
-
-
-
3,292
587,931
792,043
B.1 Financial derivatives
-
27,057
-
898
31,127
1,911
116,941
6,238
3,356
13,292
-
-
-
3,292
587,931
792,043
B.2 Credit derivatives
A. On-balance sheet exposure
B. Derivatives
56,522,603
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
C. Guarantees granted
-
220,494
-
137,412
462,093
-
61,702
188,847
-
8,911
-
-
-
-
4,112,386
5,191,845
D. Commitments to grant funds
-
210,727
-
704,564
188,303
1,584
233,611
60,371
515
7,312
-
-
-
649
10,380,051
11,787,687
E. Other
-
-
-
-
-
-
-
-
-
-
-
-
-
-
10,218
10,218
34,912
982,992
645,779
1,238,814
4,256,317
1,427,820
1,068,888
309,288
66,878
356,590
153,312
87,144
53,776
46,457
63,575,429
74,304,396
Total
213*
UBI Banca - Notes to the Financial Statements
A.3 Distribution of guaranteed/secured exposures by type of guarantee
A.3.1 Guaranteed/secured credit exposures to banks
Secure d ( 1)
Credit derivatives
Properties
Amount of net
exposure
CLN s
Sec urities
Mortgages
Total (1)+(2)
Personal guarantees (2)
Ot her
collat eral
Other derivatives
Governmen
ts and
Other public
central
author ities
b anks
Fina nce
le ases
Unsecured gua rantees
Banks
Governments and Other pub lic
c ent ral
aut horities
banks
Other
Banks
Other
1. On-ba lance sheet
guaranteed/secur ed c redit
exposures
1.1. ful ly guaranteed/secured
- of which nonperforming (previously
termed "deteriorated")
1.2. partially
gua ranteed/ secured
702,679
15,304
-
687,331
-
-
-
-
-
-
-
-
17
-
702,652
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
6
-
-
-
-
-
-
-
-
-
-
-
6
-
6
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2.1. ful ly guaranteed/secured
109,258
-
-
-
109, 258
-
-
-
-
-
-
-
-
-
109,258
- of which nonperforming (previously
termed "deteriorated")
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
33,306
-
-
-
32, 320
-
-
-
-
-
-
-
-
-
32,320
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
- of which nonperforming (previously
termed "deteriorated")
2. Off-balance sheet
guaranteed/secur ed c redit
exposures
2.2. partially
gua ranteed/ secured
- of which nonperforming (previously
termed "deteriorated")
214*
UBI Banca - Notes to the Financial Statements
A.3.2 Guaranteed/secured credit exposures to customers
Total (1)+(2)
Persona l guarantee s (2)
Secur ed ( 1)
Amount of
net exposure
Credit de riv ativ es
C LNs
Properties
Mortgages
Securit ies
Finance
leases
U nsecured guar ant ees
Other derivatives
Other
colla teral
Gov ernment s and Ot her public
central
a uthor ities
banks
Banks
Gov ernOther
ments and
public
central
aut horit ies
b anks
Other
Banks
Ot her
1. On-ba lance sheet
guaranteed/secur ed c redit
exposur es
1. 1. ful ly guaranteed/secured
- of which non-per forming
(previously termed
"deteriorated")
8,720, 444
5,435,394
-
1, 588,942
-
-
-
-
-
-
-
-
132,152
210,993
7,367,481
933, 778
874,764
-
1,915
-
-
-
-
-
-
-
-
898
27,781
905,358
1. 2. partially guar anteed/ secured
- of which non-per forming
(previously termed
"deteriorated")
581, 015
31,681
-
51,681
-
-
-
-
-
-
-
-
102,552
33,777
219,691
49, 601
24,345
-
6,828
-
-
-
-
-
-
-
-
618
3,772
35,563
272, 344
59
-
74,259
166,584
-
-
-
-
-
-
-
54
25,316
266,272
1, 864
-
-
-
-
-
-
-
-
-
-
-
-
-
-
36, 182
-
-
4,306
-
-
-
-
-
-
-
-
-
2,267
6,573
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
2. Off-balance sheet
guaranteed/secur ed c redit
exposur es
2. 1. ful ly guaranteed/secured
- of which non-per forming
(previously termed
"deteriorated")
2. 2. partially guar anteed/ secured
- of which non-per forming
(previously termed
"deteriorated")
-
The fourth update of Circular No. 262 states that total guarantees cannot be greater than the carrying amount. Consequently the amounts are
not comparable with those reported in the tables as at 31st December 2014.
215*
UBI Banca - Notes to the Financial Statements
B. DISTRIBUTION AND CONCENTRATION OF CREDIT EXPOSURES
B.1 Distribution by sector of on- and off-balance sheet credit exposures to customers (carrying amount)
(6,650)
461, 593
(145,559)
250, 822
(81,418)
10, 681
(653)
Po rtfolio
impairment losses
6, 154
Specific
impair ment losses
(71,324)
Net exposure
89, 767
Ot her
Po rtfolio
impair ment losses
Specific
impair me nt losses
Non-financ ial companies
Net exposur e
Por tfolio
impa irment losses
Net exposure
Specific
impairment losses
Insur ance companies
Po rtfolio
impairment losses
Specific
impairment losses
Financial companies
Ne t exposur e
Por tfolio
impairment losses
Net exposur e
Specific
impairment losse s
Other public authorities
Portfolio
impairment losses
Net e xposure
Ex posur es/ Count erpar tie s
Specific
impairme nt losses
Gover nments
A. On-bala nce sheet exposure
A.1 Bad l oans (previously termed
-
-
x
-
-
x
12,486
(20,282)
x
-
-
x
of which: f orborne exposures
A.2 Unlikely to pay loans
-
-
x
-
-
x
of which: f orborne exposures
A.3 Non-performing (previously
termed "deteriorated") past-due
-
-
x
-
-
x
14,809
(4,115)
4,626
(2,750)
-
-
x
x
-
-
-
-
x
x
x
x
x
of which: f orborne exposures
A.4 Performing loans
18,283, 241
x
-
21,564
x
(12)
12,761,543
x
(2,897)
123,912
x
-
of which: f orborne exposures
Tot al A
4,084, 846
x
(19,684)
50, 013
18,283,241
-
B.1 Bad loans (previously terme
-
-
B.2 Unlikely to pay loans
B.3 Other non-per forming
(pr eviously termed
"deteriorated") assets
-
-
-
-
-
21,564
-
(12)
12,788,838
(24,397)
x
-
-
x
-
-
x
-
-
x
-
-
x
-
-
x
-
(78)
1,302,284
-
(78)
1,302,284
(2,897)
-
4,646,887
(1,108)
123,912
-
( 217,536)
x
-
-
x
-
-
x
-
-
x
11, 073
(1,478)
-
-
-
-
x
-
-
(13,004)
24,943
(57)
2,149, 444
-
(13,004)
24,943
-
( 57)
2,160,517
(19,684)
217, 208
(294,950)
4, 150
(2,667)
412, 876
(85,964)
121, 810
(17,712)
12, 989
(682)
4, 031
(212)
4,263, 381
x
x
x
-
(25 ,180)
174, 362
(2,092)
4,906,454
(381,596)
(25,180)
x
-
-
x
x
-
-
x
x
-
-
x
B. Off-b alance sheet
exposur es
B.4 Performing loa ns
64, 547
Tot al B
64,547
x
-
-
89,922
-
89,922
x
x
x
x
(1,478)
(3,612)
209, 166
( 3,612)
209,166
x
-
(3,457)
(3 ,457)
Tot al (A+B) 31.12.2015 18,347,788
-
-
111,486
-
(90)
14,091,122
(24,397)
(15,901)
148,855
-
( 57)
6,807,404
( 219,014)
(23,296)
5,115,620
(381,596)
(28,637)
Tot al (A+B) 31.12.2014 21,905,473
-
(61)
114,482
-
(443)
14,065,900
(20,670)
(12,950)
133,782
-
( 51)
6,608,170
( 235,537)
(28,946)
5,717,786
(406,532)
(62,065)
216*
UBI Banca - Notes to the Financial Statements
B.2 Geographical distribution of on- and off-balance sheet credit exposures to customers (carrying amount)
ITALY
Exposur es/ Geogr aphica l ar eas
A. On-bala nce sheet exposure
A.1 Bad l oans (previously termed
"non-p erf orming" loa ns)
A.2 Unlikely to pay loans
A.3 Non-performing (previously
termed "deteriorated") past-due
exposures
OTHER EUROPEAN COUNTRIES
N et ex posure
Total impair ment
losses
316,2 96
(380,169)
868,2 78
(214,990)
AMERIC A
ASIA
Total
impairment
losses
REST OF THE WORLD
Tot al
impairment
losses
Total
impair ment
losses
Total impairment
losses
N et ex posure
3,1 65
(6,387)
-
-
-
-
-
-
21,0 00
(20,648)
-
-
-
-
-
-
N et ex posure
Net exposure
Net expo sure
23,6 70
( 1,33 5)
-
-
-
-
-
-
-
-
A.4 Performing loans
38,693,5 78
(4 6,38 4)
645,2 14
(1,384)
15 6,179
(5)
27, 780
-
15,738
-
TOTAL A
39,901,822
(642,878)
669,379
(28,419)
156,179
( 5)
27,780
-
15,738
-
-
-
-
-
-
-
-
-
-
-
11,0 73
( 1,47 8)
-
-
-
-
-
-
-
-
B. Off-b alance sheet e xposures
B.1 Bad loans (previously termed
"non-p erf orming" loa ns)
B.2 Unlikely to pay loans
B.3 Other non-per forming
(pr eviously termed "deteriorated")
assets
B.4 Performing loa ns
TOTAL B
-
-
-
-
-
-
-
-
-
-
3,597,2 73
(2 0,19 2)
214,8 39
(15)
2 8,194
-
-
-
-
-
3,608,346
(21,670)
214,839
( 15)
28,194
-
-
-
-
-
To tal (A+B) 31.12.2015
43,510,168
(664,548)
884,218
(28,434)
184,373
( 5)
27,780
-
15,738
-
To tal (A+B) 31.12.2014
47,952,113
(757,387)
580,623
(9,859)
12,829
( 6)
8
(3)
21
(1)
217*
UBI Banca - Notes to the Financial Statements
B.3 Geographical distribution of on- and off-balance sheet credit exposures to banks (carrying amount)
Exposures/Ge ographical areas
ITALY
Net e xposure
A. On-bala nce sheet exposure
A.1 Bad l oans (previously termed
"non-perf orming" loa ns)
A.2 Unlikely to pay loans
A.3 Non-performing (previously
termed "deteriorated") past-due
exposures
OTHER EUROPEAN COUNTRIES
Total
impair ment
losses
AMERIC A
Total impair ment
losses
Net exposure
ASIA
Total
impairment
losses
Net exposure
REST OF THE WORLD
Net exposur e
Total impair ment
losses
N et ex posure
Tot al
impairment
losses
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
A.4 Performing loans
14,602, 645
-
1,130,651
-
13,960
-
2,839
-
1,611
-
TOTAL A
14,602,645
-
1,130,651
-
13,960
-
2,839
-
1,611
-
B. Off-b alance sheet e xposures
B.1 Bad loans (previously termed
"non-perf orming" loa ns)
B.2 Unlikely to pay loans
B.3 Other non-per forming
(pr eviously termed "deteriorated")
assets
B.4 Performing loa ns
TOTAL B
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
(1)
-
-
-
-
-
-
-
-
2,620, 582
(56)
11,298,115
( 4)
-
-
1,499
(1)
-
-
2,620,582
(57)
11,298,115
(4)
-
-
1,499
(1)
-
-
Total (A+B) 31.12.2015
17,223,227
(57)
12,428,766
(4)
13,960
-
4,338
(1)
1,611
-
Total (A+B) 31.12.2014
16,172,178
(1)
16,695,193
(16)
5,027
-
1,117
-
160
-
218*
UBI Banca - Notes to the Financial Statements
B.4 Large exposures
On the basis of circulars No. 285 of 17th December 2013 and No. 286 of 17th December 2013, the
number of large exposures presented in the table was determined by making reference to the nonweighted “exposures”, including those towards Group counterparties, with a nominal value equal
to or greater than 10% of the regulatory capital, where “exposures” are defined as the sum of onbalance sheet risk assets and off-balance sheet commitments (excluding those deducted from
regulatory capital) to a customer or group of connected customers, without the application of
weighting factors.
These exposure criteria result also in the inclusion in the balance sheet table of large risk
positions which – although they have a weighting factor of 0% - have a non-weighted exposure of
greater than 10% of the capital valid for the purposes of large risks.
Individual banks belonging to banking groups are subject to an individual limit of 25% of their
regulatory capital. The latter limit relates to the “risk position”, which is the weighted exposure
according to the rules of the current regulations.
31.12.2015
Number of positions
4
Exposure
80, 085,957
of which in tragroup
Risk position
52,959,035
-
of which in tragroup
-
Exposures to other Group companies amounted to €52.959 billion (€0 considering weighting
factors). Other “large exposures” consisted of the following: €1.5 billion to the Ministry of the
Economy and Finance (€0 considering weighting factors); €7.4 billion to the Cassa di
Compensazione e Garanzia (a central counterparty clearing house) (€0 considering weighting
factors); €18.2 billion to the Ministry of the Treasury (€0 considering weighting factors).
C. Securitisation operations
Qualitative information
Securitisations with underlying portfolios originated by banks in the Group UBI are not reported
in this section, because all the securitised securities were fully subscribed by each originator at
the time of issue. As allowed by regulations the relative sections of the notes to the financial
statements have therefore not been compiled. For full information the main characteristics of the
transactions existing at the time of preparing these notes to the financial statements have
nevertheless been reported.
UBI Finance 3 transaction
The structuring of the UBI Finance 3 securitisation was commenced at the end of 2010 with the
transfer to a special purpose entity named UBI Finance 3 Srl21 of a portfolio of loans mainly to
small and medium-sized businesses of €2.8 billion, classified as performing, and held by Banca
Popolare di Bergamo Spa, while the securities resulting from the securitisation were then issued
by the special purpose entity in the following year 2011.
The purpose of the transaction was to create securities to be used as collateral eligible for
refinancing operations. Consequently the notes issued were repurchased entirely by the originator
Banca Popolare di Bergamo, which subsequently made the senior notes available to the Parent –
by means of repurchase agreements – for use in refinancing operations with central banks.
21 The company is subject to full consolidation by the Parent, UBI Banca according to the accounting standards in
force.
219*
UBI Banca - Notes to the Financial Statements
The characteristics of the notes issued were as follows:

class A notes (senior tranches): nominal amount €1,863,600,000.00 at floating rate,
maturity 2050, with rating by Fitch and Moody’s (subsequently downgraded to A+ by Fitch and to
Aa2 by Moody’s following the progressive downgrading of the rating for Italy and for the Parent
UBI Banca by the two agencies in 2011 and 2012);

class B notes (junior tranches): nominal amount €897,300,000.00, maturity 2050, unrated
and with a yield equal to the additional return on the transaction. These notes are fully held by
the originator, Banca Popolare di Bergamo.
The progressive amortisation of the class A note totalling €1.738 billion commenced from the
payment date of 24th April 2013.
Given the small remaining value of the securitised portfolio and of the eligible securities backed
by it, the transaction was wound up in advance during the fourth quarter of 2015. On 12th
November 2015 the securities were withdrawn from the collateral pool held with the Bank of Italy,
while on the following 26th November, the documentation necessary to proceed to the repurchase
of the portfolio by the originator Banca Popolare di Bergamo (concluded with effect for financial
and accounting purposes from 16th November), the closure of the swap contracts and the
redemption of the securitised notes was signed by the various counterparties in the following
December.
Consequently, on the extraordinary payment date of 17th December, in compliance with the
provisions of the contract for the transaction, UBI Finance 3 carried out the following:
- the full redemption of the senior notes;
- settlement of amounts to close the swap contracts;
- the repayment to Banca Popolare di Bergamo, in its capacity as the subordinated lender, of the
total financing of €122.6 million granted to cover “set-off” risk on the loans transferred 22;
- the repayment to UBI Banca of the sum of €28 million paid to UBI Finance 3 in its capacity as
the “liquidity facility provider” during the life of the securitisation;
- payment of the excess spread and for redemption of the junior notes.
22
This is the risk that in the event of the default of the originator Banca Popolare di Bergamo the debtors
transferred might attempt to set-off amounts owed to them by the special purpose entity against the sums
deposited with the originator prior to the transfer of the respective loans.
220*
UBI Banca - Notes to the Financial Statements
On that occasion the deposit to guarantee against “commingling risk”23 amounting to €27.6
million as at the date of the close down of the operation was repaid to UBI Banca.
The table below reports the amount redeemed for the two classes of notes:
UBI FINANCE 3 –
SECURITISED NOTES
ISIN Number
Nominal amount when
issued
Amount redeemed
as at 31.12.2015
Remaining nominal
value as at
31.12.2015
% redeemed
Class A
IT0004675861
1,863,600,000.00
1,863,600,000.00
0.00
100.0%
897,300,000.00
897,300,000.00
0.00
100.0%
2,760,900,000.00
2,760,900,000.00
0.00
100.0%
Class B
IT0004675879
Total
The roles of cash manager, paying agent and English account bank were performed for the
securitisation transaction by The Bank of New York Mellon, while UBI Banca, as the Parent, filled
the roles of Italian account bank, calculation agent and servicer. The originator, Banca Popolare
di Bergamo, as the sub-servicer, was responsible for collecting payments and managing relations
with customers for the securitised relationships (except for those positions classified as bad loans
(previously termed “non-performing”), managed by the Problem Loans and Credit Recovery Area of
the Parent).
Payments received in 2015 amounted to €250 million.
Fees for the above activities for 2015 and until the closure of the operation amounted to €407
thousand for Banca Popolare di Bergamo and €323 thousand for UBI Banca.
Securitisation Transactions UBI SPV BPA 2012, UBI SPV BPCI 2012 and UBI SPV BBS
2012
The structuring of three new securitisations was completed simultaneously in 2012, with the
transfer to three new special purpose entities, named UBI SPV BPA 2012 Srl, UBI SPV BPCI 2012
Srl and UBI SPV BBS 2012 Srl24 of loans to small to medium-sized enterprises classified as
performing, held by Banca Popolare di Ancona, Banca Popolare Commercio Spa and Industria and
Banco di Brescia Spa respectively.
These new securitisations were also structured with the objective of creating collateral for the
Group eligible for refinancing with central banks, according to the model described above. As a
consequence on this occasion too, the originator banks fully subscribed the entire amount of the
securitised notes when they were issued and then made only the class A notes available to UBI
Banca, by means of repurchase agreements.
The characteristics of the notes issued at the same time for all three securitisations on 30th
October 2012 are as follows:
1)
Securitisation UBI SPV BPA 2012

class A notes (senior tranches): nominal amount €709,800,000 at floating rate, maturity in
2057, assigned ratings A- by Standard & Poor’s and A (low) by DBRS at the time of issue;
The risk of commingling relates to the account bank role and represents the risk that if a downgrade which
resulted in the transfer of the SPE’s current accounts from the UBI Group to a third-party company, the immediate
transfer to the accounts of sums received by the servicer might not occur.
24 The companies are subject to full consolidation by the Parent, UBI Banca, according to the accounting standards
in force.
23
221*
UBI Banca - Notes to the Financial Statements

class B notes (junior tranches): nominal amount €307,800,000, maturity 2057, unrated and
with a yield equal to the additional return on the transaction.
2)
Securitisation UBI SPV BPCI 2012

class A notes (senior tranches): nominal amount €575,600,000 at floating rate, maturity in
2057, assigned ratings A- by Standard & Poor’s and A (low) by DBRS at the time of issue;

class B notes (junior tranches): nominal amount €277,100,000, maturity 2057, unrated and
with a yield equal to the additional return on the transaction.
3)
Securitisation UBI SPV BBS 2012

class A notes (senior tranches): nominal amount €644,600,000 at floating rate, maturity in
2057, assigned ratings A- by Standard & Poor’s and A (low) by DBRS at the time of issue;

class B notes (junior tranches): nominal amount €244,400,000, maturity 2057, unrated and
with a yield equal to the additional return on the transaction.
Here too, the new ratings assigned to the above securities – which also remained valid as at 31st
December 2015 – are compatible with the eligibility requirements for refinancing operations with
the central bank.
The amortisation of the notes began on the payment date of 7th July 2014. The class A notes
were partially redeemed from that date.
The table below reports the amount redeemed and the remaining amount of the notes as at the
reporting date for each transaction.
UBI SPV BPA 2012 Srl –
SECURITISED NOTES
ISIN Number
Class A
IT0004841141
709,800,000
365,584,506
344,215,494
51.5%
Class B
IT0004841158
307,800,000
0
307,800,000
0.0%
1,017,600,000
365,584,506
652,015,494
35.9%
Total
Nominal amount
when issued
Remaining nominal
value as at 31.12.2015
Amount redeemed
as at 31.12.2015
Remaining nominal
value as at 31.12.2015
% redeemed
UBI SPV BPCI 2012 Srl –
SECURITISED NOTES
ISIN Number
Class A
IT0004840994
575,600,000
418,069,723
157,530,277
72.6%
Class B
IT0004841000
277,100,000
0
277,100,000
0.0%
852,700,000
418,069,723
434,630,277
49.0%
Total
Nominal amount
when issued
Amount redeemed
as at 31.12.2015
% redeemed
UBI SPV BBS 2012 Srl –
SECURITISED NOTES
ISIN Number
Nominal amount
when issued
Amount redeemed
as at 31.12.2015
Remaining nominal
value as at 31.12.2015
% redeemed
Class A
IT0004841125
644,600,000
404,601,316
239,998,684
62.8%
Class B
IT0004841133
244,400,000
0
244,400,000
0.0%
889,000,000
404,601,316
484,398,684
45.5%
Total
222*
UBI Banca - Notes to the Financial Statements
For full information, we report that on 7th January 2016 the next amortisation date, further
redemptions on the class A notes were made of €68.2 million for UBI SPV BPA 2012, €41.2
million for UBI SPV BPCI 2012 and €48.9 million for UBI SPV BBS 2012.
In view of the subordination clauses no redemption has been paid on the class B notes for each
operation.
As concerns the portfolio originally transferred, this totalled €2.76 billion, divided among the
three originator banks as follows: Banca Popolare di Ancona €1.017 billion; Banca Popolare
Commercio e Industria €852 million; and Banco di Brescia €889 million.
The transactions in question are “revolving” operations and therefore it was possible for further
transfers of mortgages within 18 months of issue by the originator banks, to be financed by the
special purpose entities with the receipts generated by each securitised portfolio. Consistent with
that provision, in the first quarter of 2014 a further transfer of assets was completed for a total of
€647 million divided between the three securitisations as follows (in terms of remaining principal
debt):
-
Banca Popolare di Ancona / UBI SPV BPA 2012: €317 million;
-
Banca Popolare Commercio ed Industria / UBI SPV BPCI 2012: €137 million;
-
Banco di Brescia / UBI SPV BBS 2012: €193 million
Furthermore, in order to further improve the overall quality of the portfolio, in the first quarter of
2014 each originator bank had concluded a voluntary repurchase of high-risk performing loans
amounting to €136 million of loans from the portfolios initially transferred. The amounts
repurchased for each originator/SPE are as follows (in terms of the remaining principal debt):
-
Banca Popolare di Ancona / UBI SPV BPA 2012: €42 million
-
Banca Popolare Commercio ed Industria / UBI SPV BPCI 2012: €27 million
-
Banco di Brescia / UBI SPV BBS 2012: €67 million
A new loan repurchase operation was carried out in the third quarter of 2015: in this case the
three originator banks repurchased non-performing loans (previously termed “deteriorated”)
totalling €69 million of the remaining principal debt. The operation was concluded on 30th October
(with effect for accounting and financial purposes from the previous 19th October). The loans
repurchased for each originator/SPE, again in terms of remaining principal debt, were as follows:
-
Banca Popolare di Ancona / UBI SPV BPA 2012: €35 million
-
Banca Popolare Commercio ed Industria / UBI SPV BPCI 2012: €13 million
-
Banco di Brescia / UBI SPV BBS 2012: €21 million
With account taken of the transactions described above and the natural amortisation of the
loans, the total portfolio transferred by the three originator banks – here too still recognised in the
balance sheets of the originators – amounted to €1.455 billion of remaining principal debt as at
the 31st December 2015.
223*
UBI Banca - Notes to the Financial Statements
The tables below give the distribution of the securitised portfolio for each transferring bank by
the quality of the loans as at 31.12.2015 on the basis of the classification in the balance sheet of
the originator (in terms of the net book amount) and the reporting classification of the transaction
(in terms of the remaining principal debt):
1)
Securitisation UBI SPV BPA 2012
TYPE OF LOAN
(Balance sheet classification)
Performing loans
Performing past-due exposures
Non-performing (previously termed
deteriorated”) past-due exposures
Unlikely to pay loans
Bad loans (previously termed “nonerforming”)
TOTAL assets transferred from Banca
Popolare di Ancona to UBI SPV BPA
2012
2)
Carrying amount
as at 31.12.2015
(thousands of
euro)
TYPE OF LOAN
(Classification for the purposes of the
transaction)
531,807
Performing loans
19,800
Loans in arrears
2,284
38,590
4,326
Remaining principal
debt as at 31.12.2015
(thousands of euro)
543,615
5,631
COLLATERAL PORTFOLIO
549,246
Defaulted Loans
50,792
TOTAL UBI SPV BPA 2012 PORTFOLIO
600,038
596,807
Securitisation UBI SPV BPCI 2012
TYPE OF LOAN
(Balance sheet classification)
Performing loans
Performing past-due exposures
Non-performing (previously termed
“deteriorated”) past-due exposures
Unlikely to pay loans
Bad loans (previously termed “nonperforming”)
TOTAL assets transferred from Banca
Pop. Comm. Industria to UBISPV BPCI
2012
Carrying amount
as at 31.12.2015
(thousands of
euro)
371,646
15,658
4,820
16,787
2,023
TYPE OF LOAN
(Classification for the
purposes of the
transaction)
Performing Loans
Remaining principal debt as at
31.12.2015 (thousands of euro)
383,303
Loans in arrears
3,398
COLLATERAL
PORTFOLIO
386,701
Defaulted Loans
25,721
TOTAL UBI SPV BPCI 2012
PORTFOLIO
412,422
410,934
224*
UBI Banca - Notes to the Financial Statements
3)
Securitisation UBI SPV BBS 2012
TYPE OF LOAN
(Balance sheet classification)
Carrying amount
as at 31.12.2015
(thousands of
euro)
Performing loans
393,163
Performing past-due exposures
15,074
Non-performing (previously termed
“deteriorated”) past-due exposures
2,902
Unlikely to pay loans
23,284
Bad loans (previously termed “nonperforming”)
6,242
TOTAL assets transferred from Banco
di Brescia to UBI SPV BBS 2012
TYPE OF LOAN
(Classification for the
purposes of the
transaction)
Remaining principal debt as at
31.12.2015
(thousands of euro)
Performing Loans
405,554
Loans in arrears
3,099
COLLATERAL PORTFOLIO
408,653
Defaulted Loans
34,196
TOTAL UBI SPV BPA 2012
PORTFOLIO
442,849
440,665
The structure of the transaction, which also conformed to the model adopted for the other
transactions, consisted of UBI Banca as the Parent in the role of servicer, while the collection of
payments and managing relations with customers for the securitised assets were carried out by
the three originator banks as the sub-servicers (here too, except for those positions reclassified as
bad loans (previously termed “non-performing”), which will be managed by Problem Loans and
Credit Recovery of the Parent Area of the Parent).
The payments received in 2015 are shown for each originator bank in the table as follows:
PAYMENTS RECEIVED
(Figures in thousands of euro)
Payments received in 2015
TOTAL
447,635
SVP 2012 BPA BANCA
POP.ANCONA
187,059
SVP 2012 BPCI BANCA
POP.COMMERCIO ED
INDUSTRIA
121,404
SVP 2012 BBS BANCO DI BRESCIA
139,172
The payments to UBI Banca for 2015 for the servicing activities reported above totalled €542
thousand, while the payments for the three sub-servicers were as follows: €268 thousand for
Banca Popolare di Ancona; €185 thousand for Banca Popolare Commercio ed Industria and €199
thousand for Banco di Brescia.
The three originator banks also fill the role of subordinated loan provider. In order to create a
cash reserve to meet risks connected with the operations, in 2012 subordinated loans were
granted by each originator bank for the following amounts:
- €26.6 million by Banca Popolare di Ancona, increased by €8.8 million in 2013 and by a further
€11.3 million in 2014, at the time of the “revolving” transfer;
- €26.3 million by Banca Popolare Commercio ed Industria, increased by a further €4.9 million
in 2014, at the time of the “evolving” transfer;
- €22.9 million by Banco di Brescia, increased subsequently by €2.8 million in 2013 and by a
further €3.6 million in 2014, at the time of the “revolving” transfer.
The financial support provided by Group banks to the securitisations in question therefore
amounted as at 31.12.2015 to a total of €107.2 million.
As for the other securitisations described above, the roles of cash manager, paying agent and
English account bank are performed for all three transactions by The Bank of New York Mellon.
225*
UBI Banca - Notes to the Financial Statements
Furthermore, taking a prudential approach in order to comply with the eligibility requirements
even under market stress scenario conditions, a backup servicer facilitator was appointed for
these three securitisations at the beginning of 2015.
Transaction 24-7 Finance
The securitisation 247 Finance Srl was performed in 2008 with the underlying assets held by
B@nca 24-7 Spa, a company which, as is known, was merged into UBI Banca in 2012.
The assets types which were securitised by transfer to a single special purpose entity, 24-7
Finance srl, consisted of three different portfolios:
1) mortgages: performing loans resulting from mortgages granted to private individuals
resident in Italy, secured by a prime grade mortgages on residential properties located in Italy all
fully built;
2) salary backed loans: performing loans resulting from salary backed loans to private
individuals resident in Italy, secured by a “deducted for non-payment” clause and by a loss of
employment insurance policy;
3) consumer loans: performing loans resulting from personal loans and dedicated loans to
private individuals resident in Italy.
Three different issuances of securitised notes were structured by the special purpose entity 24-7
Finance Srl on those assets.
The securitisation transaction for salary backed loans was wound up in advance in 2011.
Similarly the securitisation transaction with consumer loans for the underlying portfolio was
also wound up in advance in 2012.
Therefore only the mortgages transaction was still in existence as at 31.12.2015 for which the
portfolio amounted on that date to €1.320 billion (remaining principal debt).
The tables below give the distribution of the securitised portfolio by the quality of the loans as at
31.12.2015 on the basis of the classification in the balance sheet of the originator (in terms of the
net book amount) and the reporting classification of the transaction (in terms of the remaining
principal debt “customer view”):
TYPE OF LOAN
(Balance sheet classification)
Performing loans
Performing past-due exposures
Non-performing (previously termed
“deteriorated”) past-due exposures
Unlikely to pay loans
Carrying amount as at
31.12.2015
(thousands of euro)
TYPE OF LOAN
(Classification for the
purposes of the transaction)
1,082,824
Performing loans
45,894
Loans in arrears
3,901
COLLATERAL PORTFOLIO
117,114
Bad loans (previously termed “nonperforming”)
80,925
TOTAL assets transferred from UBI
Banca to 24-7 Finance
1,330,658
Defaulted loans
TOTAL 24-7 FINANCE
PORTFOLIO
Remaining principal debt as
at 31.12.2015
(thousands of euro)
1,063,496
45,597
1,109,093
211,238
1,320,331
The characteristics of the notes issued were as follows:
226*
UBI Banca - Notes to the Financial Statements

class A notes (senior notes): nominal amount €2,279,250,000, at floating rate, and initially
assigned a rating of Aaa by Moody’s; the current rating by Moody’s is Aa3, while the second rating
- assigned by DBRS in 2011, in order to comply with eligibility requirements, is A (high);

class B notes (junior securities): nominal amount €225,416,196, maturity 2055, unrated
and with a yield equal to the additional return on the underlying portfolio.
The securitised notes are wholly owned by UBI Banca which, as for the securitisations described
above, uses the senior tranche as collateral eligible for the financing operations with central
banks.
The amortisation of the class A notes began from February 2010. The table below reports total
amortisation and the remaining value of the notes as at 31.12.2015:
24/7 FINANCE SRL –
SECURITISED NOTES
ISIN Number
Nominal amount when
issued
Class A
IT0004376437
2,279,250,000
1,344,400,250
934,849,750
59.0%
Class B
IT0004376445
225,416,196
0
225,416,196
0.0%
2,504,666,196
1,344,400,250
1,160,265,946
53.7%
Total
Amount redeemed
as at 31.12.2015
Remaining nominal
value as at 31.12.2015
% redeemed
The roles of cash manager, calculation agent and paying agent are performed for the
securitisation by The Bank of New York Mellon which also acts as the account bank.
In addition to the role of originator Banca 24-7 also functioned as the servicer for the
transaction, a role that is now carried out by UBI Banca following the merger of the two entities.
The consideration due to UBI Banca for servicing activities carried out in 2015 totalled €447
thousand, while total payments received as part of servicing activity amounted to €153 million for
the year 2015.
For full information we report that Banca 24-7 Finance also filled the role of subordinated loan
provider, having granted a subordinated loan designed to create an initial cash reserve to meet
possible shortages of liquidity for the operation. At the time of the merger into UBI Banca in 2012,
a subordinated loan of approximately €24.4 million was outstanding, which was subsequently
increased in 2013 by a further €73 million.
The financial support provided by UBI Banca to the securitisation, given that no repayments of
the loan had been made since 2012, amounted to €97.6 million.
Transaction UBI Lease Finance 5
As part of the process to centralise the administrative and control activities of Group companies
at the Parent, on 1st November 2015 UBI Banca also took over the role of servicer of the UBI Lease
Finance 5 securitisation, which had been structured in 2008 with assets of the subsidiary UBI
Leasing. At the same time UBI Leasing took the role of sub-servicer for the management of the
securitised portfolios inclusive of bad loan (previously termed “non-performing”) accounts.
The consideration due to UBI Banca for servicing activities carried out in November and
December 2015 amounted to €19 thousand.
A detailed description of the UBI Lease Finance 5 securitisation is given in the corresponding
section of the consolidated annual report.
227*
UBI Banca - Notes to the Financial Statements
Quantitative information
C.1 Exposures resulting from the principal “own” securitisation transactions by type of
securitised assets and by type of exposure
No exposures resulting from “own” securitisation transactions to report.
C.2 Exposures resulting from the principal “third party” securitisation transactions by type
of securitised assets and by type of exposure
No exposures resulting from “third party” securitisation transactions to report.
C.3 Securitisation special purpose entities
We report the only securitisation connected with 24-7 Finance, full details of which are given in
the previous part on qualitative information.
C.4 Securitisation special purpose entities not consolidated
Information on this item is given in the Consolidated Annual Report, which may be consulted.
C.5 Servicer activity – only securitisations: payments received on securitised loans and
redemptions of securities issued by the special purpose entity
As reported in Part C.1, the operation was wound up in April 2013.
D. Information on structured entities not included in the consolidated
accounts (other than securitisation special purpose entities)
Information on this item is given in the Consolidated Annual Report, which may be consulted.
228*
UBI Banca - Notes to the Financial Statements
E. Transfers
A. Financial assets transferred and not fully derecognised
Quantitative information
E.1 Financial assets transferred not derecognised: carrying amount and full value
T yp e / P o rt f o lio
A . O n - b a la n c e s h e e t a s s e
1. De bt ins trum e nts
F in a n c ia l a s s e t s
d e s ig n a t e d a t f a ir
v a lu e
F in a n c ia l a s s e t s h e ld
f o r t ra d in g
4 19 ,2 6 2
-
-
-
-
A v a ila b le - f o r- s a le
f in a n c ia l a s s e t s
-
3 ,9 3 4 ,2 0 1
-
H e ld - t o - m a t u rit y
in v e s t m e n t s
-
1,6 9 1,2 6 8
-
-
-
-
-
-
2. Equity ins trum e nts
-
-
-
-
-
-
-
-
-
x
x
x
x
x
x
x
x
x
-
-
3. UC ITS
-
-
-
-
-
-
-
-
-
x
x
x
x
x
x
x
x
x
-
-
-
T o t a l 3 1.12 .2 0 15
o f whic h no n-pe rfo rm ing
(pre v io us ly te rm e d
"de te rio rate d")
4 19 ,2 6 2
-
-
T o t a l 3 1.12 .2 0 14
o f whic h no n-pe rfo rm ing
(pre v io us ly te rm e d
"de te rio rate d")
4 15 ,9 5 0
-
-
-
-
-
-
x
-
-
-
x
-
-
-
x
-
-
-
x
3 ,9 3 4 ,2 0 1
-
3 ,4 8 6 ,13 5
-
x
-
-
x
-
-
-
x
1,6 9 1,2 6 8
-
-
229*
-
x
-
1,8 5 0 ,111
-
x
-
-
-
-
x
-
x
-
-
-
-
x
-
-
-
-
6,044,731
-
-
-
UBI Banca - Notes to the Financial Statements
x
-
x
x
-
-
6 ,0 4 4 ,7 3 1
-
-
-
-
-
5,752,196
-
x
-
-
x
-
-
-
x
-
-
5 ,7 5 2 ,19 6
3,934,201
-
-
6 ,0 4 4 ,7 3 1
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
B . D e riv a t iv e in s t ru m e n t s
-
To ta l
419,262
4. F ina nc ing
1,691,268
Lo a n s t o
c u s t o m e rs
Lo a n s t o b a n k s
x
5 ,7 5 2 ,19 6
-
E.2 Financial liabilities resulting from financial assets transferred not derecognised: carrying amount
Liab ility/Asset portfolio
1. Due to customers
Financial assets
designate d at fair
value
Financia l assets
held for trading
Availab le-for-sale
financia l assets
Held-to-maturity
inve stments
Loans to banks
Loans to
cust omers
Total
324,896
-
3,889,717
1,743,109
-
-
5,957,722
324, 896
-
3, 889,717
1,743,109
-
-
5,957,722
-
-
-
-
-
-
-
94,424
-
51,564
-
-
-
145,988
94, 424
-
51,564
-
-
-
145,988
-
-
-
-
-
-
-
Total 31.12.2015
419,320
-
3,941,281
1,743,109
-
-
6,103,710
Total 31.12.2014
415,669
-
3,452,604
1,856,404
-
-
5,724,677
a) against fully recognised assets
b) against par tially recognised assets
2. Due to banks
a) against fully recognised assets
b) against par tially recognised assets
230*
UBI Banca - Notes to the Financial Statements
E.3 Transfers with liabilities backed exclusively by the assets transferred: fair value
Type/Portfolio
Financial assets held for
trading
Financial assets
desig nat ed a t fair value
Av ailable-for-sale financia l
assets
Held-to-maturit y
investments ( fair v alue)
A
B
A
B
A
B
A
B
Loans and a dvances to
b anks (fair value)
A
B
Loans and advanc es to
customer s (fair value)
Total
Total
31.12.2014
A
B
31.12.2015
6,095, 650
A. On-balance sheet assets
419,262
-
-
-
3, 934,201
-
1,742,187
-
-
-
-
-
2. Equity instrume nts
-
-
-
-
-
-
X
X
X
X
X
X
-
-
3. UCITS
-
-
-
-
-
-
X
X
X
X
X
X
-
-
4. Financing
-
-
-
-
-
-
-
-
-
-
-
-
-
-
B. Derivative instr uments
-
-
X
X
X
X
X
X
X
X
X
X
-
-
419,262
-
-
-
3,934,201
-
1,742,187
-
-
-
-
-
6,095,650
1. Due to customers
324,896
-
-
-
3, 889,717
-
1,743,109
-
-
-
-
-
5,957,722
2. Due to banks
94, 424
-
-
-
51,564
-
-
-
-
-
-
-
145,988
419,320
-
-
-
3,941,281
-
1,743,109
-
-
-
-
-
6,103,710
( 8,060)
1. Debt instruments
Total assets
5,752,196
5,752,196
C. Associated liabilities
Total liabilities
net value 31.12.2015
(58)
-
-
-
(7,080)
-
(922)
-
-
-
-
-
net value 31.12.2014
281
-
-
-
33,531
-
(6,293)
-
-
-
-
-
Legend:
A = Financial assets transferred and fully recognised (carrying amount)
B = Financial assets transferred and partially recognised (carrying amount)
C = Financial assets transferred and partially recognised (entire amount)
B. Financial assets transferred and fully derecognised with recognition of the continuous involvement
There are no financial assets transferred and fully derecognised with recognition of the continuous involvement to report.
231*
UBI Banca - Notes to the Financial Statements
X
X
X
5,724,677
X
27,519
E.4 Covered bond operations
Covered bond programme for €15 billion – “Residential Programme”
The objectives
In 2008 the Management Board of UBI Banca passed a resolution to proceed to implement a
structured programme for the issuance of covered bonds designed to produce benefits in terms of
funding while containing the cost at the same time.
In detail, the Management Board performed the following:






it identified the objectives of the programme;
it identified the basic structure of an operation to issue covered bonds in the light of the
legislation and explained and examined the main elements, including the portfolio of loans,
the criteria for selecting them, the structure of the financial transaction and the relative tests;
it assessed and approved the impacts and the organisational, IT and accounting changes that
would be required. These changes were performed to ensure proper risk management by the
Parent and also by the single banks participating. Account was also taken, in drawing up the
procedures, of the requirements set by regulations issued by the Bank of Italy;
assessed the risks connected with the operation to issue covered bonds;
it assessed the organisational and operating structure of the special purpose entity concerned
in order to ensure that the contracts involved in the operation contained clauses that would
guarantee the proper and efficient performance of the functions of the special purpose entity
itself;
it assessed the legal aspects through an in-depth examination of the parties and contract
documents used, with particular attention paid to the nature of the guarantees given by the
special purpose entity and the relations between the issuing bank, the originator banks and
the special purpose entity.
The main objectives of the programme are as follows:
-
-
the acquisition of long-term institutional funding at more competitive costs than funding
acquired using alternative instruments such as the EMTN programmes or securitisation
transactions;
access through the issuance of covered bonds to specialist investors who currently do not
invest in the funding instruments used and which may be used by the UBI Banca Group.
The structure
The basic structure of the operation to issue covered bonds involved the performance of the
following activities:



one bank (the originator) transfers a set of assets with determined characteristics to a special
purpose entity to form a separate set of assets termed a “cover pool”. However, in compliance
with international accounting standards in force, those assets are not derecognised from the
financial statements of the originator bank;
the originator bank (acting here as a financing bank) grants a subordinated loan to the
special purpose entity designed to fund the purchase of the assets by the entity;
the bank (the issuing bank) issues covered bonds backed by a primary, unconditional and
irrevocable guarantee given by the special purpose entity to the sole benefit of the holders of
the covered bonds and the hedging counterparties involved in the transaction. The guarantee
232*
UBI Banca - Notes to the Financial Statements
is backed by all the assets transferred to the special purpose entity and which form part of
the cover pool.
In the context of the procedures described above, the UBI Banca Group launched a covered bond
programme (hereafter the “CBP”) with a ceiling on issuances of €10 billion which was increased in
2014 to €15 billion. The structure that was adopted also allows the transfer of the portfolios
which constitute the segregated assets of the special purpose entity from more than one originator
bank.
To achieve this, a special purpose entity, UBI Finance Srl was formed, in accordance with Law No.
130/1999, 60% held by UBI Banca25, which as the guarantor of the issue performed by UBI
Banca acquired a portfolio of residential mortgages transferred to it from network banks of the
Group, which participated in the programme both as originator banks and as financing banks.
These were added to in 2013 with UBI Banca as an originator and financing bank, which as the
Parent, also fills the role of master servicer, calculation agent and cash manager for the operation.
UBI Banca then delegated responsibility for servicing activity, consisting of collecting payments
and managing relations with customers for the portfolio transferred by each originator (except for
positions reclassified as bad loans (previously termed “non-performing”), handled by the Problem
Loans and Credit Recovery Area of the Parent), to the originator banks as sub-servicers.
The role of account bank and paying agent is filled by The Bank of New York Mellon (Luxembourg)
Sa, while the representative of the bondholders is BNY Corporate Trustee Services Limited.
The role of asset monitor, explicitly required by regulations for this type of transaction, is carried
out by BDO Italia Spa.
This €15 billion programme is also assigned ratings by two agencies: Moody’s, used since the first
issuance under the programme, and DBRS, which replaced Fitch in the last quarter of 2015.
25
The company is consolidated by UBI Banca in the Consolidated Annual Report for the Group, according to the
accounting standards in force.
233*
UBI Banca - Notes to the Financial Statements
A summary of the main features of the structure of UBI Banca’s covered bond programme is given
below.
A). Covered Bonds. UBI Banca issues covered bonds under the programme;
B). Bond loan. In order to allow the funding acquired on institutional markets from the issue of
covered bonds to flow back to the originator banks, these banks may issue bonds and the right to
require subscription of them by UBI Banca, within the limits of their quota of participation in the
programme. These bonds shall have the same maturity as the covered bonds and a yield
established on the basis of the Bank’s funding policies.
C). Subordinated loan. In order to fund the purchase of mortgages by the special purpose entity,
the originator banks grant subordinated loans to it. The yield on these loans is calculated as a
“premium” or “extra spread” equal to the amount of the interest received, which remains in the
accounts of the special purpose entities once priority amounts in the chain of payments have
been deducted, relating to items such as the expenses incurred by the entity, payments to swap
counterparties and allocations to the “reserve account”.
D). Swaps to hedge interest rate risk. If the covered bonds are issued at a fixed rate, UBI Banca
may hedge the interest rate risk by entering into swap contracts with market counterparties,
thereby transforming the exposure to a variable rate. These swaps lie outside the perimeter of the
covered bond programme and the decision to use them is made with a view to interest rate risk
management as part of the Parent’s ALM.
E). Liability swaps: also a liability swap contract is entered into between UBI Banca and UBI
Finance for each covered bond fixed rate issue. These are designed to protect against interest rate
risk, which might affect the cash flows received from the special purpose entity and the amounts
due from the special purpose entity to investors (fixed rate coupons on the covered bonds) in the
event of default by UBI Banca and the need by the special purpose entity to intervene to pay the
coupons to the investors.
The notional amount of the liability swaps must be sufficient to hedge the interest rate risk
related to the floating interest rate return portion of the underlying segregated assets of UBI
Finance, since the fixed-rate component of the mortgage portfolio constitutes a partial natural
hedge in itself with respect to fixed-rate covered bonds. The percentage of hedging required by the
rating agencies using liability swaps is 70% of the covered bonds (at fixed rate) issued.
234*
UBI Banca - Notes to the Financial Statements
The structure of the liability swaps only requires the exchange of cash flows between UBI Banca
and the special purpose entity in the event of default by UBI Banca or when UBI Banca assigns a
swap contract to another eligible counterparty. For full information we report that the liability
swap involves margin account obligations for UBI Banca. In order to diversify the counterparty
risk BNP Paribas Securities Services was selected for the role of account bank for those margin
deposits.
F). Current accounts. The programme involves a complex system of current accounts to pay and
receive the cash flows involved in the operation. A series of accounts were opened in the name of
the special purpose entity for each originator bank as follows:

collection account at UBI Banca linked to each originator bank into which sums
received are paid consisting of interest and principal on the portfolios of each originator, and,
where applicable, other assets transferred to the special purpose entity under the programme (e.g.
eligible assets and top-up assets);

interest account with Bank of New York Mellon, London Branch linked to each
originator bank into which all interest paid into the collection accounts is paid on a daily basis
and also all amounts paid to the special purpose entity by the counterparties of the swap
contracts;

principal account with The Bank of New York Mellon, London Branch linked to each
originator bank into which all the principal repayment amounts paid into the collection account
will be paid on a daily basis;

a reserve fund account, with The Bank of New York Mellon, London Branch into
which interest accruing on the covered bonds is paid monthly in order to guarantee the payment
of current coupons;

an expense account, into which the amounts required to meet the expenses of the
special purposes entity are paid, drawn from interest accounts, in proportion to the quota of
participation in the programme of each originator bank.
Effectiveness tests.
The Effectiveness tests are performed monthly on the whole cover pool and separately on the
portfolios transferred by each originator, in order to determine the financial integrity of each
bank’s portfolio. As required by the regulations, because it is a multioriginator programme, with
cross-collateralisation of the originator banks’ portfolios, the only valid test for investors is that
performed on the whole cover pool, while the tests performed on the individual portfolios are used
to determine the integrity of each originator’s portfolio for the purposes of cross-collateralisation
between the different originator banks.
In detail:

the nominal value test verifies whether the nominal value of the loans in the
transferred portfolio is greater than the nominal value of the covered bonds issued. In order to
ensure an adequate degree of over collateralisation in the portfolio, while the covered bonds are
considered at their nominal value, the loans in the portfolio are weighted on the basis of the
relative collateral backing them and the total amount is further reduced by an asset percentage.
The calculation of the nominal value test also takes account of potential additional risks, such as
for example “set-off” risk or “commingling risk”26;

the net present value test verifies whether the present value of the loans remaining
in the portfolio is greater than the present value of the covered bonds issued;
26
See the preceding notes.
235*
UBI Banca - Notes to the Financial Statements

the interest cover test verifies over a twelve month time frame whether the interest
received and held in accounts and the cash flows from interest to be received net of the entity’s
expense is greater than the interest to be paid to the holders of the covered bonds;

the amortisation test (similar to the nominal value test, but only performed if UBI
Banca is downgraded by rating agencies);

the top-up assets test verifies whether, before UBI Banca defaults, the total amount
of additional assets and liquidity is not 15% greater than the nominal value of the loans
remaining in the portfolio transferred, in compliance with the Ministry of the Economy and
Finance and Bank of Italy instructions.
If all the tests27 are passed simultaneously then the special purpose entity may proceed to pay
all the parties involved in the programme, including the originator banks as the lenders of the
subordinated loan, in the order of priority indicated in the “payment chain”.
However, if the results of the tests are negative, then the contract states that the UBI Banca
Group must increase the collateral of the portfolio by transferring new mortgages to it and that is
“top up” with extra assets. Failure to pass the tests, once the time limit allowed for the Group to
add assets has passed, results in an “issuer event of default” with a consequent enforcement of
the guarantee issued by UBI Finance. In this event the originator banks would only receive the
repayments of the subordinated loans granted after the redemption of the covered bonds by the
special purpose entity and within the limits of the remaining funds.
In accordance with the relative regulations, on a quarterly basis the asset monitor checks the
accuracy and precision of the calculations carried out by the calculation agent, UBI Banca, in
order to carry out the effectiveness tests.
Organisational action and control procedures
Summary information is given below on the new organisational structure and operational
processes for the covered bond programme approved in 2013. This information was prepared on
the basis of that contained in the Programme Report submitted to the Management Board on
15.1.2013, 28.1.2014 and 24.2.2015 and also that given in Group Circular No. 415/2013 “Review
of processes related to the first covered bond programme”.
The organisational system currently adopted in the UBI Group for the structuring and
management of covered bond programmes is the result of a general organisation revision carried
out in 2013, following the development of management and issuance processes experimented with
in the first years of the life of the programme.
A distinction is made in that system between two areas of activity:
1) the first area concerns the activity needed to set up a programme, carried out once only in
the period preparatory to the issuance of bonds, which can be described as follows: proposals for
the structuring of a new programme are assessed by the competent internal committees of UBI
Banca and the underlying general policies are approved by the Supervisory Board. This is
followed by the identification of external parties who must assist the Parent in the structuring
and issuance of the programme (legal firms, arrangers, asset monitors, rating agencies). The
assets which will form part of the portfolio are then defined together with the contracts relating
to the operation for units internal and external to the Bank. Subsequently, the following is
carried out:
form the special purpose entity and carry out the activities needed to transfer assets to that
entity and segregate the assets of the cover pool appropriately;
assign a rating to the programme, inclusive of the site visit by the rating agency;
present a compliance report for the programme.
The calculation of the first three tests mentioned above is consistent with the requirements contained in
supervisory regulations (Bank of Italy Circular No. 285/2013) on the question of the partial weighting of collateral
positions which should exceed the loan to value ratio set (80% for residential mortgages and 60% for commercial
mortgages). See below Property Risk Guarantees.
27
236*
UBI Banca - Notes to the Financial Statements
2)
the second area, on the other hand, regards recurring activities for management,
monitoring and control, which are organised in four macro processes described as follows:
A. annual planning: a plan for the issuance of covered bonds to be carried out during the year
is drawn up by the competent units at UBI Banca as part of a more general definition of the
procedures to cover liquidity requirements on the basis of strategic policies and in accordance
with the growth and risk objectives set by the competent corporate bodies. The annual planning of
issuances is followed by an annual analysis stage designed to set the amount of the collateral that
the Group must be able to post in the future in order to back existing and planned future
issuances. After internal committees have carried out verifications, the Management Board of the
Parent is then called upon, annually, to decide on:
transfers of new mortgages by originator banks participating in the programme and possible
repurchases;
new covered bond issuances.
B. periodic transfers of assets to the special purpose entity. Portfolios of assets to be
transferred are identified in detail on the basis of the guidelines defined in the previous point.
With the support of legal firms and arrangers – where necessary – the competent units at the
Parent prepare the contracts, carry out prior controls and proceed to comply with the technical
requirements needed for the segregation and proper management of the portfolios by the servicers
and subservicers. The originator banks also top up the subordinated financing as necessary in
relation to the amount of the new portfolios transferred;
C. issuance of new covered bonds: as part of the issuance planned in accordance with the
previous points, the competent units of UBI Banca decide on the characteristics of the issuance
syndicated by the dealer banks participating in the issue. The issuance then commences with the
acquisition of orders from institutional investors, which concludes with the official announcement
of quantities and issue prices. This is followed by the preparation of the legal documentation with
the support of legal advisors and arrangers and it will be signed by the parties involved before the
value date of the issuance.
D. ongoing management of the issuance programme: this general process governs the activities
needed for the daily management of the portfolios transferred to the SPE, the settlement of the
cash flows, implementation of the controls required by regulations and the preparation of
compulsory disclosures and other reports to markets28. The main sub-processes, carried out by
the competent units of the Parent (which acts as the master servicer, calculation agent and cash
manager for the programme) or of the network banks (as subservicers), are as follows:
daily settlement of cash flows from the cover pool;
monthly performance of effectiveness tests;
calculation of the sequence of monthly payments and liquidity management;
preparation of periodic reports to the various counterparties, investors and rating agencies
(in compliance with disclosure requirements requested by supervisory regulations for the
prudential treatment of the CBPs);
settlement of coupons on outstanding issues (on an annual or interim basis depending on
the issue);
determination (half yearly) of the controls set by regulations to monitor requirements to
ensure the quality and integrity of the cover assets transferred and assessment of any need to
repurchase assets no longer eligible.
28
In this respect, as already reported recent amendments to supervisory regulations (Bank of Italy Circular No.
285/2013 already mentioned) extended control duties not only to include the competent internal risk control units
of the issuer but also the asset monitor for controls of the completeness, accuracy and appropriateness of the
information made available to investors and also to ensure compliance with the loan to value ratio limits at the
time of transfer and when property values are updated (see Property Guarantee Risks below).
237*
UBI Banca - Notes to the Financial Statements
Internal Group rules and regulations specify the persons involved in the individual activities and
the processes outlined above in detail.
The risks connected with the operation:
In 2012 and 2013 the Bank revised its analysis of the risks identified with the programme when
it was approved in June 2008 and it prepared a new map of those risks. The risks identified,
listed below, are derived from the current regulatory framework (EU and Italian) and they are
based on the current methodologies used by rating agencies.
The different types of risk are attributable to the following four general categories:
1.
Risk of UBI Banca downgrade, which includes the risk relating to the swap
contracts to which UBI Banca is a counterparty and the risk relating to the account bank
activities performed by UBI Banca, because in both cases a downgrade could result in UBI Banca
losing its status as an “eligible” counterparty in the roles just mentioned. More specifically, with
regard to the account bank role, if a downgrade involved the transfer of the SPEs current
accounts to a third-party company, the failure to immediately transfer sums received onto those
accounts would represent a “commingling risk”, account of which is taken when calculations for
regulatory tests are carried out;
2.
Risk relating to the underlying mortgages (collateral). The issuance of covered
bonds bases its rating on the credit enhancement provided by the portfolio of mortgages
transferred to back the special purpose entity. The criteria used by the rating agencies require the
amount of the mortgage portfolio that provides the guarantee to be maintained at levels higher
than the value of the bonds issued (known as over-collateralisation). A decrease in the level of
over-collateralisation would lead primarily to a downgrade of the operation and, in the most
serious cases, to a default of the issuer, if the minimum level provided for in the contracts were
not guaranteed and/or the regulatory tests were not passed. Various mechanisms are provided
within the programme to address these risks. They include the following: a nominal value test and
various degrees of over-collateralisation, designed to ensure that the special purpose entity is able
to fully guarantee the covered bonds issued even in the event of some defaults on the underlying
assets; the ability to inject liquidity in order to guarantee the issues (within the limits of 15% of
the total amount of the assets held by the special purpose entity); the ability to also insert assets
with a higher rating in the cover pool and finally, with regard to redemption by the special
purpose entity (or by UBI Banca in the event of its default) of the capital maturing, the maturity of
the covered bonds may be extended by one year (termed a “soft bullet maturity”).
In any event, the units responsible at UBI Banca periodically verify the adequate availability of
mortgages among the assets of Group banks in order to ensure the necessary overcollateralization for covered bonds already issued and for those to be issued in the coming year.
3.
Risks connected with continuous management of the programme: the
programme involves various third parties (asset monitors, bank account providers, trustees,
possible swaps providers), for each of which there is a risk of default. Counterparty replacement
rules have been put in place to limit that risk if determined events occur.
The programme also requires continuous management of matters which include servicing
activities, investment activities, the management of possible swap contracts, the calculation of
regulatory tests and the production of reports. The adoption of the organisational model reported
in the preceding pages led to a further improvement in the management of processes and the
related operating risks. This increased the oversight and control points as a result of a more
detailed official assignment of responsibilities to the competent units of the Parent.
4.
Legal risks, which, due to the particular multi-originator structure of the UBI
Banca programme, include the risk of cross-collateralisation. The participation of a number of
originator banks in the programme mean that all the transferor banks are subordinated creditors
on an equal basis of the special purpose entity and above all, they assume the obligation to top up
the portfolio to the levels specified by the tests if these are failed, even if the failure is not caused
by the assets for which they are responsible. To mitigate that risk, the contract documents state
that if the transferor bank required to top up assets does not meet that obligation, in the first
instance the Parent will be required to top up the cover pool until the required level of over238*
UBI Banca - Notes to the Financial Statements
collateralization is reached, while the transferor banks will only be required to top up the cover
pool if the Parent fails to do so.
In order to take account, amongst other things, of regulatory developments that had occurred,
when the 2015 Programme Report was drawn up two further risk Categories were formally
introduced as follows:
5.
Tax risks, divided in turn into two sub-categories:
a) tax impacts on the transfer of assets: the law which introduced covered bonds (Law No.
130/1999, Art. 7 bis) stated that transfers of assets to special purpose entities are considered as
not taking place from a tax viewpoint where, amongst other things, the purchase price and the
last amount recognised for the transferred assets in the financial statements of the transferor
bank are identical. Since transfers of assets generally take place at a time subsequent to the
reporting date of the last approved financial statements of the transferor banks, the prevalent
interpretation adopted was that in order to determine the transfer price, reference has to be made
to the carrying amount, reduced by the capital repayments received in the meantime and
increased by the interest accruing as at the date of transfer in order to take account of the natural
financial changes in the assets transferred29.
b) VAT on servicing fees: according to one recent interpretation put forward by the tax
authorities on some occasions, fees for the management and receipt of repayments on loans not
classified as bad loans (previously termed “non-performing loans”) paid by the special purpose
entity to the transferor bank which acts as the servicer or sub-servicer for the covered bond
programme should be subject to VAT at the ordinary rate instead of being VAT exempt. That
interpretation is based on a Court of European Justice ruling according to which the management
and receipt of repayments on loans should be generally classified as “credit recovery activity”, and
as such subject to VAT, regardless of whether the loans managed are bad loans or not and this
gave rise to demands being made to the UBI Group and also to other major banking groups who
use the same instruments with similar structures. The UBI Group is fully convinced of the proper
nature of its conduct and has appealed against the tax assessment notices received in relation to
this matter.
6.
Property Guarantee Risk: in accordance with legislation and regulations the bank
updates the values of the properties that back the assets transferred on a half yearly basis. The
risk in question lies in the possible decrease in the value of the guarantees which can lead to total
or partial exclusion of the loan from the calculation of tests. The updated value of the guarantees
is in fact used to calculate the current loan to value ratio (the remaining debt as a ratio of the
current value of the guarantee) and if that indicator is greater than the 80% limit, then the part of
the loan above that limit cannot be used in the calculation of the tests. Furthermore, if the ratio of
the updated value of the guarantee to that of the most recent property appraisal is lower than
70%, the loan must be totally excluded from the calculation tests unless a new appraisal is
carried out within three months. In this respect we also report that in addition to the periodic
controls carried out in accordance with regulations by the asset monitor, Risk Control Units in
the UBI Group check the loan to value ratios monthly and organisational processes result in
prompt reporting of problem situations to the competent units for the necessary corrective action
to be taken.
29
See Supervisory Regulations for banks – Circular No. 285/2013 – Part Three – Chapter 3
239*
UBI Banca - Notes to the Financial Statements
History of the UBI Banca Residential Covered Bond Programme
In the context of the procedures described above, the UBI Banca Group launched a ten-billion
euro programme for the issue of covered bonds in July 2008, with the first transfers of mortgages
performed by two banks in the Group, Banco di Brescia and Banca Regionale Europea, for a total
amount, as at that time, of approximately €2 billion. Subsequently, in the years 2008 – 2010, all
the Group’s network banks joined the programme progressively transferring portions of their
assets. Further transfers of assets were then concluded in each of the following years.
More specifically, in 2015, two transfers of assets were carried out, the first on 1st May 2015,
totalling €757.5 million and the second with effect from the 1st November 2015, for a total of
€737.7 million. The distribution of assets transferred among the originator banks is as follows:
ASSETS
TRANSFERRED
TO UBI FINANCE
– YEAR 2015
(figures in
thousands of euro)
Transfer on
01.05.2015
Transfer on
01.11.2015
Total transfers
2015
TOTAL
TRANSFERS
originated
by BRE
originated
by Banco di
Brescia
originated
by Banca
Popolare di
Bergamo
originated
by Banca
Popolare di
Ancona
originated
by UBI
Banca
originated by
Banca
Popolare di
Commercio e
Industria
originated
by Banca
Carime
originated
by Banca di
Valle
Camonica
originated
by IW Bank
757,456
147,162
255,737
0
0
0
250,238
104,319
0
0
737,722
0
0
475,607
180,425
38,128
0
0
25,250
18,312
1,495,178
147,162
255,737
475,607
180,425
38,128
250,238
104,319
25,250
18,312
As at 31st December 2015 the cover pool of mortgages for the issues, which for accounting
purposes is recognised within the assets of each originator bank, amounted to a total of €14.459
billion in terms of the remaining principal debt.
The table below gives the distribution of the portfolio (remaining principal debt) for each
originator bank and the total by class of credit quality as at 31.12.2015, according to the
classification used in the documentation for the CBP:
TYPE OF LOAN –
figures as at
31.12.2015
(Remaining
principal debt - in
thousands of euro)
TOTAL
PORTFOLIO
originated
by BRE
originated
by Banco di
Brescia
originated
by Banca
Popolare di
Bergamo
originated
by Banca
Popolare di
Ancona
originated
by UBI
Banca
originated by
Banca
Popolare di
Commercio e
Industria
originated
by Banca
Carime
originated
by Banca di
Valle
Camonica
originated
by IW Bank
Performing loans
12,120,138
1,354,959
2,189,826
2,968,091
1,089,242
1,562,683
1,736,909
821,578
201,980
194,870
Loans in arrears
1,776,603
223,913
363,342
353,968
179,933
235,714
246,390
110,102
39,696
23,545
Cover pool (1+2)
13,896,741
1,578,872
2,553,168
3,322,059
1,269,175
1,798,397
1,983,299
931,680
241,676
218,415
562,585
78,573
110,244
113,068
38,674
71,086
75,653
49,374
14,874
11,039
14,459,326
1,657,445
2,663,412
3,435,127
1,307,849
1,869,483
2,058,952
981,054
256,550
229,454
Defaulted loans
Total UBI Finance
cover pool
In 2015 this portfolio generated total payments received of approximately €1.9 billion,
distributed as follows among the portfolios of the different originators:
PAYMENTS
RECEIVED
(Figures in
thousands of
euro)
Payments
received in
2015
TOTAL
PORTFOLIO
originated
by BRE
1,900,183
223,660
originated
by Banco
di Brescia
363,161
originated by
Banca
Popolare di
Bergamo
originated
by Banca
Popolare di
Ancona
435,667
177,180
240*
originated
by UBI
Banca
originated
by Banca
Popolare
di
Commerci
oe
Industria
Originated by
Banca
Carime
originated
by Banca
di Valle
Camonica
196,682
279,757
154,954
34,470
originated
by IW Bank
34,652
UBI Banca - Notes to the Financial Statements
Within the ceiling on the issues set under the programme, which as already mentioned was
recently raised from an initial €10 billion to €15 billion, UBI Banca has issued covered bonds for a
total of €10.514 billion (bonds in issue as that 31.12.2015). The table below gives details of the
individual issues:
Number in order (*)
ISIN NUMBER
Name
1
IT0004533896
UBI BANCA 3.625% CB due
23/9/2016
2
IT0004558794
3
IT0004599491
4
Issue date
Expiration date
Share capital (**)
Market
23/09/2009
23/09/2016
1,000,000,000
Institutional
investors
16/12/2009
16/12/2019
1,000,000,000
Institutional
investors
UBI BANCA TV CB due
30/04/2022
30/04/2010
30/04/2022
147,727,276
private - EIB
IT0004619109
UBI BANCA 3.375% CB due
15/09/2017
15/09/2010
15/09/2017
1,000,000,000
Institutional
investors
6
IT0004682305
UBI BANCA 5.250% CB due
28/01/2021
28/01/2011
28/01/2021
1,000,000,000
Institutional
investors
7
IT0004692346
UBI BANCA 4.500% CB due
22/02/2016
22/02/2011
22/02/2016
750,000,000
Institutional
investors
8
IT0004777444
UBI BANCA TV CB due
18/11/2021
18/11/2011
18/11/2021
166,600,000
private - EIB
12
IT0004966195
UBI BANCA 3.125% CB due
14/10/2020
14/10/2013
14/10/2020
1,500,000,000
Institutional
investors
14
IT0004992878
UBI BANCA 3.125% CB due
05/02/2024
05/02/2014
05/02/2024
1,000,000,000
Institutional
investors
15
IT0005002677
UBI BANCA TV CB due
05/03/2019
05/03/2014
05/03/2019
700,000,000
17
IT0005067076
UBI BANCA 1.25% CB due
07/02/2025
07/11/2014
07/02/2025
1,000,000,000
Institutional
investors
18
IT0005140030
UBI BANCA 1%CB due
27/01/2023
27/10/2015
27/01/2023
750,000,000
Institutional
investors
19
IT0005155673
UBI BANCA 22 TV CB due
14/12/2022
14/12/2015
14/12/2022
500,000,000
Retained
UBI BANCA 4.000% CB due 1
Total issues outstanding as at 31/12/2015
Retained
10,514,327,276
Notes:
(*) Only issues outstanding at the reporting date are shown. For full information we report with regard to the series closed down that issues
numbers 9, 10 and 11 (retained) were closed down due to natural maturity in February 2014. Issues numbers 13 and 16 (both retained) were
closed down early in 2015, while issue number 5 (public) matured naturally in October 2015.
(**) For bonds subject to amortisation, the remaining nominal value is given as at the reporting date.
As at 31st December 2015 all the bonds listed above had received an Aa2 rating from Moody’s and
AA (low) from DBRS.
Relations with the special purpose entity UBI Finance
As already reported above, in compliance with IFRS international accounting standards the
accounting treatment employed requires non-derecognition of the loans transferred to the special
purpose entity in the balance sheets of the originator banks. Similarly, the income statement and
valuation entries relating to the loans transferred but not derecognised continued to appear in the
241*
UBI Banca - Notes to the Financial Statements
specific items of expense and income in the income statement as if the transfer operation had not
been carried out.
Consistent with that accounting treatment, other asset and liability and income statement items
relating to the bank and the special purpose entity are stated as balancing entries in the
“residual” items of the balance sheet and income statement (“150 Other assets” in the balance
sheet and “190 other operating income/expense” in the income statement) and the relative
balance is shown among the net asset/liability and expense/income items of the bank in relation
to the special purpose entity in addition to those already recognised in relation to the loans
transferred but not derecognised stated in a separate item.
Reference may be made to the relative sections of the notes on financial statements for the
amounts of the items mentioned above, recognised within other assets and other operating
income/expense. In compliance with regulations, the pages that follow report detailed information
on the main stakes held by the bank in the special purpose entity UBI Finance in relation to the
€15 billion covered bond programme.
Assets transferred – carrying amount
The table below shows the amount for the securitised portfolio transferred by the originator banks
to the special purpose entity UBI Finance, according to the amount shown under the asset item
“70 Loans and advances to customers” in the balance sheet. The classification follows the
distribution of the transferred portfolio on the basis of the balance sheet classification of each
originator.
BANCA
BANCO
POPOLARE
DI
DI
BRESCIA
BERGAMO
BANCA
POPOLARE
DI
ANCONA
BANCA
POPOLARE
BANCA
COMMERCIO
CARIME
ED
INDUSTRIA
TYPE OF LOAN
– carrying amount
as at 31.12.2015
(thousands of euro)
TOTAL
Performing loans
13,456,296
1,489,117
2,395,214
3,247,272
1,237,452
1,836,839
1,929,942
892,502
Performing pastdue exposures
770,953
117,443
205,115
116,879
65,037
70,522
103,145
51,541
24,662
16,609
16,899
2,748
2,851
1,937
2,862
3,604
2,014
361
185
337
328,461
45,394
68,696
50,125
27,261
68,708
37,618
18,267
7,534
4,858
163,701
24,300
28,708
46,496
6,232
1,042
26,561
21,581
4,789
3,992
14,736,310
1,679,002
2,700,584
3,462,709
1,338,844
1,980,715
2,099,280
984,252
Non-performing
(previously termed
“deteriorated”)
past-due
exposures
Unlikely to pay
loans
Bad loans
(previously termed
“non-performing”)
TOTAL assets
transferred to UBI
Finance
BANCA
REGIONALE
EUROPEA
UBI
BANCA
BANCA DI
VALLE
CAMONICA
IW
BANK
219,973 207,986
257,143 233,782
See the previous section for the amount of the assets transferred during the year.
Subordinated Loan
As already indicated earlier, at the time of each transfer of assets, each transferor bank, in its
capacity as a financing bank, grants to the special purpose entity, a portion of the subordinated
loan designed to finance the payment by the SPE itself of the purchase price of the assets
transferred in its capacity as originator bank.
The table below shows the amounts of the loans granted by the originator banks to UBI Finance
against the transfers for the year 2015:
242*
UBI Banca - Notes to the Financial Statements
Subordinated
loans
granted in
2015 (in
thousands of
euro)
Loan granted
for
01/05/2015
transfer
Loan granted
for
01/11/2015
transfer
Total granted
in 2015
originated
originated
originated
originated
originated
originated
by Banca
by Banca
by Banca
by Banca originated
by IW
Popolare
Popolare di by Banca
di Valle
Popolare
by UBI
Carime
Bank
di
Commercio
Camonica
di Ancona
Banca
Bergamo
e Industria
TOTAL
TRANSFERS
originated
by BRE
originated
by Banco
di Brescia
756,374
146,941
254,558
0
0
0
250,139
104,736
0
0
739,419
0
0
475,471
181,027
39,463
0
0
25,134
18,324
1,495,793
146,941
254,558
475,471
181,027
39,463
250,139
104,736
25,134
18,324
for an amount of the subordinated loans outstanding granted as at 31.12.2015 by each originator
to UBI Finance as follows (in terms of remaining principal debt):
Amount of
subordinated
originated
originated
originated
originated
loans as at
originated by Banca
by Banca
originated
originated
originated
by Banca originated
by Banca
31/12/2015
TOTAL
by Banco Popolare
Popolare di by Banca
by IW
by BRE
Popolare
by UBI
di Valle
(in
di Brescia
di
Commercio
Carime
Bank
di Ancona
Banca
Camonica
thousands of
Bergamo
e Industria
euro)
Remaining
principal
14,631,836 1,668,986 2,685,557 3,457,462 1,315,640 1,945,464
2,078,706
986,039
258,621
235,361
debt
The carrying amount of the subordinated loans as at 31.12.2015 forms part of the net balance of
the amounts recognised within item “150 Other Assets” in the balance sheet, and represents the
maximum exposure to loss resulting from participation by the banks (originators and financers) in
the covered bond programme in the event that the guarantee given by the special purpose entity
and the cash flows from the portfolios transferred as collateral were used to the reimburse
investors and would not therefore be available, wholly or in part, to return the subordinated loans
to the originators. The ability to repay that loan depends on the receipt of repayments on the
loans in the segregated portfolio transferred to the special purpose entity by each bank.
Consistent with the accounting treatment adopted, the underlying portfolio recognised within item
“70 Loans and advances to customers”, in the balance sheet was posted to directly as indicated
above.
In consideration of the performance of repayments by the issuer UBI Banca, no risk in this
respect currently exists.
The interest for 2015 on those subordinated loans, which as mentioned, is recognised within item
“190 Other operating income/expense” in the income statement, amounted to a total of €324
million for all the Group banks participating in the programme, while the amount of the loans
repaid in the year drawn from the capital repayments available to the special purpose entity
totalled €2.418 billion.
243*
UBI Banca - Notes to the Financial Statements
The following tables show the aforementioned sums by single originator bank:
Subordinated
loans –
interest paid
and accruing
in 2015 (in
thousands of
euro)
Total interest
in 2015
TOTAL
originated
by BRE
originated
by Banco
di Brescia
324,323
35,953
58,014
originated
by BRE
originated
by Banco
di Brescia
290,200
470,300
Subordinated
loans – sums
repaid
in
2015
(in
thousands of
euro)
TOTAL
Total
repayments
in 2015
2,418,000
originated
originated
originated
originated
by Banca
originated
originated
by Banca
by Banca originated
by Banca
Popolare di by Banca
by IW
Popolare
Popolare
by UBI
di Valle
Commercio
Carime
Bank
di
di Ancona
Banca
Camonica
e Industria
Bergamo
67,780
31,454
46,807
44,400
30,120
4,685
5,110
originated
originated
originated
originated
originated
by Banca
originated
by Banca
by Banca
by Banca originated
by IW
Popolare di by Banca
Popolare
di Valle
by UBI
Popolare
Bank
Commercio
Carime
di
Camonica
Banca
di Ancona
e Industria
Bergamo
581,800
234,350
213,100
362,650
185,500
39,000
41,100
Servicing activities – Sub-servicing
The Parent received fees totalling €1.183 million from the special purpose entity UBI Finance for
servicing activities performed in 2015 relating to the management of payments received and
relations with customers with regard to the portfolio transferred and the management of accounts
classified as bad loans (previously termed “non-performing”), while fees received in its capacity as
master servicer and calculation agent amounted to €619 thousand. At the same time the network
banks received fees totalling €4.860 million from the special purpose entity UBI Finance for subservicing activities performed in 2015 relating to the management of payments received and
relations with customers with regard to the portfolios transferred.
The amount for the fees relating to the year for servicing and sub-servicing activities is
recognised within item “190 Other operating income/expense” in the income statement.
Five-billion euro covered bond programme – “Retained programme”
In the first half of 2012, a new covered bond programme was structured for the issue of new
bonds to be retained, and that is to be subscribed by UBI Banca itself, which will be used as
collateral for posting with the European Central Bank in order to strengthen the pool of assets
eligible for refinancing available to the Group.
To achieve this, a specific new special purpose entity, named UBI Finance CB2 Srl was formed,
in which UBI Banca also holds a 60% stake30, to function as the guarantor of the issues of the
new series of covered bonds. Mainly commercial mortgages and, in addition, residential mortgages
eligible according to national legislation and regulations, but not covered by the rating agency
methodologies for the first programme, are transferred by Group banks to UBI Finance CB2 Srl.
In fact, as opposed to the residential programme, the retained programme was initially structured
without assessment by the rating agencies and therefore it benefited only from the senior rating of
the Parent UBI Banca.
30
The company is consolidated by UBI Banca in the Consolidated Annual Report for the Group, according to the
accounting standards in force.
244*
UBI Banca - Notes to the Financial Statements
At the end of 2013 the agency Fitch also assigned a rating to the five-billion euro programme.
The rating assigned was BBB+. In 2015 the agency Fitch was replaced by the agency DBRS,
which assigned a rating of “A (low)”, which was unchanged at the reporting date.
UBI Banca will be able to issue covered bonds under that programme for a total amount, from
time to time, of not greater than €5 billion.
Again, for this second programme, the Management Board has:
 identified the objectives of the programme and of the first issuance;
 identified the basic structure of the operation, examining the initial loan portfolio and the
criteria used to select it as well as the financial structure of the transaction and the tests;
 assessed and approved the impacts and the organisational, IT and accounting changes
that would be required, considering that those actions had already been carried out to
ensure proper risk management for the first programme;
 assessed the risks connected with the operation to issue covered bonds;
 assessed the organisational and operating structure of the special purpose entity;
 assessed the legal aspects of the programme.
Reference is made to what has already been reported above concerning the residential
programme for that which regards the structural, organisational and risk aspects of the
operation31, while here we report only those points where the five-billion euro programme differs
from that which has already been reported:
A. liability swaps: at present no fixed rate issuances have been made and therefore no liability
swap contracts exist between the special purpose entity and third party counterparties;
B. current accounts. Interest and principal collection accounts for the second programme were
initially opened with UBI Banca International, but they were transferred in August 2015 to BNP
Paribas Securities Services – London Branch.
C. the liquidity generated by the programme. In consideration of the type of operation performed
by the Group with the retained programme, designed to increase the quantity of assets available
for refinancing operations with the Eurosystem, no issuance of bonds was put in place to channel
funds back to the originator banks. If, on the other hand, “public” issuances should be made, as
indicated above, each originator bank will be given the right, within the limits of its share of
participation in the programme, to issue bonds and the right to ask for them to be subscribed by
UBI Banca in the same way as occurs for the fifteen-billion euro programme.
History of the UBI Banca Retained Covered Bond Programme
The initial cover pool to back the issues of the retained programme was transferred in two
tranches in the first half of 2012 and it consisted of assets totalling €3 billion. The following
banks transferred assets: Banca Regionale Europea, Banca Popolare di Ancona, Banca Popolare
Commercio ed Industria, Banca di Valle Camonica Banca Popolare di Bergamo, Banco di Brescia,
Banco di San Giorgio (which was then merged into Banca Regionale Europea) and Banca Carime,
while UBI Banca and IW Bank made the first transfer of assets in December 2015.
Two new transfers were concluded in 2015, the first on 1st June and the second on 1st
December, and they involved loans totalling €469.3 million.
31
For full information we report that the loan to value ratio limit for the eligibility of the guarantees is 60% for
commercial mortgages.
245*
UBI Banca - Notes to the Financial Statements
The table below gives details of the amounts transferred in 2015 for each originator:
ASSETS TRANSFERRED
TO UBI FINANCE CB2 –
YEAR 2015 (thousands of
euro)
originated by
Banca
Popolare di
Commercio e
Industria
originate
d by
Banca
Carime
0
42,129
0
0
0
0
12,675
0
27,365
31,751
25,414
64,291
12,675
42,129
27,365
31,751
25,414
originated by
Banca
Popolare di
Bergamo
originated
by Banca
Popolare di
Ancona
originate
d by UBI
Banca
155,980
0
64,291
0
0
59,511
50,195
155,980
59,511
TOTAL
TRANSFERS
originate
d by
BRE
Transfer on 01/06/2015
312,595
50,195
Transfer on 01/12/2015
156,716
Total transfers 2015
469,311
originated
by Banco
di Brescia
originated
by Banca
di Valle
Camonica
originat
ed by IW
Bank
As with the first programme, the portfolio transferred continued to be recognised as assets on
the books of each originator bank and totalled €3.196 billion as at 31st December 2015.
The table below gives the distribution of the portfolio (remaining principal debt) for each
originator bank and the total by class of credit quality as at 31.12.2015.
TYPE OF
LOAN –
figures as at
31.12.2015
(Remaining
principal
debt - in
thousands of
euro)
Performing
loans
Loans in
arrears
Cover pool
(1+2)
Defaulted
loans
Total UBI
Finance
CB2
portfolio
originated
by BRE
originated
by Banco
di Brescia
originated
by Banca
Popolare
di
Bergamo
originated
by Banca
Popolare
di Ancona
originated
by UBI
Banca
originated
by Banca
Popolare di
Commercio
e Industria
originated
by Banca
Carime
originated
by Banca
di Valle
Camonica
originated
by IW
Bank
2,507,999
446,248
519,263
573,876
344,683
11,421
252,853
237,168
98,355
24,132
424,001
73,093
98,224
69,810
115,750
1,057
29,134
23,017
12,898
1,018
2,932,000
519,341
617,487
643,686
460,433
12,478
281,987
260,185
111,253
25,150
263,941
41,541
50,782
32,584
64,649
0
22,243
39,062
13,080
0
3,195,941
560,882
668,269
676,270
525,082
12,478
304,230
299,247
124,333
25,150
TOTAL
PORTFOLIO
Also for the portfolio transferred to UBI Finance CB2, the master servicer, UBI Banca, delegated
responsibility for servicing activity to the originator banks as sub-servicers. This consisted of
collecting payments and managing relations with customers for the portfolio transferred by each
originator except for loans from UBI Banca’s own portfolio and positions reclassified as bad loans
(previously termed “non-performing”), handled by the Problem Loans and Credit Recovery Area of
the Parent.
The total sums received in payments on the portfolio in 2015 are given below:
PAYMENTS
RECEIVED
(thousands
of euro)
Payments
received in
2015
TOTAL
PORTFOLIO
originated
by BRE
originated
by Banco
di Brescia
originated
by Banca
Popolare
di
Bergamo
originated
by Banca
Popolare
di Ancona
originated
by UBI
Banca
488,249
89,787
114,425
99,733
69,894
222
originated
by Banca
Popolare di
Commercio
e Industria
originated
by Banca
Carime
originated
by Banca
di Valle
Camonica
originated
by IW
Bank
51,287
45,731
16,853
317
Two covered bond issuances were made under the programme in 2012 and in 2014, which was
added to by a new issuance in the second half of 2015. The total bonds issued amounted to
€2.250 billion nominal remaining as at 31.12.2015. At the date of this report no public issuances
have been made and therefore all outstanding issues to-date have been “retained” in the UBI
Banca portfolio.
246*
UBI Banca - Notes to the Financial Statements
Details are given below of the individual issues:
Name
Issue Date
Maturity
date
Number in order
ISIN Number
Principal (*)
1
IT0004818701
UBI BANCA TV CB2 due 28/05/2018 28/05/2012 28/05/2018
900,000,000 Retained
2
IT0004864663
UBI BANCA TV CB2 due 29/10/2022 29/10/2012 29/10/2022
500,000,000 Retained
3
IT0005002842
UBI BANCA TV CB2 due 05/03/2019 05/03/2014 05/03/2019
200,000,000 Retained
4
IT0005122418
UBI BANCA TV CB2 due 14/07/2021 14/07/2015 14/07/2021
650,000,000 Retained
Market
Total issues outstanding as at 31/12/2015
2,250,000,000
Note: (*) For bonds subject to amortisation, the remaining nominal value is given as at the reporting date.
Relations with the special purpose entity UBI Finance CB2
Assets transferred – carrying amount
The table below shows the amount for the securitised portfolio transferred by the originator banks
to the special purpose entity UBI Finance CB2, according to the amount shown under the asset
item “70 Loans and advances to customers” in the balance sheet. The classification follows the
distribution of the transferred portfolio on the basis of the balance sheet classification of each
originator.
TYPE OF LOAN –
carrying amount as
at 31.12.2015
(thousands of euro)
Performing loans
Performing past-due
exposures
Non-performing
(previously termed
“deteriorated”) pastdue exposures
Unlikely to pay
loans
Bad loans
(previously termed
“non-performing”)
Total UBI Finance
CB2 securitised
portfolio
BANCA
POPOLARE
COMMERCIO
E INDUSTRIA
BANCA
REGIONALE
EUROPEA
BANCO DI
BRESCIA
BANCA
POPOLARE
DI
BERGAMO
BANCA
POPOLARE
DI
ANCONA
2,755,573
481,924
554,080
616,965
446,401
12,932
266,889
247,414
104,374
24,594
202,051
40,712
65,942
28,919
27,284
252
16,745
14,501
6,872
824
8,703
1,952
2,736
466
1,865
0
551
1,093
40
0
149,135
24,537
29,833
16,055
34,489
0
15,366
20,589
8,266
0
81,034
10,852
15,803
13,265
21,476
0
5,157
11,808
2,673
0
3,196,496
559,977
668,394
675,670
531,515
13,184
304,708
295,405
122,225
25,418
TOTAL
UBI
BANCA
BANCA
CARIME
BANCA DI
VALLE
CAMONICA
IW
BANK
See above for the amount of the assets transferred during the year.
247*
UBI Banca - Notes to the Financial Statements
Subordinated Loan
The table below shows the amounts of the loans granted by the originator banks to UBI Finance
CB2 against the transfers for the year 2015:
Subordinated
loans granted in
2015 (thousands
of euro )
TOTAL
TRANSFERS
originated
originated
by Banca
by Banco
Regionale
di Brescia
Europea
originated
originated
originated
originated
by Banca
by Banca
originated
originated
by Banca originated
by Banca
Popolare
Popolare di by Banca
by IW
Popolare
by UBI
di Valle
di
Commercio
Carime
Bank
di Ancona
Banca
Camonica
Bergamo
e Industria
Loan granted
for 01/06/2015
transfer
314,027
50,287
156,608
0
65,109
0
42,023
0
0
0
Loan granted
for 01/12/2015
transfer
157,662
0
0
59,380
0
13,406
0
27,535
31,609
25,732
Total granted in
2015
471,689
50,287
156,608
59,380
65,109
13,406
42,023
27,535
31,609
25,732
for an amount of the subordinated loans outstanding granted as at 31.12.2015 by each originator
to UBI Finance CB2 as follows (in terms of remaining principal debt):
Amount of
subordinated loans
as at 31/12/2015
(thousands of euro)
TOTAL
Remaining
principal debt
3,245,267
originated
originated
by Banca
by Banco
Regionale
di Brescia
Europea
567,950
683,478
originated
originated
originated
originated
by Banca
originated
originated
by Banca
by Banca originated
by Banca
Popolare di by Banca
by IW
Popolare
Popolare
by UBI
di Valle
Commercio
Carime
Bank
di
di Ancona
Banca
Camonica
e Industria
Bergamo
684,975
534,005
13,406
307,701
301,477
126,543
25,732
As for the programme for €15 billion, the carrying amount of the subordinated loans as at
31.12.2015 forms part of the net balance of the amounts recognised within item “150 Other
Assets” in the balance sheet, and represents the maximum exposure to loss resulting from
participation by the banks (originators and financers) in the covered bond programme in the event
that the guarantee given by the special purpose entity and the cash flows from the portfolios
transferred as collateral were used to the reimburse investors and would not therefore be
available, wholly or in part, to return the subordinated loans to the originators. The ability to
repay that loan depends on the receipt of repayments on the loans in the segregated portfolio
transferred to the special purpose entity by each bank. Consistent with the accounting treatment
adopted, the underlying portfolio recognised within item “70 Loans and advances to customers”,
in the balance sheet was posted to directly as indicated above.
For the “retained” programme also, in consideration of the performance of repayments by the
issuer UBI Banca, no risk in this respect currently exists.
The interest for 2015, on those subordinated loans, which as mentioned, is recognised within
item “190 Other operating income/expense” in the income statement, amounted to a total of
€58.4 million for all the Group banks participating in the programme, while the amount of the
loans repaid in the year drawn from the capital repayments available to the special purpose entity
totalled €440.5 million.
248*
UBI Banca - Notes to the Financial Statements
The following tables show the aforementioned sums by single originator bank:
Subordinated
loans –
interest paid
and accruing
in 2015
(thousands of
euro)
Total interest
in 2015
Subordinated
loans – sums
repaid in 2015
(thousands of
euro)
Total
repayments in
2015
originated
originated
by Banca
by Banco
TOTAL Regionale
di Brescia
Europea
58,414
TOTAL
440,550
10,933
12,128
originated
originated
by Banca
by Banco
Regionale
di Brescia
Europea
82,060
originated
originated
originated
originated
by Banca
originated
originated
by Banca
by Banca originated
by Banca
Popolare di by Banca
by IW
Popolare
Popolare
by UBI
di Valle
Commercio
Carime
Bank
di
di Ancona
Banca
Camonica
e Industria
Bergamo
11,289
10,498
24
4,700
7,000
1,803
39
originated
originated
originated
originated
by Banca
by Banca
originated
originated
by Banca originated
by Banca
Popolare
Popolare di by Banca
by IW
Popolare
by UBI
di Valle
di
Commercio
Carime
Bank
di Ancona
Banca
Camonica
Bergamo
e Industria
102,840
90,930
61,210
0
48,180
40,310
15,020
0
Servicing activities – Sub-servicing
The Parent received fees totalling €304 thousand from the special purpose entity UBI Finance
CB2 for servicing activities performed in 2015 relating to the management of payments received
and relations with customers with regard to the portfolio transferred and the management of
accounts classified as bad loans (previously termed “non-performing”), while fees received in its
capacity as master servicer and calculation agent amounted to €322 thousand. At the same time
the network banks received fees totalling €1.182 million from the special purpose entity UBI
Finance CB2 for sub-servicing activities performed in 2015 relating to the management of
payments received and relations with customers with regard to the portfolios transferred.
The amount for the fees relating to the year for servicing and sub-servicing activities is
recognised within item “190 Other operating income/expense” in the income statement.
F. Models for the measurement of credit risk
With regard to the measurement of credit risk, the UBI Group has developed a portfolio credit risk
model by using an Algorithmics PCRE – portfolio credit risk engine – which considers the total
risk of a credit portfolio by modelling and capturing the component that results from the
correlation of counterparty defaults, calculating credit losses and capital at credit risk at portfolio
level. The model includes PD and LGD used for supervisory purposes among its input variables.
249*
UBI Banca - Notes to the Financial Statements
Section 2 Market risk
2.1 Interest rate risk and price risk – supervisory trading portfolio
Qualitative information
A. General aspects
Information on general and organisational aspects is given in the corresponding section “interest
rate risk - trading portfolio” in the consolidated report.
The main operational limits for 2015 (including reallocations and any new limits set in the second
half of the year) are as follows:




Maximum acceptable loss for the UBI trading book
Early warning threshold on maximum acceptable loss (MAL)
One day VaR limit for the UBI trading book
Early warning threshold on VaR
€92.5 million
70% MAL
€18.5 million
80% VaR
B. Processes for the management and methods of measurement of interest rate risk and
price risk
See the subsequent section A. “General aspects, procedures for the management and methods of
measurement of interest rate risk”.
250*
UBI Banca - Notes to the Financial Statements
Quantitative information
1.1 Supervisory trading portfolio: distribution by residual maturity (repricing date) of on-balance sheet financial assets and liabilities
and financial derivatives – Denominated in Euro
Type/Residual maturit y
On demand
3 months to 6
months
Up to 3 months
6 months to 1 year
1 year to 5 year s
5 years to 10 years
Indeterminat e
matur ity
Over ten years
1. On-ba lance sheet assets
102
50,005
50,025
-
51,911
268,300
2
-
1. 1 Debt instr uments
102
50,005
50,025
-
51,911
268,300
2
-
-
-
-
-
1,701
-
-
-
102
50,005
50,025
-
50,210
268,300
2
-
- with early r edemption option
- other
1. 2 Other assets
-
-
-
-
-
-
-
-
2. On-ba lance sheet liab ilities
-
359,145
14,844
-
-
-
-
-
2. 1 Repurchase agreements
-
359,145
14,844
-
-
-
-
-
2. 2 Other liabi lities
-
-
-
-
-
-
-
-
( 81,464)
1,623,214
(54,251)
493,137
(147,206)
(320,608)
( 1,290,117)
-
3. 1 With underlying security
-
(5,662)
(480)
460
(48,026)
53,699
-
-
- Options
-
-
-
-
-
-
-
-
- Long positions
-
-
-
-
-
-
-
-
- Short positions
-
-
-
-
-
-
-
-
-
(5,662)
(480)
460
(48,026)
53,699
-
-
- Long positions
-
74,496
11,504
676
2,826
53,699
-
-
- Short positions
-
80,158
11,984
216
50,852
-
-
-
(81,464)
1,628,876
(53,771)
492, 677
(99,180)
(374,307)
(1, 290,117)
-
-
1,836,886
51,359
(1, 803)
(54,873)
(249,706)
(1, 588,278)
-
-
2,005,228
215,922
187, 911
53,610
8,339
1,426
-
3. Financial derivatives
- Other derivatives
3. 2 Without underlying security
- Options
- Long positions
- Short positions
-
168,342
164,563
189, 714
108,483
258,045
1, 589,704
(81,464)
(208,010)
(105,130)
494, 480
(44,307)
(124,601)
298,161
-
- Long positions
163,446
14,959,131
2, 715,098
2,411, 419
8,499,797
6,613,381
1, 560,836
-
- Short positions
244,910
15,167,141
2, 820,228
1,916, 939
8,544,104
6,737,982
1, 262,675
-
- Other derivatives
251*
UBI Banca - Notes to the Financial Statements
1.2 Supervisory trading portfolio: distribution by residual maturity (repricing date) of on-balance sheet financial assets and liabilities
and financial derivatives – Denominated in other currencies
Type/Residual maturity
On demand
3 months to 6
months
Up to 3 months
6 mont hs to 1 ye ar
1 year t o 5 years
5 year s to 10 yea rs
Indet erminate
mat urity
Over ten years
1. On-ba lance sheet assets
-
-
-
-
-
-
-
-
1. 1 Debt instr uments
-
-
-
-
-
44,645
-
-
- with early r edemption option
-
-
-
-
-
-
-
-
- other
-
-
-
-
-
44,645
-
-
1. 2 Other assets
-
-
-
-
-
-
-
-
2. On-ba lance sheet liab ilities
20
45,311
-
-
-
-
-
-
2. 1 Repurchase agreements
20
45,311
-
-
-
-
-
-
2. 2 Other liabi lities
-
-
-
-
-
-
-
-
3. Financial derivatives
-
( 161,517)
(21,219)
9,574
367
( 46,386)
-
-
3. 1 With underlying security
-
-
-
-
-
-
-
-
- Options
-
-
-
-
-
-
-
-
- Long positions
-
-
-
-
-
-
-
-
- Short positions
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
- Long positions
-
-
-
-
-
-
-
-
- Short positions
- Other derivatives
-
-
-
-
-
-
-
-
3. 2 Without underlying security
-
(161,517)
(21, 219)
9,574
367
(46,386)
-
-
- Options
-
-
-
8,428
-
-
-
-
- Long positions
-
102,043
285, 506
295,965
46,045
-
-
-
- Short positions
-
102,043
285, 506
287,537
46,045
-
-
-
- Other derivatives
-
(161,517)
(21, 219)
1,146
367
(46,386)
-
-
- Long positions
-
1, 924,027
33, 928
23,551
62,919
-
-
-
- Short positions
-
2, 085,544
55, 147
22,405
62,552
46,386
-
-
252*
UBI Banca - Notes to the Financial Statements
2. Supervisory trading portfolio: distribution of exposures in equities and share indices by
the principal markets in which they are listed
Listed
Unlist ed
Type of operation/Wher e listed
ITALY
A. Equity instruments
- long positions
- short positions
B. Trades in equity instruments not yet settled
- long positions
- short positions
GERMANY
UN ITED STATES
4,144
436
-
-
4, 144
436
-
-
-
-
-
-
( 4)
-
-
-
6
-
-
-
10
-
-
-
273
-
-
-
273
-
-
-
-
-
-
-
-
35,071
( 25,194)
-
- long positions
-
35,071
-
-
- short positions
-
-
25,194
-
C. Other der ivatives on equity instruments
- long positions
- short positions
D. Derivatives on share indices
3. Supervisory trading portfolio: internal models and other methods of sensitivity analysis
The graph below shows the changes in VaR that occurred in 2015 for the UBI Banca trading
portfolios.
8,000,000
7,000,000
6,000,000
5,000,000
4,000,000
3,000,000
2,000,000
1,000,000
0
253*
UBI Banca - Notes to the Financial Statements
VaR by risk factor calculated on the UBI Banca trading book as at 31st December 2015 is given
below.
Change in market risk: daily market VaR for UBI Banca in 2015
.
Trading book of the UBI Banca Group
31.12.2015
Currency risk
Interest rate risk
Equity risk
Credit risk
Volatility risk
Diversification effect(1)
Total
457,013
573,844
2,736,345
909,554
158,995
(1,284,111)
3,551,640
(1) The diversification effect is due to the imperfect correlation between the different risk factors
present in the Group’s portfolio.
Backtesting analyses
Backtesting analysis is designed to test the predictive power of the VaR model adopted. It uses an
actual profit and loss calculated on the basis of returns on positions in the portfolio on the
previous day.
The backtesting analysis for the UBI Banca trading book in 2015 is given below.
UBI Banca Trading Book: Backtesting 2015
6
Millions
4
2
0
-2
-4
-6
-8
-10
02/01
23/01
13/02
06/03
27/03
17/04
08/05
29/05
19/06
10/07
31/07
254*
21/08
11/09
02/10
23/10
13/11
04/12
25/12
UBI Banca - Notes to the Financial Statements
Stress test analyses
The Group has a stress testing programme designed to analyse the reaction of portfolios to risk
factor shocks with the objective of verifying the ability of the regulatory capital to absorb very
large potential losses and to identify possible measures needed to reduce risks and conserve the
capital itself.
Stress tests based on theoretical shocks consist of specially created extreme shifts in interest rate
(short, medium and long term), credit spread, exchange rate, equity price and volatility curves.
The table below gives the results of the theoretical stress tests performed on the UBI Banca
portfolios.
The effect of theoretical shocks on the UBI Banca trading and banking books
Data as at 31/12/2015
UBI TRADING BOOK REG
31/12/2015
UBI BANKING BOOK
LIM 31/12/2015
TOTAL UBI
31/12/2015
Change in NAV
Change in NAV
Change in NAV
Risk Factors IR
Shock
298
Shock +1bp
0.00% -
558,312
0.00%
-558,014
0.00%
0.00%
557,818
0.00%
557,846
0.00%
-0.58% - 13,030,524
-0.09%
-15,875,039
-0.11%
Risk Factors IR
Shock
28
Shock -1bp
Risk Factors IR
Shock
Bear Steepening
-
2,844,515
Risk Factors IR
Shock
Bull steepening
1,352,129
0.28%
3,424,680
0.02%
4,776,809
0.03%
282,941
-0.06%
4,714,895
0.03%
4,431,953
0.03%
4,746,761
0.97%
14,262,656
0.10%
19,009,417
0.13%
1,533,531
0.31%
1,782,725
0.01%
3,316,256
0.02%
-1,533,531
-0.31% -
1,782,725
-0.01%
-3,316,256
-0.02%
291,535
0.00%
240,696
0.00%
Risk Factors IR
Shock
Bear Flattening
-
Risk Factors IR
Shock
Bull Flattening
Risk Factors Equity
Shock
+10%
Risk Factors Equity
Shock
-10%
Risk Factors Volatility
Shock
+20%
-
50,839
-0.01%
Risk Factors Volatility
Shock
-20%
4,725
0.00% -
238,528
0.00%
-233,804
0.00%
3,912,171
0.80% -
521,404
0.00%
3,390,767
0.02%
521,404
0.00%
-5,544,710
-0.04%
Risk Factors Forex
Shock
+15%
Risk Factors Forex
Shock
-15%
-
6,066,114
-1.23%
Risk Factors Credit Spread
Shock
- 17,878,986
-3.64% - 770,573,413
-5.32% -788,452,399
-5.26%
Flight to quality scenario
- 17,387,873
-3.54% - 772,074,385
-5.33% -789,462,259
-5.27%
255*
UBI Banca - Notes to the Financial Statements
The analysis shows the heightened sensitivity of the UBI Banca portfolios to credit spread shocks
(consistent with the presence of Italian government securities and corporate securities) and to
interest rate shocks (consistent with the presence of bonds and interest rate derivatives within
UBI Banca’s portfolios).
The system of controls for the trading book portfolios are also used for some of the portfolios in
the banking book.
The graph below shows the changes in daily VaR that occurred in 2015 for the UBI Banca
banking book portfolios.
Change in market risk: daily market VaR for the UBI Banca banking portfolios in 2015
150,000,000
140,000,000
130,000,000
120,000,000
110,000,000
100,000,000
90,000,000
Market VaR does not include VaR on securities classified as held to maturity and the VaR on hedge funds.
.
VaR by risk factor calculated on the entire UBI Banca banking book as at 31st December 2015 is
given below.
UBI Banca banking book
31.12.2015
Currency risk
Interest rate risk
Equity risk
Credit risk
Volatility risk
Diversification effect(1)
Total
45,701
5,802,975
108,656,152
444,914
141,049
115,347,417
(1) The diversification effect is due to the imperfect correlation between the different risk factors
present in the Group’s portfolio.
256*
UBI Banca - Notes to the Financial Statements
2.2 Interest rate and price risk – Banking portfolio
The banking portfolio consists of all those financial instruments, assets and liabilities, not
included in the trading portfolio, dealt with in section 2.1.
Qualitative information
A. General aspects, management processes and methods of measurement of interest rate
risk and price risk
Interest rate risk consists of changes in interest rates which have the following effects:
•
on net interest income and consequently on the profits of the bank (cash flow risk);
•
on the net present value of assets and liabilities, which has an impact on the present
value of future cash flows (fair value risk).
The control and management of structural interest rate risk - fair value and cash flow – is
performed in a centralised manner by the Parent within the framework, defined annually, of the
Policy to Manage Financial Risks of the UBI Banca Group, which identifies measurement methods
and models and limits or early warning thresholds in relation to net interest income and the
economic value of the Group.
Measurement, monitoring and reporting of interest rate risk exposure is performed at
consolidated and individual level by the Capital & Liquidity Risk Management Area of the Parent,
which performs the following on a monthly basis:
•
a sensitivity analysis designed to measure changes in the value of assets on the
basis of parallel shocks on interest rate levels for all the time buckets of the curve;
•
a simulation of the impact on net interest income for the current year by means of a
static gap analysis (i.e. assuming that the positions remain constant during the period),
considering the effect of elasticity on demand deposits.
On the basis of the periodic reports produced, the ALM service of the Parent Bank takes
appropriate action to prevent the limits and early warning thresholds from being exceeded.
Exposure to interest rate risk is measured by using gap analysis and sensitivity analysis models
on all those financial instruments, assets and liabilities, not included in the trading book, in
accordance with supervisory regulations.
Sensitivity analysis of economic value includes an estimate of the impacts resulting from the early
repayment of mortgages and long-term loans, regardless of whether early repayment options are
contained in the contracts.
This is accompanied by an estimate of the change in net interest income. The analysis of the
impact on net interest income is over a time horizon of twelve months, with account taken of both
the variation in the profit on demand items (inclusive of viscosity phenomena) and that variation
for items to held to maturity. This analysis also includes an estimate of the impact of
reinvesting/refinancing maturing interest flows.
The 2015 Policy to Manage Financial Risks of the UBI Banca Group sets a target level for the
sensitivity of term and on demand items represented by the behaviour model equal to 7.5% of the
separate company regulatory capital and an early warning threshold of 10% (threshold set by the
supervisory authority based on the interest rate risk in the banking book). The amount to
compare with the early warning threshold is the absolute figure for the negative sensitivity
resulting from the application of the two different interest rate scenarios (parallel shock of +/-100
b.p. of the yield curve).
257*
UBI Banca - Notes to the Financial Statements
Compliance with individual limits is pursued by Group member companies by means of hedging
derivative contracts entered into with the Parent. UBI Banca may then close the position with
counterparties outside the Group, acting in accordance with strategic policies and within the
consolidated limits set by the governing bodies.
Further information is given in the corresponding sub-section of the Notes to the Consolidated
Financial Statements which may be consulted.
B. Fair value hedging
In order to reduce exposure to adverse changes in fair value (fair value hedges) due to interest rate
risk, hedges had been taken out as at 31st December 2015 using financial derivative instruments.
In detail outstanding hedges were as follows:

specific hedges on fixed rate available-for-sale securities amounting to approximately €10.59
billion nominal;

specific hedges on financing amounting to approximately €22 million nominal;

macro hedges on financing amounting to approximately €24 million nominal;

specific hedges on bonds amounting to approximately €18.55 billion notional.
The derivative contracts used are of the interest rate swap and cap type.
Activity to test the effectiveness of hedges is performed by the Financial, Operational and
Structural Balance Risk Control Area of the Parent. Tests for effectiveness are performed, in
compliance with international accounting standards, prospectively when a hedge is first
implemented followed by monthly prospective and retrospective tests.
C. Cash flow hedging
As at 31st December 2015 UBI Banca had an outstanding cash flow hedge for approximately €30
million nominal.
258*
UBI Banca - Notes to the Financial Statements
Quantitative information
1.1 Banking portfolio: distribution by residual maturity (repricing date) of financial assets and liabilities – Denominated in euro
Type/ Residual maturity
1. On-ba lance sheet assets
On demand
3 months to 6
months
U p t o 3 mont hs
6 mont hs t o 1 year
1 year to 5 year s
5 yea rs to 10 years
Indet erminate
mat urity
Over ten years
9,657,659
13,356,715
5,423,358
1,525,451
13,990,942
8,323,551
2,399,991
-
161,233
4,823,888
1,938, 100
195,660
8,663,363
7,466, 624
1, 778,588
-
1,409
163,651
2, 835
10,245
27,114
31, 453
-
-
159,824
4,660,237
1,935, 265
185,415
8,636,249
7,435, 171
1, 778,588
-
1. 2 Financing to banks
2,026,111
2,099,941
17, 712
162,804
3,989,112
-
-
-
1. 3 Customer finance
7,470,315
6,432,886
3,467, 546
1, 166,987
1,338,466
856, 927
621,403
-
1. 1 Debt instr uments
- with early redemption option
- other
- current accounts
- other f inancing
- with early r edemption option
816,794
-
-
-
-
464
-
-
6,653,521
6,432,886
3,467, 546
1, 166,987
1,338,466
856, 463
621,403
-
141,159
2,663,859
403, 755
1, 085,376
1,197,219
286, 545
600,056
6,512,363
3,769,028
3,063, 791
81,610
141,247
569, 919
21,347
-
3,508,742
23,706,510
6,837,324
5,006,940
14,386,921
3,940,750
9,344
-
2. 1 Due to customers
835,379
5,973,152
160, 512
11,848
5,107
8, 193
9,306
-
- current accounts
824,718
-
-
-
-
-
-
-
10,661
5,973,152
160, 512
11,848
5,107
8, 193
9,306
-
- other
2. On-ba lance sheet liab ilities
- other payables
- with early r edemption option
-
-
-
-
-
-
-
-
10,661
5,973,152
160, 512
11,848
5,107
8, 193
9,306
-
2,381,325
9,478,683
1,228, 134
1, 495,330
-
-
-
-
1,851,679
-
-
-
-
-
-
-
- other payables
529,647
9,478,683
1,228, 134
1, 495,330
-
-
-
-
2. 3 Debt instr uments
291,748
8,254,675
5,448, 678
3, 499,762
14,381,814
3,932, 557
38
-
271
339,189
14
54
358
1, 536
38
-
291,477
7,915,487
5,448, 664
3, 499,708
14,381,456
3,931, 021
-
-
289
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
289
-
-
-
-
-
-
-
- other
2. 2 Due to ba nks
- current accounts
- with early redemption option
- other
2. 4 Other liabi lities
- with early redemption option
- other
3. Financial derivatives
2,152
( 12,070,669)
6,605,212
2,307,988
5,917,326
(1,743,808)
( 1,232,466)
3. 1 With underlying security
-
-
(6)
1,779
136
(216, 274)
100
-
- Options
-
-
(6)
1,779
136
(216, 274)
100
-
+ Long positions
-
-
-
1,779
148
93, 435
105
-
+ Short positions
-
-
6
-
12
309, 710
5
-
- Other derivatives
-
-
-
-
-
-
-
-
+ Long positions
-
-
-
-
-
-
-
-
+ Short positions
-
-
-
-
-
-
-
-
3. 2 Without underlying security
2,152
(12,070,669)
6,605, 218
2, 306,210
5,917,191
(1,527, 534)
(1, 232,567)
-
- Options
2,152
(940,301)
(32, 493)
1, 009,832
(39,189)
-
-
-
2,167
52,547
-
1, 211,777
201,941
-
-
-
+ Long positions
+ Short positions
15
992,848
32, 493
201,945
241,130
-
-
- Other derivatives
-
(11,130,368)
6,637, 711
1, 296,378
5,956,379
(1,527, 534)
(1, 232,567)
-
+ Long positions
-
7,879,867
6,652, 281
1, 333,442
9,868,191
3,859, 003
-
-
+ Short positions
-
19,010,235
14, 570
37,064
3,911,811
5,386, 537
1, 232,567
-
111,207
(112,044)
-
837
-
-
-
-
+ Long positions
1,240,138
6,255
-
837
-
-
-
-
+ Short positions
1,128,931
118,300
-
-
-
-
-
-
4. Other off-balance sheet it ems
259*
UBI Banca - Notes to the Financial Statements
1.2 Banking portfolio: distribution by residual maturity (repricing date) of financial assets and liabilities – Denominated in other
currencies
Type/ Residual maturity
1. On-ba lance sheet assets
On demand
3 months to 6
months
Up t o 3 months
6 mont hs t o 1 year
1 year to 5 year s
5 year s to 10 years
Indete rminate
maturity
Over ten years
148,318
1,072,299
73,295
4,131
56,600
8,473
9,774
-
1,310
-
4, 400
-
46,904
-
-
-
- with early redemption option
502
-
-
-
29,529
-
-
-
- other
808
-
4, 400
-
17,375
-
-
-
1. 1 Debt instr uments
1. 2 Financing to banks
70,411
789,471
27, 195
4,131
-
-
-
-
1. 3 Customer finance
76,597
282,828
41, 700
-
9,697
8,473
9, 774
-
- current accounts
16,324
-
-
-
-
-
-
-
- other f inancing
60,272
282,828
41, 700
-
9,697
8,473
9, 774
-
- with early r edemption option
- other
2. On-ba lance sheet liab ilities
1,170
11,476
1, 259
-
-
-
-
-
59,102
271,351
40, 440
-
9,697
8,473
9, 774
-
427,291
683,155
82,667
-
-
-
-
-
2. 1 Due to customers
25,665
-
-
-
-
-
-
-
- current accounts
25,488
-
-
-
-
-
-
-
177
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
177
-
-
-
-
-
-
-
401,626
683,155
82, 667
-
-
-
-
-
401,424
-
-
-
-
-
-
-
202
683,155
82, 667
-
-
-
-
-
- other payables
- with early r edemption option
- other
2. 2 Due to ba nks
- current accounts
- other payables
2. 3 Debt instr uments
-
-
-
-
-
-
-
-
- with early redemption option
-
-
-
-
-
-
-
-
- other
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
- with early redemption option
-
-
-
-
-
-
-
-
- other
-
-
-
-
-
-
-
-
3. Financial derivatives
-
47,993
(5,424)
-
(103,342)
-
-
-
3. 1 With underlying security
-
-
(5, 424)
-
-
-
-
-
- Options
-
-
(5, 424)
-
-
-
-
-
- L ong positions
-
-
-
-
-
-
-
-
- Short positions
-
-
5, 424
-
-
-
-
-
- Other derivatives
-
-
-
-
-
-
-
-
+ Long positions
-
-
-
-
-
-
-
-
+ Short positions
-
-
-
-
-
-
-
-
3. 2 Without underlying security
-
47,993
-
-
(103,342)
-
-
-
- Options
2. 4 Other liabi lities
-
-
-
-
-
-
-
-
+ Long positions
-
-
-
-
-
-
-
-
+ Short positions
-
-
-
-
-
-
-
-
- Other derivatives
-
47,993
-
-
(103,342)
-
-
-
+ Long positions
-
47,993
-
-
-
-
-
-
+ Short positions
-
-
-
-
103,342
-
-
-
18,915
( 18,915)
-
-
-
-
-
-
18,915
-
-
-
-
-
-
-
-
18,915
-
-
-
-
-
-
4. Other off-balance sheet it ems
+ Long positions
+ Short positions
260*
UBI Banca - Notes to the Financial Statements
2. Banking portfolio: internal models and other methods of sensitivity analysis
The following levels of sensitivity were found for UBI Banca as at 31st December 2015:

in the upward shift in the yield curve scenario (+100 bp), the exposure recorded in terms of
sensitivity was -€34.08 million.

in the downward shift in the yield curve scenario (-100 BP), on the other hand, core
sensitivity of +€160.05 million was found. This exposure is affected by the non-negative constraint
imposed on interest rates (today close to zero) and therefore by the application of a floor on the
shift of the relative curve.
In compliance with policy documents, both levels include modelling of the behavioural profile of
on-demand items according to the internal model estimated.
The indicators are affected by the mergers of Banca 24-7 Spa and Centrobanca Spa into UBI
Banca.
Supervisory regulations also require all intermediaries to measure the impact of exposure to the
risk of a change in interest rates of +/- 200 b.p. If the economic value of a bank falls by over 20%
of its own funds, then the European Central Bank and the Bank of Italy will examine the results
with the bank and they may decide to take appropriate action.
The table below gives the risk measured for UBI Banca in the reference scenario, which as at 31st
December 2015 was one of a parallel shift in the reference rates of +200 bp, shown as a
percentage of total own funds.
Risk indicators - end of period values
31/12/2015
parallel shift of + 200 bp
Reduction in economic value/Own funds
31/12/2014
1.41%
1.93%
The impact as at 31st December 2015, on net interest income assuming a shift of +100 basis
points on the yield curve was -€16.92 million, while if a decrease in interest rates is hypothesised
(-100 bp), the impact on net interest income is estimated at -€0.32 million.
Details are given below of the capital profile by repricing date used as input to the internal model
for calculating exposure to interest rate risk.
Gap data for the period
Repricing gap
Hedging derivatives
Early repayments
Total gap
Millions
8000
6000
4000
2000
0
-2000
-4000
-6000
-8000
-10000
Repricing gap
Hedging derivatives
Early repayments
Total gap
ON-DEMAND
1M
3M
6M
1Y
3Y
5Y
7Y
10Y
15Y
20Y
Longer
126.60
-1,175.42
5,484.39
-531.05
-4,346.43
-6,551.21
-3,107.64
4,821.40
-1,762.70
209.75
519.42
950.85
-
-6,691.02
-8,701.23
589.69
1,113.98
3,672.75
6,186.04
1,091.41
2,745.95
-2.47
-3.01
-2.08
-
3.72
6.76
9.36
15.43
32.94
18.69
15.89
11.41
-16.20
-40.55
-57.45
126.60
-7,866.44
-3,216.84
58.64
-3,232.46
-2,878.46
3,078.40
5,912.81
983.26
207.27
516.41
948.76
261*
UBI Banca - Notes to the Financial Statements
2.3 Currency risk
Qualitative information
A. General aspects, management processes and methods of measuring currency risk
Currency risk is calculated on the basis of the methods recommended by the Bank of Italy and
amounts to 8% of the net foreign exchange position. The latter is calculated as the higher (in
absolute terms) of the sum of the net long positions and the sum of the net short positions
(position for each currency) to which the currency risk implicit in investments in UCITS is added.
B. Currency risk hedging
Information on the analysis of hedging for currency risk is contained in the section on the
analysis of interest rate risk which may be consulted.
Quantitative information
The absorption of capital for currency risk at the end of the year amounted to approximately €17
million.
1. Distribution of assets, liabilities and derivatives by foreign currency in which they are
denominated
Currencies
Items
US DOLLARS
A. Financial ass ets
A.1 De bt instruments
A.2 Equity instrume nts
A.3 Financing to banks
A.4 Financing to customers
A.5 Other financial asse ts
UK STERLING
CANADIAN
DOLLARS
YEN
SWISS FRANCS
OTHER
CURRENCIES
TOTAL
553,042
75,021
7,090
211,802
259,129
-
40,703
22,583
17,979
141
-
5,125
5 ,030
95
-
7,120
7,082
38
-
665,206
639,285
25,921
-
153,783
10,030
143,753
-
1,424,979
97,604
7,090
891,208
429,077
-
7,519
1,134,003
1,108,475
25,528
-
3,778
27,025
26,909
116
-
329
1,307
1 ,305
2
-
537
7,364
7,364
-
3,645
33,342
33,327
15
-
1,046
35,403
35,399
4
-
16,854
1,238,444
1,212,779
25,665
-
566,077
35,746
533,374
497,628
(26,277)
11,025
11,025
(4,112)
3 ,812
3 ,812
(247)
945
945
(636,041)
1,067
1,067
(146,254)
(27,317)
39,335
66,652
(246,854)
8,429
589,558
581,129
- Other de riv atives
+ Long positions
+ Short positions
530,331
1,590,150
1,059,819
(26,277)
86,384
112,661
(4,112)
127 ,833
131 ,945
(24 7)
5,213
5,460
(636,041)
5,558
641,599
(118,937)
25,390
144,327
(255,283)
1,840,528
2,095,811
Total assets
Total liabilities
Balance (+/-)
2,684,085
2,691,450
(7,365)
141,890
150,711
(8,821)
137,099
137,064
35
13,815
13,769
46
675,476
676,008
(532)
219,554
246,382
(26,828)
3,871,919
3,915,384
(43,465)
B. Other ass ets
C. Financial liabilities
C.1 Due to banks
C.2 Due to c ustome rs
C.3 Debt ins trume nts
C.4 Other financial liabilities
D. Other liabilities
E. Financial Derivatives
- Options
+ Long positions
+ Short positions
2. Internal models and other methods of sensitivity analysis.
Information is reported in the corresponding part on “interest rate and price risk” (section 2.1 2.2).
262*
UBI Banca - Notes to the Financial Statements
2.4 Derivative instruments
A. FINANCIAL DERIVATIVES
A.1 Supervisory trading portfolio: notional end of period amounts
Under lying asset s/t ype of derivative
31.12.2015
Over the c ounter
1. Debt instruments and i nterest rates
a) Options
b) Swaps
31.12.2014
Centr al c ounter part ies
Over the counter
Central counterparties
41,344,443
109,777
43, 547, 214
6,381,672
4
7, 195, 389
268, 550
-
34,962,771
-
36, 351, 825
-
c) Forwards
-
-
-
-
d) Futur es
-
109,773
-
268, 550
e) Other
-
-
-
-
-
60,270
-
34, 304
a) Options
-
5
-
125
b) Swaps
-
-
-
-
c) Forwards
-
-
-
-
d) Futur es
-
60,265
-
34, 179
2. Equity instruments and share indices
e) Other
-
-
-
-
5,952,132
-
4, 315, 237
-
2,231,840
-
2, 078, 438
-
-
-
-
-
3,720,292
-
2, 236, 799
-
d) Futur es
-
-
-
-
e) Other
-
-
-
-
45,391
-
36, 869
-
3. Currencies and gold
a) Options
b) Swaps
c) Forwards
4. Commodities
5. Other underlying
Total
-
-
-
-
47,341,966
170,047
47,899,320
302,854
263*
UBI Banca - Notes to the Financial Statements
A.2 Banking portfolio: notional end of period amounts
A.2.1 For hedging
Under lying asset s/t ype of derivative
31.12.2015
Over the c ounter
1. Debt instruments and i nterest rates
a) Options
b) Swaps
31.12.2014
Centr al c ounter part ies
Over the counter
Central counterparties
33,727,051
-
34, 856, 807
-
4,086,274
-
4, 086, 274
-
29,640,777
-
30, 770, 533
c) Forwards
-
-
-
-
d) Futur es
-
-
-
-
e) Other
2. Equity instruments and share indices
-
-
-
-
-
-
-
-
a) Options
-
-
-
-
b) Swaps
-
-
-
-
c) Forwards
-
-
-
-
d) Futur es
-
-
-
-
e) Other
3. Currencies and gold
a) Options
b) Swaps
-
-
-
-
27,674
-
-
-
-
-
-
-
27,674
-
-
-
c) Forwards
-
-
-
-
d) Futur es
-
-
-
-
e) Other
-
-
-
-
4. Commodities
-
-
-
-
5. Other underlying
-
-
-
-
33,754,725
-
34,856,807
-
Total
The table gives the notional amounts for derivative contracts by type of contract. The swap
contracts consist of swaps on interest rates performed mainly to hedge available-for-sale financial
assets and own issue bonds.
264*
UBI Banca - Notes to the Financial Statements
A.2.2 Other derivatives
Under lying asset s/t ype of derivative
31.12.2015
Over the c ounter
1. Debt instruments and i nterest rates
31.12.2014
Centr al c ounter part ies
Over the counter
Central counterparties
-
-
-
-
a) Options
-
-
-
-
b) Swaps
-
-
-
-
c) Forwards
-
-
-
-
d) Futur es
-
-
-
-
e) Other
-
-
-
-
589,018
-
635, 724
-
2. Equity instruments and share indices
a) Options
589,018
-
635, 724
-
b) Swaps
-
-
-
-
c) Forwards
-
-
-
-
d) Futur es
-
-
-
-
e) Other
3. Currencies and gold
-
-
-
-
-
-
-
-
a) Options
-
-
-
-
b) Swaps
-
-
-
-
c) Forwards
-
-
-
-
d) Futur es
-
-
-
-
e) Other
-
-
-
-
4. Commodities
-
-
-
-
5. Other underlying
-
-
-
-
589,018
-
635,724
-
Total
265*
UBI Banca - Notes to the Financial Statements
A.3 Financial derivatives: gross positive fair value - by type of product
Port folio/ty pe of der iva tive
Positive fair value
Po sitive fair value
31.12.2015
31.12.2014
Over the c ounter
A. Super visory trading portfolio
a) Options
b) Interest r ate swaps
Centr al c ounter part ies
Over the counter
Central counterparties
61 6,57 9
647
743, 207
778
2 8,65 4
454
39, 311
80
54 8,21 8
-
683, 739
-
c) Cr oss currency swap s
-
-
-
-
d) Equity swaps
-
-
-
-
3 4,99 5
-
16, 576
-
-
193
-
698
-
e) Forward s
f ) Futur es
g) Other
4,71 2
-
3, 581
59 2,40 9
-
647, 972
-
-
-
-
-
59 2,04 6
-
647, 972
-
36 3
-
-
-
d) Equity swaps
-
-
-
-
e) Forward s
-
-
-
-
f ) Futur es
-
-
-
-
g) Other
-
-
-
-
-
-
-
-
a) Options
-
-
-
-
b) Interest r ate swaps
-
-
-
-
c) Cr oss currency swap s
-
-
-
-
d) Equity swaps
-
-
-
-
e) Forward s
-
-
-
-
f ) Futur es
-
-
-
-
B. Banking portf olio - for hedging
a) Options
b) Interest r ate swaps
c) Cr oss currency swap s
C. Banking portf olio - other derivatives
g) Other
Totale
-
-
-
-
1,208,988
647
1,391,179
778
266*
UBI Banca - Notes to the Financial Statements
A.4 Financial derivatives: gross negative fair value - by type of product
Port folio/ty pe of der iva tive
Negat ive fa ir value
Negative fair v alue
31.12.2015
31.12.2014
Over the c ounter
A. Super visory trading portfolio
a) Options
b) Interest r ate swaps
Centr al c ounter part ies
Over the counter
Central counterparties
60 8,59 3
7
721, 880
300
2 3,36 9
-
36, 953
-
54 6,06 7
-
664, 892
-
c) Cr oss currency swap s
-
-
-
-
d) Equity swaps
-
-
-
-
3 4,44 5
-
16, 459
-
-
7
-
300
-
e) Forward s
f ) Futur es
g) Other
B. Banking portf olio - for hedging
a) Options
b) Interest r ate swaps
4,71 2
-
3, 576
70 0,87 1
-
937, 018
-
-
-
-
-
70 0,87 1
-
937, 018
c) Cr oss currency swap s
-
-
-
-
d) Equity swaps
-
-
-
-
e) Forward s
-
-
-
-
f ) Futur es
-
-
-
-
g) Other
-
-
-
-
-
-
-
-
a) Options
-
-
-
-
b) Interest r ate swaps
-
-
-
-
c) Cr oss currency swap s
-
-
-
-
d) Equity swaps
-
-
-
-
e) Forward s
-
-
-
-
f ) Futur es
-
-
-
-
C. Banking portf olio - other derivatives
g) Other
Total
-
-
-
-
1,309,464
7
1,658,898
300
267*
UBI Banca - Notes to the Financial Statements
A.5 OTC financial derivatives: supervisory trading portfolio: notional amounts, gross positive and negative fair values by
counterparty – contracts not covered by clearing agreements
Contr acts not cover ed by clearing
agreements
Gove rnments and
Central Banks
Other public
authorities
Banks
Fina ncial compa nies
Insurance companies
N on-financial
companies
Other
1) Debt instrument s and int erest r ates
- notional amount
-
-
13,167, 217
10,160, 659
-
1,643,379
-
- positive f air value
-
-
208, 250
27, 492
-
203,720
-
- negative fair value
-
-
2, 287
26, 009
-
1,467
-
- f uture exposure
-
-
75, 082
53, 705
-
16,000
-
- notional amount
-
-
-
-
-
-
-
- positive f air value
-
-
-
-
-
-
-
- negative fair value
-
-
-
-
-
-
-
- f uture exposure
-
-
-
-
-
-
-
- notional amount
-
-
1,260, 084
1,121, 357
594
-
-
- positive f air value
-
-
7, 947
666
-
-
-
- negative fair value
-
-
14, 391
28, 857
12
-
-
- f uture exposure
-
-
9, 739
11, 214
6
-
-
- notional amount
-
-
22, 696
-
-
-
-
- positive f air value
-
-
2, 139
-
-
-
-
- negative fair value
-
-
2, 587
-
-
-
-
- f uture exposure
-
-
2, 318
-
-
-
-
2) Equity instrument s and share indices
3) C urr encies and gold
4) Other securitie s
268*
UBI Banca - Notes to the Financial Statements
A.6 OTC financial derivatives - supervisory trading portfolio: notional amounts, gross positive and negative fair values by
counterparty – contracts covered by clearing agreements
Cont racts covered by clearing agreements
Gover nments and
Central Banks
Other public
authoritie s
Financial
co mpanies
Ba nks
Insurance
compa nies
Non-financ ial
companies
Othe r
1) Debt instrument s and int erest r ates
- notional amount
-
-
14,94 7,7 25
1, 425,463
-
-
-
- positive f air value
-
-
110,8 86
5,676
-
-
-
- negative fair value
-
-
485,5 15
34,887
-
-
-
- notional amount
-
-
-
-
-
-
-
- positive f air value
-
-
-
-
-
-
-
- negative fair value
-
-
-
-
-
-
-
- notional amount
-
-
3,11 5,8 70
454,227
-
-
-
- positive f air value
-
-
3 7,7 46
9,469
-
-
-
- negative fair value
-
-
8,7 57
1,685
-
-
-
- notional amount
-
-
2 2,6 96
-
-
-
-
- positive f air value
-
-
2,5 87
-
-
-
-
- negative fair value
-
-
2,1 39
-
-
-
-
2) Eq uity instrument s and share indices
3) C urr encies and gold
4) Other securitie s
269*
UBI Banca - Notes to the Financial Statements
A.7 OTC financial derivatives: banking portfolio – notional amounts, gross positive and negative fair values by counterparty –
contracts not covered by clearing agreements
Cont racts not cov ered by clear ing
agre ement s
Governments and
C ent ral Banks
Other public
aut horit ies
Banks
Financial companies
Insur ance companies
Non-fina ncial
companies
Other
1) Debt instrument s and int erest r ates
- notional amount
-
-
5,000
-
-
-
- positive f air value
-
-
-
-
-
-
-
- negative fair value
-
-
1,654
-
-
-
-
- f uture exposure
-
-
75
-
-
-
-
- notional amount
-
-
12,372
252,966
253, 019
67, 357
3,304
- positive f air value
-
-
-
-
-
-
-
- negative fair value
-
-
-
-
-
-
-
- f uture exposure
-
-
-
19,371
25, 302
57
197
- notional amount
-
-
27,674
-
-
-
-
- positive f air value
-
-
363
-
-
-
-
- negative fair value
-
-
-
-
-
-
-
- f uture exposure
-
-
1,384
-
-
-
-
-
-
-
-
-
-
-
2) Equity instrument s and share indices
3) C urr encies and gold
4) Other securitie s
- notional amount
- positive f air value
-
-
-
-
-
-
-
- negative fair value
-
-
-
-
-
-
-
- f uture exposure
-
-
-
-
-
-
-
270*
UBI Banca - Notes to the Financial Statements
A.8 OTC financial derivatives: banking portfolio: notional amounts, gross positive and negative fair values by counterparty –
contracts covered by clearing agreements
Cont racts covered by cle aring agreements
Gover nments and
Central Banks
Ot her public
authorit ies
Financia l
compa nies
Banks
Insurance
companie s
Non-financial
companies
Other
1) Debt instrument s and int erest r ates
- notional amount
-
-
26, 505,533
7,216,519
-
-
- positive f air value
-
-
361,888
230,158
-
-
-
- negative fair value
-
-
546,168
153,048
-
-
-
- notional amount
-
-
-
-
-
-
-
- positive f air value
-
-
-
-
-
-
-
- negative fair value
-
-
-
-
-
-
-
- notional amount
-
-
-
-
-
-
-
- positive f air value
-
-
-
-
-
-
-
- negative fair value
-
-
-
-
-
-
-
- notional amount
-
-
-
-
-
-
-
- positive f air value
-
-
-
-
-
-
-
- negative fair value
-
-
-
-
-
-
-
2) Equity instrument s and share indices
3) C urr encies and gold
4) Other securitie s
271*
UBI Banca - Notes to the Financial Statements
A.9 Residual maturity of OTC financial derivatives: notional amounts
Under lying asset /Residua l mat urity
Up to 1 year
A) Supe rvisor y t rading portfolio
1 year t o 5 years
More t han 5 years
Tot al
13,241,888
15,854,720
18,245,359
47,341,967
7,436, 625
15,662, 459
18,245,359
41,344,443
-
-
-
-
5,764, 699
187, 433
-
5,952,132
40, 564
4, 828
-
45,392
8,977,354
14,315,341
11,051,047
34,343,742
8,961, 687
14,287, 257
10,478,106
33,727,050
15, 667
410
572,941
589,018
B. 3 Fina ncial derivatives on exchange r ates and gold
-
27, 674
-
27,674
B. 4 Fina ncial Derivatives on other securities
-
-
-
-
Total 31.12.2015
22,219,242
30,170,061
29,296,406
81,685,709
Total 31.12.2014
11,779,324
42,616,409
28,996,117
83,391,850
A.1 Financial deriva tives on debt instruments and i nterest rates
A.2 Financial deriva tives on equi ty instruments and share indices
A.3 Financial deriva tives on exchange rates and gold
A.4 Financial deriva tives on other securities
B) Banking portfolio
B. 1 Fina ncial derivatives on debt instruments and interest rates
B. 2 Fina ncial derivatives on equities and share indices
272*
UBI Banca - Notes to the Financial Statements
A.10 OTC financial derivatives: counterparty risk/financial risk – Internal models
UBI Banca does not use internal models to measure counterparty risk and financial risk for OTC
financial derivatives.
B. CREDIT DERIVATIVES
B.1 Credit derivatives: end of period notional amounts
UBI Banca has no credit derivative contracts to report.
B.2 OTC credit derivatives: gross positive fair value - by type of product
No OTC credit derivatives with a gross positive fair value were recognised.
B.3 OTC credit derivatives: gross negative fair value - by type of product
No OTC credit derivatives with a gross negative fair value were recognised.
B.4 OTC credit derivatives: gross fair value (positive and negative) by counterparty –
contracts not covered by clearing agreements
No OTC credit derivatives with contracts not covered by clearing agreements were recognised.
B.5 OTC credit derivatives: gross fair value (positive and negative) by counterparty –
contracts covered by clearing agreements
No OTC credit derivatives with contracts covered by clearing agreements were recognised.
B.6 Residual maturity of credit derivatives: notional amounts
UBI Banca has no credit derivative contracts to report.
B.7 Credit derivatives: counterparty risk and financial risk – Internal models
UBI Banca does not use internal models to measure counterparty and financial risk for credit
derivatives.
273*
UBI Banca - Notes to the Financial Statements
C. FINANCIAL AND CREDIT DERIVATIVES
C.1 OTC financial and credit derivatives: net fair value and future exposure by
counterparty
Gover nment s and
Cent ral Banks
Oth er p ublic
auth orities
F in ancial
comp an ies
Ban ks
Insur ance
companies
Non-finan cial
comp anies
Ot her
1) Bilateral agreement financial derivatives
- positive fair value
-
-
156,677
170,314
-
-
-
- negative fair value
-
-
686,150
114,630
-
-
-
- future ex posure
-
-
169,597
52,508
-
-
-
- net counterparty risk
-
-
163,153
51,682
-
-
-
2) Bilateral agreement credit derivatives
- positive fair value
-
-
-
-
-
-
-
- negative fair value
-
-
-
-
-
-
-
- future ex posure
-
-
-
-
-
-
-
- net counterparty risk
-
-
-
-
-
-
-
3) "Cross product" agreements
- positive fair value
-
-
-
-
-
-
-
- negative fair value
-
-
-
-
-
-
-
- future ex posure
-
-
-
-
-
-
-
- net counterparty risk
-
-
-
-
-
-
-
Section 3 Liquidity risk
Qualitative information
A.
General aspects, processes for the management and methods for the measurement of
liquidity risk
Liquidity risk relates to the ability or inability of the Bank to meet its payment obligations and/or
to raise additional funding (funding liquidity risk), or to the possibility that the amount obtained
from the liquidation of some of its assets might be significantly different from the present market
values (asset liquidity risk).
At consolidated and separate company level, liquidity risk is regulated as part of the Financial
Risk Management Policy, which not only sets exposure limits and early warning thresholds, but
also sets rules designed to pursue and maintain structural balance in network banks and product
companies by means of co-ordinated and efficient funding and lending policies.
Finally the objective of the policy is to standardise both the procedures for taking action and the
criteria for identifying rates and charges across all Group member companies, identifying a priori
any specific exceptions there may be.
The following are responsible for liquidity risk management, which is performed centrally on
behalf of the network banks by the Parent:
•
the units that report to the Chief Business Officer (first level management), which monitor
liquidity daily and manage risk on the basis of defined limits;
•
the Capital & Liquidity Risk Management Area (2nd level management), responsible for
measuring summary risk indicators and periodically verifying that limits are observed.
Liquidity risk is monitored, with particular reference to the position in terms of structural
balance, principally by using a liquidity gap model which calculates the net cash flows over time
in order to detect any critical points in the expected liquidity conditions. A target level is set at
individual level of essentially a balance between funding, measured on the basis of the degree of
stability, and loans, measured on the basis of liquidity.
274*
UBI Banca - Notes to the Financial Statements
Further information on Group activities on the interbank market is given in the Management
Report which may be consulted.
275*
UBI Banca - Notes to the Financial Statements
Quantitative information
1.1 Distribution over time by residual contractual maturity of financial assets and liabilities – Denominated in Euro
Items/maturitie s
On-balance sheet asset s
A.1 Government securities
A.2 Other debt instruments
A.3 Units in UC ITS
On demand
1 t o 7 days
7 to 15 days
15 days t o 1
month
1 month to 3
months
3 months to 6
months
6 mont hs t o 1
year
1 year to 5
years
More tha n 5
years
Indeterminate
maturit y
393,310
9,129,278
1,455,950
205,737
956,848
1,551,584
1,614,646
3,726,778
21,219,420
12,885,978
2
-
50,005
-
13,123
198,957
449, 491
7,785,005
7,660,000
-
7,329
-
-
-
90,560
42,442
1,402, 263
5,020,841
662,470
17,576
167,498
-
-
-
-
-
-
-
-
-
A.4 Financing
8,954,449
1,455,950
155,733
956, 848
1,447,901
1, 373,247
1,875, 024
8,413,574
4,563,508
375,735
- B anks
2,025,928
1,193,010
-
6, 310
194,322
98,340
214, 068
4,189,578
2,146
375,735
- C ustomers
6,928,521
262,940
155,733
950, 538
1,253,579
1, 274,907
1,660, 956
4,223,996
4,561,361
-
3,396,082
4,623,252
1,620,276
1,479,257
3,963,268
2,935,755
7,482,203
28,146,155
4,326,186
-
On-balance sheet liabilitie s
B.1 Deposits and current accounts
- B anks
- C ustomers
B.2 Debt i nstruments
B.3 Other liabilities
Off-b alance sheet transa ctions
C.1 Financia l derivatives with exchange of princi pal
- L ong positions
- Short positions
C.2 Financia l derivatives without exchange of principal
- L ong positions
- Short positions
C.3 Deposits and financing to be received
- L ong positions
- Short positions
C.4 Ir revocable commi tments to disburse funds
3,133,723
336,701
50,000
290, 703
340,073
724,443
1,495, 924
-
-
-
2,309,005
336,701
50,000
290, 703
340,073
724,443
1,495, 924
-
-
-
824,718
-
-
-
-
-
-
-
-
-
176,554
134,930
199,853
659, 674
3,354,237
1, 944,897
5,870, 424
19,580,946
4,081,192
-
85,805
4,151,621
1,370,423
528, 880
268,958
266,415
115, 855
8,565,209
244,993
-
(1,004,353)
279,254
(413,390)
(160,824)
439,024
13,746
23,500
1,019,732
(135,284)
-
-
279,727
(415,962)
(47, 868)
387,567
20,431
(4, 845)
(47,984)
(166,144)
-
-
418,703
20,301
1,240, 058
485,785
186,945
193, 519
47,585
143,584
-
-
138,976
436,263
1,287, 925
98,219
166,514
198, 363
95,569
309,728
5,581
(473)
(3,683)
5, 343
31,458
(7,884)
17, 120
-
-
-
550,646
418
1,332
10, 998
63,315
41,778
115, 191
-
-
-
545,065
891
5,015
5, 655
31,858
49,662
98, 071
-
-
118,300
-
-
(118, 300)
-
-
-
-
-
-
118,300
-
-
-
-
-
-
-
-
-
-
-
-
118, 300
-
-
-
-
-
-
(1,128,931)
-
6,255
-
20,000
1,198
7, 281
1,063,336
30,860
-
- L ong positions
-
-
6,255
-
20,000
1,198
7, 281
1,063,336
30,860
- Short positions
1,128,931
-
-
-
-
-
-
-
-
-
697
-
-
-
-
-
3, 945
4,380
-
-
C.6 Financia l guara ntees received
-
-
-
-
-
-
-
-
-
-
C.7 Credit derivatives with exchange of principal
-
-
-
-
-
-
-
-
-
-
- L ong positions
-
-
-
-
-
-
-
-
-
-
- Short positions
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
- L ong positions
-
-
-
-
-
-
-
-
-
-
- Short positions
-
-
-
-
-
-
-
-
-
-
C.5 Financia l guara ntees issued
C.8 Credit derivatives without exchange of principa l
276*
UBI Banca - Notes to the Financial Statements
1.2 Distribution over time of the residual contractual life of financial assets and liabilities – Other currencies
Items/maturitie s
On-balance sheet asset s
A.1 Government securities
A.2 Other debt instruments
A.3 Units in UC ITS
On demand
1 to 7 da ys
15 days to 1
month
7 to 15 days
1 mont h to 3
months
3 months t o 6
months
6 mont hs to 1
year
1 ye ar t o 5 years
Mor e than 5
year s
Indeter minate
maturity
111,199
273,826
45,886
251,812
441,131
29,746
7,247
159,783
102,878
-
-
-
-
-
-
422
-
45, 927
-
533
-
-
-
1, 074
369
1,07 4
43,906
4, 088
-
4, 924
-
-
-
-
-
-
-
-
-
105, 742
273,826
45,886
251,812
440, 057
29,377
5,75 1
115,878
52, 864
-
- B anks
87, 015
250,860
45,886
36,996
439, 812
27,265
4,17 5
-
-
-
- C ustomers
18, 727
22,966
-
214,817
244
2,112
1,57 6
115,878
52, 864
-
On-balance sheet liabilitie s
427,165
79,687
616,823
-
32,175
82,901
-
-
-
-
B.1 Deposits and current accounts
426, 968
79,687
571,512
-
32, 175
82,901
-
-
-
-
401, 480
79,687
571,512
-
32, 175
82,901
-
-
-
-
25, 488
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
197
-
45,311
-
-
-
-
-
-
-
19,380
( 286,624)
399,951
48,334
(389,456)
(27,000)
8,847
(27,307)
-
-
-
(286,624)
418,865
48,334
(388, 478 )
(26,81 9)
9,39 8
(27,307)
-
-
-
90,510
439,289
1, 261,004
94, 124
157,786
300,009
46,368
-
-
A.4 Financing
- B anks
- C ustomers
B.2 Debt i nstruments
B.3 Other liabilities
Off-b alance sheet transa ctions
C.1 Financia l derivatives with exchange of princi pal
- L ong positions
- Short positions
-
377,135
20,423
1, 212,670
482, 602
184,604
290,611
73,675
-
465
-
-
-
(978 )
(181)
(552)
-
-
-
- L ong positions
11, 100
-
-
-
12
76
154
-
-
-
- Short positions
10, 635
-
-
-
990
258
706
-
-
-
18, 915
-
(1 8,915)
-
-
-
-
-
-
-
- L ong positions
18, 915
-
-
-
-
-
-
-
-
-
- Short positions
-
-
18,915
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
C.2 Financia l derivatives without exchange of principal
C.3 Deposits and financing to be received
C.4 Ir revocable commi tments to disburse funds
- L ong positions
-
-
-
-
-
-
-
-
-
-
C.5 Financia l guara ntees issued
- Short positions
-
-
-
-
-
-
-
-
-
-
C.6 Financia l guara ntees received
-
-
-
-
-
-
-
-
-
-
C.7 Credit derivatives with exchange of principal
-
-
-
-
-
-
-
-
-
-
- L ong positions
-
-
-
-
-
-
-
-
-
-
- Short positions
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
-
- L ong positions
-
-
-
-
-
-
-
-
-
-
- Short positions
-
-
-
-
-
-
-
-
-
-
C.8 Credit derivatives without exchange of principa l
277*
UBI Banca - Notes to the Financial Statements
Section 4 Operational risks
Qualitative information
A. General aspects, procedures for the management and methods for the measurement of
operational risk
Operational risk is defined as the risk of incurring losses resulting from inadequate or failed
processes, human resources and internal systems or from exogenous events. These risks include
for example losses resulting from fraud32, human error, business disruption, system failure, nonperformance of contracts and natural disasters. With regard to their financial manifestation this
definition includes legal risk33, model risk34, operational risks that overlap with market risk35 and
operational risks that overlap with credit risk36. The definition of operational risk does not include
reputational risk37 and strategic risk38.
In order to guarantee a risk profile consistent with the risk appetite defined by the Strategic
Supervisory Body, the Group has defined an organisational model based on the combination of
various components identified according to the role filled and by the responsibility assigned in the
organisation chart. The different components are identified centrally at the Parent and locally in
the individual legal entities consistent with the Group’s federal model of organisation.
The model involves centralisation at the Parent of policy-setting functions and of second and third
level internal controls.
Various levels of responsibility have been identified in each legal entity, listed below, assigned on
the basis of the operating area:
Operational Risks Officer (ORO): this is the General Manager for the Parent. In other legal
entities it is either the Managing Director or the General Manager, depending on their corporate
regulations. The Operational Risk Officer is responsible, within his/her legal entity for
implementing the entire operational risk management system as defined by Group policy;
Local Operational Risk Support Officer (LORSO): this role is the figure responsible for the
unit in charge of local risk control (or the equivalent person in the company according to its own
internal regulations). Within his/her legal entity, this officer supports the Operational Risks
Officer in the implementation and co-ordination of the operational risk management system as
defined by Group policy;
32
At the stage where facts and responsibilities are investigated presumed frauds must be considered on a par with
proven frauds.
33 Defined as the risk of incurring losses and/or additional costs as a result of violations of laws and regulations,
legal proceedings or voluntary actions taken to prevent legal risk from arising (the definition of legal risk also
includes losses arising from money laundering risks, misconduct events and compliance risks).
34 Defined as the risk of incurring losses and/or additional costs as a result of models used in decision-making
processes (e.g. pricing models, models used to measure financial and/or hedging instruments, models used to
monitor controls on risk limits, etc.). The definition of model risk does not include losses incurred due to
underestimates of capital requirements calculated using internal models submitted to supervisory authorities for
approval.
35 Defined as losses and/or additional costs connected with financial transactions including those relating to the
management of market risk caused by inadequate and/or failures in processes, operational and or data entry
errors, shortcomings in internal control systems, inadequacies of data quality processes, the unavailability of IT
systems, unauthorised conduct and negligent and/or gross misconduct of persons and/or by other external events.
36 Defined as financial losses generated when a credit product is sold and/or as part of a credit process caused
mainly by an operational risk.
37 Defined as the present or future risk of incurring loss of profits or capital resulting from a negative perception of
the image of the Bank/Company by customers, counterparties, shareholders, investors or supervisory authorities.
38 Defined as the risk attaching to errors in decision-making concerning business strategies or bad timing in
decisions relating to markets.
278*
UBI Banca - Notes to the Financial Statements
Risk Champion (RC): this role is responsible for units which report directly to the Managing
Director, General Management, to Department Managers (including Local Departments where
present) and to the managers of units who are responsible for specialists activities including the
following operations:
logical security
physical security
disaster recovery and operational continuity
prevention and protection at work as defined by the legislation 81/2008
anti money-laundering and anti-terrorism activities
accounting controls as defined by legislation 262/2005
complaints
securities brokering
–
legal and tax matters.
They are assigned responsibility for operational supervision of the proper performance of the
operational risk management process in relation to the activity for which they are responsible
and for co-ordinating the Risk Owners that report to them;
–
–
–
–
–
–
–
–
Risk Owner (RO): this role is that of the managers of the units which report hierarchically to a
Risk Champion. Their task is to recognise and report loss events, both actual and/or potential,
attributable to operational risk factors which occur in the course of everyday operations;
Accounting Assistant: this role is assigned to specific persons identified within the units
responsible for operational accounting activities. Their task is to ensure full and accurate
accounting of operational losses;
Insurance Function: this role is assigned to specific persons identified within the units
responsible for the management of claims for which insurance cover is provided. Their task is to
ensure accurate and full records are kept of insurance compensation and all relative support
information.
The measurement system
The measurement system takes account of internal and external operational loss data,
operational context factors and the system of internal controls, in a manner whereby it detects the
main determinants of risk (especially those which impact on the distribution tail) and
incorporates changes that occur in the risk profile.
Further details on the functioning of the calculation model are given in the following section on the
capital requirement which may be consulted.
The reporting system
Monitoring of operational risks is carried out by means of a standard reporting system organised
on the basis of the same levels of responsibility present in the organisational model. Management
reporting activities are carried out in-house by the operational risk control function of the Parent
which periodically prepares the following:
–
an analysis of changes in operating losses detected by the loss data collection system
and of the relative recoveries obtained;
–
benchmark analyses with sector-wide data;
–
a summary of assessments of exposure to potential risks;
–
details of areas of vulnerability identified and the mitigation action undertaken.
As a consequence of the functions attributed by General Corporate Regulations, responsibility for
monitoring the risk profile assumed by each company in the Group, its consistency with risk
279*
UBI Banca - Notes to the Financial Statements
targets and compliance with operational limits lies with the Parent’s risk control units. On
conclusion of risk profile monitoring, appropriate corrective action is identified which will form part
of the annual projects programmed.
As a further form of mitigation, the UBI Banca Group has taken out adequate insurance policies to
cover the principal transferable operational risks with due account taken of the requirements of
supervisory regulations.
Legal risk
The Bank is party to a number of legal proceedings arising from the ordinary performance of its
business. In order to meet the claims received, the Bank has made appropriate provisions on the
basis of a reconstruction of the amounts potentially at risk and an assessment of the risk in
terms of the degree of “probability” and/or “possibility” as defined in the accounting standard IAS
37. Therefore, while it is not possible to predict final outcomes with certainty, it is considered that
an unfavourable conclusion of these proceedings, both taken singly or as a whole, would not have
a significant effect on the financial and operating position of the Bank.
Significant litigation (claims of greater than or equal to €5 million) for which the probable risk has
been estimated is as follows:
a claim for damages for contractual liability, resulting from withdrawal from a contract
concerning software;
an employment action brought against the former Centrobanca, won in the court of first
instance and then appealed against UBI Banca;
Significant litigation (claims of greater than or equal to €5 million) for which a possible risk (or
contingent liability) has been estimated are as follows:
three legal actions have been initiated against the former Centrobanca and therefore against
UBI Banca, as the survivor of the merger, from the bankruptcies of the Burani Group, all before
the Court of Milan:

on 11th October 2011, Centrobanca was served with a writ of summons from the Burani
Designers Holding NV (“BDH”) Receivership with which it claimed the bank was liable for “abusive
grant of credit” in relation to a public tender offer to purchase launched by Mariella Burani Family
Holding Spa in 2008 (“MBFH”) on the shares of Marella Burani Fashion Group Spa (“MBFG”);
1)
on 1st March 2012, a similar writ of summons was served by the MBFH Receivership, based
on arguments of fact and law similar to those already made in the summons served by the BDH
Receivership. In both cases the claims for damages amounted to approximately €134 million and
no provision was made for them because the bank, supported by reputable legal advisors,
considered that the claims were without grounds and that if anything the bank itself (officially
accepted as a creditor in all the creditor proceedings concerning the companies in the Burani
Group) had incurred damages and certainly was not jointly responsible for the conduct of the
Directors of the Burani Group. Furthermore, because the evidence used by the Receiverships to
support their demands applied in part also to Mediobanca Spa and to Equita Sim Spa, the Bank
decided to extend the proceedings to include these two companies;
2)
finally on 26th March 2013, a writ of summons was served by the MBFH Receivership
applying to revoke (clawback action) a payment made the year before to the bankrupt company
relating to a repayment of €4 million that was due on 30th June 2009. According to the claimant,
this payment was made irregularly, and that is by withholding the proceeds from the sale of
securities which had been given in pledge.
3)
A proposal for an arrangement with creditors has been filed for both bankruptcy cases (MBFH and
BDH). In the case of MBFH, the arrangement with creditors proposal was definitively approved,
280*
UBI Banca - Notes to the Financial Statements
while in the case of BDH, it is currently undergoing examination by the creditors. The matters
pending with the Bank could also be settled on the conclusion of those proceedings.
The total gross exposure of the UBI Banca Group to the Burani Group at the end of 2015
amounted to €59.9 million, which has been written down by 98.79%.
a compensation action, at the appeal stage following a ruling in favour of the Bank at the
court of first instance, originating from the former Centrobanca for claimed damages brought by
the official receiver of a company concerning the content of declarations made by the former
Centrobanca to third parties regarding the availability of securities held on deposit at that bank.
With a ruling of 4th December 2015, the Court of Appeal confirmed the ruling of the court of first
instance in favour of the Bank. This ruling may be further appealed in the Supreme Court of
Cassation;

three actions brought by parties beneficiaries of public contributions for various reasons in
relation to which UBI Banca Spa (which took the place of Centrobanca Spa in arrangements the
latter had entered into with authorities that subsidised loans to manage formalities connected
with processing subsidy applications) has been summoned jointly and severally with those
authorities in its capacity as the “concessionary bank” appointed by those same authorities. In
detail:

- a case pending before the T.A.R. (regional administrative tribunal) of Sicily in which the other
party has applied for the annulment of a ministerial provision revoking subsidies granted
temporarily amounting to €6.4 million following the seizure by the criminal courts of the
production unit to which the subsidies had been granted;
- a case pending before the T.A.R. (regional administrative tribunal) of Latium in which the other
party has applied for the annulment of a ministerial provision revoking subsidies granted
temporarily amounting to €11.6 million following the results of criminal investigations launched
following inspections by the Guardia di Finanza (finance police) who it is alleged found serious
irregularities in the management of the company. We report that the formalities for the subsidy
application contested here were processed by Banca Italease, a member of a “Temporary Grouping
of Businesses” led by us which should hold the Bank free from any resulting expense and risk;
- a case pending before the Civil Court of Rome in which the other party has applied for the
annulment of a ministerial provision revoking subsidies granted (due to persistent arrears in the
repayment of the loan granted by the Ministry of Economic Development, in compliance with the
clearly stated regulations governing the matter) and the consequent commencement of the
enforced recovery of the subsidies amounting to €4.3 million in addition to a claim for consequent
damages, quantified at €24 million caused by revocation of the presumed credit lines granted by
banks to the company. The formalities for the subsidy application contested here were processed
by Banca Popolare dell’Emilia Romagna, a member of a “Temporary Grouping of Businesses” led
by us which should hold the Bank free from any resulting expense and risk.
The following significant cases of litigation have been concluded with respect to the information
reported in the notes to the financial statements in the 2014 Annual Report:
- a claim for damages in relation to contractual liability resulting from a withdrawal from a former
Silf Spa agency contract brought against UBI Banca;
- an action originating from the former Centrobanca Spa with a government counterparty
concerning an application for the return of a payment collected following the enforcement of a
guarantee granted.
The specific sections of this report may be consulted for information on corporate litigation not
directly related to ordinary business operations and on tax litigation.
281*
UBI Banca - Notes to the Financial Statements
Quantitative information
The charts below show that the main sources of operational risk for the Bank in the period from
January 2011 to December 2015 were “processes” (49% of frequencies and 74% of the total
impacts detected) and “external causes” (49% of frequencies and 19% of the total impacts
detected).
The “process” risk driver included unintentional errors and incorrect application of regulations.
The “external causes” risk driver included, amongst other things, human actions performed by
third parties and not directly under the control of the Bank.
Percentage of operational losses by risk driver (detection from 1st January 2011 to 31st December 2015)
Number of events
Impact on profits
The types of event which recorded the greatest concentration of operational losses during the
period examined were “execution, delivery and process management” (9% of frequencies and 49%
of the total impacts detected), “customers, products and professional practices” (41% of
frequencies and 26% of the total impacts detected) and “external fraud” (44% of frequencies and
17% of the total impacts detected).
Percentage of operational losses by type of event (detection from 1st January 2011 to 31st December 2015)
Number of events
Impact on profits
282*
UBI Banca - Notes to the Financial Statements
Operational losses during the year were concentrated on the following risk factors: “processes”
(94% of frequencies and 85% of the total impacts detected) and “persons” (0.3% of frequencies and
8% of the total impacts detected).
Percentage of operational losses by risk driver (detection from 1st January 2015 to 31st December 2015)
Number of events
Impact on profits
During the year operational losses were concentrated mainly in the following types of event:
“customers, products and professional practices” (93% of frequencies and 45% of the total
impacts detected) and “execution, delivery and process management” (4% of frequencies and 45%
of the total impacts detected).
Percentage of operational losses by type of event (detection from 1st January 2015 to 31st December 2015)
Number of events
Impact on profits
283*
UBI Banca - Notes to the Financial Statements
Capital requirement
A Bank of Italy provision authorised the Bank to use an internal model based on the advanced
measurement approach (AMA) starting from the supervisory report on data as at 30th June 2012.
The measurement of operational risk is performed using an extreme value theory (EVT) approach,
based on operational losses measured internally (loss data collection – LDC), empirical data
acquired from outside the Group (IDOL - “Italian database of operational losses”) and potential
losses evaluated using self risk assessment (SRA) scenarios. The first two information sources
represent the quantitative component of the measurement model and furnish a historical view of
the internal risk profile and of the Italian banking sector. On the other hand, the scenario
analyses constitute a qualitative and quantitative information component, because they are
derived from risk assessments provided as part of the internal self-risk assessment process,
where the purpose is to provide a forward looking view of the internal risk profile, operational
context factors and the system of internal controls.
The model developed follows the loss distribution approach and it involves estimating severity
distributions for each class of risk on two distinct components: a generalised pareto
distribution (GPD) for the tail and an empirical distribution for the body. The estimates of
severity obtained on the tails are subsequently integrated with risk information evaluated by
means of a self risk assessment (SRA) process. The probabilities of events occurring are
described by using Poisson curves. The estimate of capital at risk is calculated to the 99.9th
percentile of the annual loss curve resulting from a convolution between the curve of the
probabilities of events occurring and the integrated severity curve. The consolidated capital
requirement is calculated as the sum of the capital at risk estimated on each risk class. The
robustness of the model and of the underlying assumptions is tested by employing a stress
testing process, which provides an estimate of the impacts on measurements of expected loss
and of VaR when particular stress conditions occur.
The risk capital calculated on a consolidated basis for each risk class is allocated to the various
legal entities on the basis of a summary indicator determined by the historical and future risk
measured and by the amount of the capital requirement calculated using the standardised
methodology.
As a form of risk mitigation, the UBI Banca Group has taken out adequate insurance policies to
cover the principal transferable operational risks with due account taken of the requirements of
supervisory regulations. The UBI Banca Group has not taken up the option available under the
regulations in force to deduct the effects of insurance policies and other risk transfer mechanisms
from the capital requirement.
***
The capital requirement net of expected losses for which provisions for risks and charges had
been made was €31.1 million (-11.25% compared with €35 million in the previous half-year).
That reduction was determined principally by the combined impact of changes recorded in the
estimates of the capital requirement made at consolidated level and a reduction in values for the
significant indicator of the company used in the process of allocating the capital requirement to
single legal entities.
The main factors that determined the reduction in the estimate of the capital requirement at
consolidated level were due to the following:
284*
UBI Banca - Notes to the Financial Statements
the merger of IW Bank into UBI Private Investment which resulted in the grouping
together of many activities carried out by central offices (compliance, anti moneylaundering, human resources, etc.) which is reflected in a reduction of the potential risk
measured as part of the self risk assessment process;
a reduction in the annual number of expected events and/or repositioning of the
probability of these events occurring into classes with a lower impact carried out as part of
the self risk assessment process on the basis of figures for losses detected historically both
by the internal LDC process and by the Italian banking sector nationally;
exclusion from the dataset used to calculate VaR of accounting entries made outside
the relative holding period;
-
mitigation action taken during the year;
a reduction in the losses detected historically both by the internal loss data collection
process and by the Italian banking sector nationally.
285*
UBI Banca - Notes to the Financial Statements
Part F – Information on equity
Section 1 Equity
A – Qualitative information
Equity is defined by international financial reporting standards in a residual manner as “what
remains of an entity’s assets after all the liabilities have been deducted”. From a financial
viewpoint, equity is the means measured in monetary form contributed by the owners or
generated by the entity.
Operational levers are developed on a broader aggregate, consistent with the supervisory
aggregate, which are characterised not just by equity in the strict sense but also by intermediate
aggregates such as innovative instruments, hybrid instruments and subordinated liabilities.
As the Parent Bank, UBI Banca performs supervision and co-ordination activities for the
companies in the Group and, without prejudice to independence of each of them in terms of
business and articles of association, sets appropriate policies for them.
The Parent analyses and co-ordinates capital requirements on the basis of the Group development
plan, the related risk profiles and, very importantly, in compliance with supervisory constraints
and acts as a privileged counterparty in gaining access to capital markets applying an integrated
approach to optimising capital strength.
B – Quantitative information
B.1 Equity: composition
Items/Amounts
31.12.2015
31.12.2014
1. Share capital
2,254,371
2, 254,371
2. Share pr emiums
3,798,430
4, 716,866
3. Reserves
2,283,488
2, 354,285
1,606,028
1, 678,050
573,912
573,912
- of profits
a) statutory reserve
b) articles of association r elated
c) trea sury shares
d) other
- other
4. Equity instruments
-
-
5,155
7,250
1,026,961
1, 096,888
677,460
676,235
-
-
5. (Treasur y shares)
(5,155)
(5, 340)
6. Valuation reserves
304,389
164,951
281,294
143,045
- Proper ty, plant and equipment
-
-
- Intangible a ssets
-
-
- For eign investment hedges
-
-
- Cash flow hedges
(101)
-
- Exchange r ate dif ferences
(243)
(243)
- Available-for-sale fi nancial assets
- Non-current assets held f or disposal
- Actuarial gains (losses) r elating to defi ned benef it pension plans
- Shar e of valuation reserves relating to equity-a ccounted investees
- Special revaluation la ws
7. Profi t ( loss) for the year
Tot al
286*
-
-
(7,554)
(8, 844)
-
-
30,993
30,993
123,423
8,758,946
( 918, 437)
8,566,696
UBI Banca - Notes to the Financial Statements
B.2 Fair value reserves for available-for-sale financial assets: composition
31.12.2015
Asse ts/ amounts
Positiv e reserv e
31.12.2014
Negat ive reserve
Positiv e reserv e
Negat ive reserve
228,218
( 13,000)
253,440
2. Equity instruments
53,727
(18)
59,396
(18)
3. Units i n UCITS
12,370
(3)
10,165
(744)
294,315
(13,021)
323,001
(179,956)
1. Debt instruments
4. Financing
Tot al
(179,194)
Details are given below of the main components of the fair value reserve net of tax:
Positiv e
reserve
Government securities and other debt instruments
Negat ive
r eser ve
Total
228,218
(13,000)
215,218
Units in UCIT S and other private equity funds
12,370
(3)
12,367
Istituto Centrale Banche Popolari Italiane
19,042
-
19,042
Sacbo Spa
30,263
-
30,263
VISA Inc
1,543
-
1,543
VISA Eur ope Ltd
2,031
-
2,031
Other equity instruments
848
294,315
(18)
(13,021)
830
281,294
A communication was received in December from the company VISA concerning a proposal to sell
100% of the share capital of Visa Europe Limited ("Visa Europe") by the company VISA INC to be
concluded in the first of 2016.
That proposal was made to all the “principal” shareholders of the company Visa Europe (the
companies IW bank and UBI Banca for the UBI Group).
That agreement involves the payment of a price consisting of three components on the basis of the
contribution provided by the company to Visa Europe’s activities:

a portion of the consideration in cash

a portion in VISA INC. shares

a further subsequent earn-out portion subject to the definition of all the procedures for
calculating it.
UBI Banca prepared the documentation required for acceptance of the offer and as a
consequence, because the VISA Europe limited share was valued at the notional nominal amount
of one euro, the AFS reserve was revalued by an amount of €3 million (€2.031 million net of the
relative tax).
287*
UBI Banca - Notes to the Financial Statements
B.3 Fair value reserves for available-for-sale financial assets: annual changes
Debt instrum ents
1. Opening balances
Equity instruments
Units in UCITS
Financing
74,246
59,378
9,421
-
2. Pos itive changes
244,912
16,433
4,876
-
2.1 Inc rease s in fair value
217,89 4
16,433
4,156
-
27,01 8
33 7
-
720
276
-
26,68 1
(103,940)
(13,663)
(90,277)
215,218
(22,102)
(2,289 )
(19,813 )
53,709
444
(1,930)
(1,405)
(525)
12,367
-
2.2 Transfer to income statement of negativ e rese rve s
for imp airment
from sale
2.3 Othe r change s
3. Negative changes
3.1 Red uctions in fair value
3.2 Impairment losse s
2.2 Transfer to income statement of posit ive re serves: from dispos al
3.4 Othe r change s
4. Closing balances
The changes in fair value are shown net of tax. Detailed information gross of tax is given in the
notes at the foot of the detailed statement of comprehensive income.
B.4 Valuation reserves for defined benefit plans: annual changes
31.12.2015
Figures in thousands of euro
1. Opening balances
2. Positive c hanges
2.1 In creases in fair value actuarial (gains)/losses
2.2 Transfer to income statement of n egative reserves
2.3 Oth er changes
3. Negative c hanges
3.1 De crease in fair va lue actuarial (gains)/losse s
3.3 Transfer to the income statement of positive rese rves
3.4 Oth er changes
4. Closing balances
(8,844)
1,290
1,290
(7,554)
31.12.2014
(6,265)
(2,579)
(2,579)
(8,844)
The items increases/decreases in fair value include the tax effect calculated on the change in the
actuarial reserve.
288*
UBI Banca - Notes to the Financial Statements
Section 2 Own funds and capital ratios
2.1 OWN FUNDS
A – Qualitative information
Information on the method for determining regulatory capital on the basis of current regulations
is given in the corresponding section of the consolidated annual report which may be consulted.
The tables below summarise the main contractual characteristics of the debt instruments that
constitute the tier one capital, the tier two capital and the tier three capital. The column “nominal
amount” reports the nominal amounts for those instruments net of the repurchases that have
occurred.
1. Common Equity Tier 1 (CET1) capital
The Common Equity Tier 1 capital is composed as follows:
31.12.2015
2,254,371
3,798,430
1,606,028
123,423
304,389
677,460
8,764,101
Paid up share capital
Share premium
Reserves of profits
Net profit for the year
Other comprehensive income
Reserves - other
Total
2. Additional Tier 1 (AT1) capital
No Additional Tier 1 capital for UBI Banca to report.
289*
UBI Banca - Notes to the Financial Statements
3. Tier 2 capital (T2)
Type of issue
Ordinary subordinated
bond issues (Lower Tier
II)
Coupon
Maturity date
Early redemption clause
Nom inal amount
IAS AMOUNT
31.12.2015
2010/2017 - floating rate
ISIN IT0004572860
Currency euro
Half year
floating rate
Euribor 6 months +0.40%
23.02.2017
61,035
60,939
2010/2017 - fixed rate ISIN
IT0004572878 Currency euro
Half year
fixed rate of 3.10%
23.02.2017
120,000
122,640
2010/2017 - fixed rate ISIN
IT0004645963 Currency euro
Half year
fixed rate of 4.30%
05.11.2017
Redemption by fixed rate
annual amortisation schedule
from 05.11.2013
160,000
162,639
2011/2018 - fixed rate ISIN
IT0004723489 Currency euro
Half year fixed rate of 5.40%
30.06.2018
Redemption by fixed rate
annual maturation schedule
from 30.06.2014
240,000
246,370
2009/2019 - mixed rate ISIN
IT0004457070 Currency euro
Half year
fixed rate 4.15% until 2014 and
subsequently floating Euribor 6M
+1.85%
13.03.2019
From 13.03.2014
370,000
368,889
2009/2016 - floating rate ISIN
IT0004457187 Currency euro
Quarterly
Euribor 3M + 1.25%
13.03.2016
Redemption by fixed rate
annual amortisation schedule
from 13.03.2012
42,398
42,379
2009/2016 - floating rate ISIN
IT0004497068 Currency euro
Quarterly
Euribor 3M + 1.25%
30.06.2016
Redemption by fixed rate
annual amortisation schedule
from 30.06.2012
31,367
31,289
2009/2019 - mixed rate
ISIN IT0004497050
Currency euro
Half year
fixed rate 4% until 2014 and
subsequently variable Euribor 6M
+1.85%
30.06.2019
From 30.06.2014
365,000
361,576
2011/2018 - fixed rate ISIN
IT0004718489 Currency euro
Half year
fixed rate of 5.50%
16.06.2018
Redemption by fixed rate
annual amortisation schedule
from 16.06.2014
240,000
246,505
2011/2018 - mixed rate
ISIN IT0004767742
Currency euro
Quarterly
18.11.2018
fixed rate of 6.25% until 2014 and
subsequently variable Euribor 3M +1%
222,339
220,040
2012/2019 - mixed rate
ISIN IT0004841778
Currency euro
Quarterly
08.10.2019
fixed rate 7.25% until 2014 and
subsequently variable Euribor 3M +5%
200,000
201,053
2,052,139
2,064,319
Total
The subordinated bonds of UBI Banca include the bond IT0004842370 for €776 million nominal with a book
value of €788 million not eligible for inclusion in regulatory capital due to the contract clauses governing the
bond itself .
290*
UBI Banca - Notes to the Financial Statements
B – Quantitative information
A. Common Equity Tier 1 capital (CET1) before the application of prudential filters
of which CET1 instruments subject to transitional provisions
B. CET1 prudential filters (+/-)
C. CET1 before components to be deducted and the impacts of the transitional regime (A+/-B)
D. Items to be deducted from CET1
E. Transitional regime - Impact on CET1 (+/-)
F. Total Common Equity Tier 1 capital (CET1) (C-D+/-E)
G. Additional Tier 1 capital (AT1) before components to be deducted and the impacts of the transitional
regime
of which AT1 subject to transitional provisions
H. Components to be deducted from AT1
I. Transitional regime - Impact on AT1 (+/-)
L. Total Additional Tier 1 capital (AT1) (G-H+/-I)
M. Tier 2 capital (T2) before components to be deducted and the impacts of the transitional regime
of which T2 instruments subject to transitional provisions
N. Items to be deducted from T2
O. Transitional regime - Impact on T2 (+/-)
P. Total Tier 2 capital (T2) (M-N+/-O)
Q. Total own funds (tc=t1+t2) (F+L+P)
31.12.2015
8,663,518
-3,281
8,660,237
150,901
-236,881
8,272,455
31.12.2014
8,572,036
-2,576
8,569,460
874,666
602,873
8,297,667
3,555
3,555
1,443,464
15,026
24,422
1,452,860
9,725,315
740,334
740,334
2,196,908
15,035
30,372
2,212,245
10,509,912
2.2 CAPITAL ADEQUACY REQUIREMENT
A. Qualitative information
The capital adequacy parameters are consistent with the type of business performed by the Bank
as a Parent, which is almost entirely with members of the Group it leads.
The table below shows the absorption of regulatory capital as a function of the overall capital
adequacy requirement.
Compliance with that requirement at the end of the year involved a capital requirement of €1,845
million.
291*
UBI Banca - Notes to the Financial Statements
B. Quantitative information
Amounts not weighted
31.12.2015
31.12.2014
A. RISK ASSETS
A.1 Credit and counterparty risk
1. Standardised approach
2. Method based on internal ratings
2.1 Basic
2.2 Advanced
3. Securitisations
B. REGULATORY CAPITAL REQUIREMENTS
Amounts weighted
31.12.2015
31.12.2014
65,566,219
11,302,512
75,660,132
11,595,293
15,670,524
5,831,530
17,012,843
5,695,336
11,302,512
11,595,293
5,831,530
5,695,336
Requirements
B.1 Credit and counterparty risk
B.2 Credit valuation adjustment risk
B.3 Settlement risk
B.4 Market risk
1. Standard approach
2.Internal models
3. Concentration risk
B.5 Operational risk
1. Basic indicator approach
2. Standardised approac h
3. Advanced measurement approach
B.6 Other calculation items
B.7 Total prudential requirements
C. RISK ASSETS AND SUPERVISORY RATIOS
C.1 Risk weighted assets
C.2 Common equity tier 1 capital / Risk weighted assets (CET1 capital ratio)
C.3 Tier 1 / Risk weighted assets (Tier 1 capital ratio)
C.4 Total own funds / Risk weighted assets (Total capital ratio)
1,720,164
15,364
1,816,654
14,644
78,625
53,251
31,071
34,253
1,845,225
1,918,802
23,065,310
35.87%
35.87%
42.16%
23,985,029
34.60%
34.60%
43.82%
For those banks which adopt the standardised method, the non-weighted amount is that which
takes account of prudential filters, risk mitigation techniques and credit conversion factors.
The risk weighted assets consist of the reciprocal of the minimum requirement set (8%).
292*
UBI Banca - Notes to the Financial Statements
Part G - Business combinations concerning companies or lines of
business
Section 1 Transactions performed during the year
No business combination transactions were performed during the year.
Section 2 Transactions performed after the end of the year
No business combination transactions were performed after the end of the year.
Section 3 Retrospective adjustments
No retrospective adjustments to report.
293*
UBI Banca - Notes to the Financial Statements
Part H - Transactions with related parties
1. Information on the remuneration of key management personnel
Rem uneration for Board Members and senior managers
Short-term benefits
11,414
- of which key mana gement personnel
4,913
Pos t-employment benefits
586
- of which key mana gement personnel
586
Other lo ng term benefits
394
- of which key mana gement personnel
394
Indemnity for termination of employment
-
- of which key mana gement personnel
-
Share bas ed payments
288
- of which key mana gement personnel
288
With regard to remuneration paid in 2015 to key management personnel including the General
Manager, in addition to the fixed component of remuneration decided through individual
agreements, there is also a variable component linked to the achievement of strategic Group
objectives.
The fixed part of the remuneration not only contains normal payments in cash but also benefits
which complete the remuneration such as supplementary pension funds, health policies, accident
policies and, where it is the case, the provision of a company car for bank and private use.
The following types of remuneration were paid (the relevant accounting standard may be
consulted for definitions):
a)
Short-term benefits
Short-term benefits include salaries, social security contributions, indemnities to replace
vacations not taken, absences for illness, paid leave and benefits such as medical care and
housing;
b)
Post employment benefits
Post-employment benefits include providence, pension and insurance plans as well as severance
payments.
The senior managers in question benefit from life and supplementary pension forms of insurance,
which also extend beyond the termination of their employment contracts.
294*
UBI Banca - Notes to the Financial Statements
2. Information on transactions with related parties
In compliance with the provisions of the regulations in force, we report that all transactions
carried out by the Parent with related parties were conducted in observance of correct principles
both in substance and form, under conditions analogous to those applied for transactions with
independent parties.
In compliance with IAS 24, information is provided below on balance sheet and income statement
transactions between related parties of UBI Banca and Group member companies, as well as
those items as a percentage of the total for each item in the financial statements.
According to IAS 24, a related party is a person or entity that is related to the entity that is
preparing its financial statements (the “reporting entity”).
(a)
A person or close family member of that person is related to the reporting entity if that
person:
(i)
has control or joint control over the reporting entity:
(ii)
has significant influence over the reporting entity; or
(iii)
is a member of the key management personnel of the reporting entity or of a parent of
the reporting entity.
(b)
An entity is related to a reporting entity if any of the following conditions apply:
(i)
the entity and the reporting entity are members of the same group (which means that each
parent, subsidiary and fellow subsidiary is related to the others);
(ii)
one entity is an associate or joint venture of the other entity (or an associate or joint venture
of a member of a group of which the other entity is a member);
(iii) both entities are joint ventures of the same third party;
(iv) one entity is a joint venture of a third entity and the other entity is an associate of the third
entity;
(v)
the entity is a post-employment defined benefit plan for the benefit of employees of either
the reporting entity or an entity related to the reporting entity. If the reporting entity is itself such
a plan, the sponsoring employers are also related to the reporting entity;
(vi) the entity is controlled or jointly controlled by a person identified in (a);
(vii)
a person identified in (a)(i) has significant influence over the entity or is a member of the
key management personnel of the entity (or of a parent of the entity).
With regard to the effects of the management and co-ordination activities performed by the
Parent, as required by article 2497 bis of the Italian Civil Code, we report that the Parent and its
subsidiary, UBI Sistemi e Servizi spa provided Group member companies with a series of services,
governed by intragroup contracts drawn up in accordance with the principles of consistency,
transparency and uniformity in line with the organisational model of the Group, according to
which, strategic, and management activities are centralised in UBI Banca and technical and
operational activities in the subsidiary just mentioned. The prices agreed for the services provided
under the contracts were determined on the basis of market prices or, where appropriate
reference parameters could not be found in the marketplace, in accordance with the particular
nature of the services provided, on the basis of the cost incurred.
The main intragroup contracts existing at the end of the year included those to implement the
policy to centralise activities in the governance and business areas of the Parent, which involved
the Parent and the main banks in the Group, and also contracts to implement the “national fiscal
consolidation” (in accordance with articles 117 to 129 of Presidential Decree No. 917/1986, the
consolidated law on income tax) concluded by the Parent. There were also all the intragroup
contracts which implement the centralisation in UBI Sistemi e Servizi of support activities for the
principal companies in the UBI Group.
Further information on transactions with related parties is reported in the tables that follow.
295*
UBI Banca - Notes to the Financial Statements
Summary of principal balance sheet transactions with related parties
Related party
Financial assets
held for trading
Direct subsidiaries
Available-forsale financial
assets
Loans and
advances to
banks
Loans and
advances to
customers
Other
assets
Due to banks
Financial
liabilities
held for
trading
Debt
securities
issued
Due to
customers
Other
Guarantees
liabilities
granted
245,178
3,296
14,234,999
10,349,985
129,761
6,556,576
254,849
2,953,605
44,770
235,227
3,271,043
Associates
-
12,406
-
15,026
-
-
91,442
-
12
-
24,943
Senior managers
-
-
-
-
-
-
30
-
-
-
-
Other related parties
-
-
-
-
-
-
-
-
-
-
-
245,178
15,702
14,234,999
10,365,011
129,761
6,556,576
346,321
2,953,605
44,782
235,227
3,295,986
TOTAL
Percentage of balance sheet transactions with related parties in respect of the financial statements of UBI Banca
Related party
Financial assets
held for trading
With related-parties (a)
Total (b)
Percentage (a/b*100)
245,178
1,088,262
22.53%
Loans and
Available-for-sale advances to
financial assets banks
15,702
14,234,999
15,357,571
15,489,215
0.10%
91.90%
Loans and
advances to
customers
10,365,011
Other
assets
129,761
Due to
Due to banks customers
6,556,576
21,901,390
699,981 15,845,354
47.33%
18.54%
41.38%
296*
346,321
Debt
securities
issued
Financial
liabilities held
for trading
2,953,605
44,782
7,357,586 36,265,240
4.71%
8.14%
608,600
7.36%
UBI Banca - Notes to the Financial Statements
Other
liabilities
235,227
Guarantees
granted
3,295,986
881,278
5,191,845
26.69%
63.48%
Summary of principal income statement transactions with related parties
Related party
Net interest
income
Direct subsidiaries
Associates
Senior managers
Other related parties
TOTAL
Net fee and
commission
income
Dividends and
similar income
Net income from
trading activity
Other net
operating income
and expenses
Staff costs
Other
administrative
expenses
80,182
147
(7,072)
-
229,843
10,704
-
94,846
1
51,102
-
(69,360)
-
-
-
-
-
-
(12,394)
-
(70)
80,329
(7,072)
240,547
-
94,847
38,708
(69,430)
Percentage of income statement transactions with related parties in respect of the financial
statements of UBI Banca
Related party
Net interest
income
With related-parties (a)
Total (b)
Percentage (a/b*100)
80,329
(13,593)
-590.96%
Net fee and
commission
income
(7,072)
48,979
-14.44%
Dividends and
similar income
240,547
249,430
96.44%
297*
Net income
from trading
activity
25,902
0.00%
Other net
operating
income and
expenses
94,847
117,590
80.66%
Staff costs
38,708
(183,099)
-21.14%
Other
administrative
expenses
(69,430)
(219,477)
31.63%
UBI Banca - Notes to the Financial Statements
Principal balance sheet items relating to subsidiaries subject to control, joint control and
significant influence
Financial a ss ets
he ld for trading
Fully co nsolidated companies
A vailable -for-sa le
fina nc ial a sse ts
Loans to othe r
banks
Loans and
advanc es to
custome rs
Other a sse ts
D ue t o
customer s
Due to banks
D ebt s ecurities
iss ue d
Financial liabilities
Ot he r liabilities
held for tr ading
Gua rantee s
gra nt ed
245,178
3,296
14,234,999
10,349,985
129,761
6,556,576
254,849
2,953,605
44,770
235,227
10,570
-
125,294
-
-
818,582
-
1,656,036
72
8,019
1,959
Banca di Valle Camonica Spa
4,225
-
657,564
-
1,520
18,584
-
-
1,060
4,195
1,402
IW BANK SPA
1,074
-
79,216
-
15
1,062,497
-
1,297,569
-
3,822
3,915
Banca Carime Spa
3,271,043
Banca Popolare Commercio e
Industr ia Spa
44,203
-
1,864,995
-
17,912
127,027
-
-
3,363
23,345
202,946
Banca Popolare di Ancona Spa
49,937
-
2,129,066
-
13,425
88,950
-
-
4,268
20,113
52,284
1,633,361
Banca Popolare di Bergamo Spa
50,870
-
3,060,291
-
58,659
2,012,369
-
-
6,890
86,306
Banca Regionale Europea Spa
16,153
-
2,612,438
-
3,751
93,468
-
-
930
18,969
19,699
Banco di Brescia Spa
41,303
-
3,500,496
-
9,264
171,095
-
-
2,192
41,723
276,483
BPB Immobiliare Srl
-
-
-
212
870
-
-
-
-
1,026
40
UBI Banca International Sa
-
-
205,639
-
-
2,164,004
-
-
-
-
1,013,103
13,446
-
-
6,137,369
1,950
-
26,113
-
13,397
13,456
64,552
-
-
-
2,104,740
1,130
-
25,007
-
-
3,504
1,276
Centrobanca Sviluppo Impresa
SGR Spa
-
3,296
-
73
13
-
-
-
-
-
-
Coralis Rent Srl (*)
-
-
-
-
-
-
-
-
-
-
-
24-7 F inance Srl
-
-
-
-
-
-
961
-
-
-
-
13,397
-
-
98,930
-
-
-
-
12,598
-
-
UBI Management Company Sa
-
-
-
-
44
-
-
-
-
-
-
Ubi Finance 2 Srl in liquidazione
-
-
-
-
-
-
-
-
-
-
-
Prestitalia Spa
-
-
-
1,459,468
1,299
-
158,665
-
-
3,557
-
UBI Fiduciaria Spa
UBI Leasing Spa
UBI Factor Spa
Ubi Lease Finance 5 Srl
-
-
-
52
59
-
-
-
-
301
-
Società Bresciana Immobiliare Mobiliare SBIM Spa
-
-
-
9,210
996
-
-
-
-
886
-
UBI Finance CB2
-
-
-
-
-
-
-
-
-
10
-
UBI SPV BBS 2012 Srl
-
-
-
-
-
-
-
-
-
-
-
UBI SPV BPCI 2012 Srl
-
-
-
-
-
-
-
-
-
-
-
UBI SPV BPA 2012 Srl
-
-
-
-
-
-
-
-
-
-
-
UBI Trustee SA
-
-
-
-
49
-
-
-
-
-
-
UBI Finance Srl
-
-
-
494,900
-
-
-
-
-
10
-
UBI Finance 3 Srl
-
-
-
-
-
-
-
-
-
-
-
UBI Academy Scrl
-
-
-
241
425
-
-
-
-
-
-
UBI Pramerica SGR Spa
-
-
-
1,522
541
-
44,103
-
-
170
-
UBI Sistemi e Servizi Scpa
-
-
-
43,268
17,839
-
-
-
-
5,815
23
(*) The company was liquidated in December 2015.
298*
UBI Banca - Notes to the Financial Statements
(contd.)
Financial assets
held for trading
Available-for-sale
financial assets
Loans and
advances to
customers
Loans to other
banks
Other assets
Due to
customers
Due to banks
Debt securities
issued
Financial liabilities
Other liabilities
held for trading
Guarantees
granted
Companies consolidated using the
equity method
-
12,406
-
15,026
-
-
91,442
-
12
-
24,943
Aviva Vita SpA
-
-
-
-
-
-
71,470
-
-
-
-
Zhong Ou Fund Management Co.
-
-
-
-
-
-
-
-
-
-
-
SF Consulting Srl
-
-
-
-
-
-
-
-
-
-
-
Polis Fondi SGR Spa
-
12,406
-
-
-
-
-
-
-
-
-
Lombarda Vita SPA
-
-
-
-
-
-
713
-
-
-
24,943
UFI Servizi Srl
-
-
-
-
-
-
-
-
-
-
-
Aviva Assicurazioni Vita Spa
-
-
-
15,026
-
-
19,259
-
12
-
-
299*
UBI Banca - Notes to the Financial Statements
Principal income statement items with subsidiaries subject to control, joint control and
significant influence
Net fee a nd
c ommiss ion
income
N et inte res t
income
Fully c onsolidate d c om pa nies
Banca Car ime Spa
Other
adminis trativ e
expens es
Staff costs
80 ,1 82
(7,072 )
22 9,84 3
-
94 ,8 46
(31 ,9 78)
(1,666 )
-
-
6 ,7 03
-
-
1 ,9 95
7 01
(8 )
(1,759 )
5,49 2
-
4 ,0 27
2 ,2 23
(59 )
Banca di Valle Camonica Spa
IW BANK SPA
Othe r incom e
/oper ating
e xpense
Net tr ading income
(loss)
Divide nds
6 ,0 61
(27 ,8 92)
Banca Popolare Commercio e Industria Spa
Banca Popolare di Ancona Spa
Banca Popolare di Bergamo Spa
12
51 ,1 02
(1 ,6 70 )
(69 ,3 60 )
(2 13 )
4 ,4 43
(1,932 )
2 8,22 1
-
11 ,3 73
(1 ,5 33 )
(24 )
14 ,0 03
(1,635 )
7,46 7
-
7 ,4 31
(2 ,2 71 )
(2 22 )
2 ,9 86
(2,549 )
13 3,51 2
-
33 ,0 76
(4 ,6 22 )
(2 11 )
Banca Regionale Europea Spa
15 ,5 91
(78 )
1 0,70 4
-
7 ,4 43
(1 ,6 95 )
(9 33 )
Banco di Brescia Spa
24 ,1 21
(688 )
8,41 1
-
10 ,5 78
(3 ,3 95 )
26 0
-
1 87
BPB Immobiliar e Srl
-
-
2 44
(95 )
(1 ,0 83 )
UBI Banca International Sa
(3 ,2 38)
815
-
-
89
2 55
7
UBI Leasing Spa
38 ,6 93
281
-
-
1 ,3 50
5 02
(8 )
UBI Factor Spa
2 ,8 42
968
5,72 2
-
1 ,0 68
5
(2 )
Centrobanca Sviluppo Impr esa SGR Spa
-
-
-
-
85
66
-
Coralis Rent Srl ( *)
-
-
-
-
52
61
-
-
-
-
-
-
-
24- 7 F inance Srl
(32)
Ubi Lease Finance 5 Srl
-
-
-
-
21
-
-
UBI Management Company Sa
-
-
-
-
-
1 95
-
Ubi Finance 2 Srl in liquidazione
-
-
-
-
-
-
34 ,4 44
-
-
-
2 ,3 21
4 ,3 62
Pr estitalia Spa
UBI Fiduciaria Spa
(4 77 )
-
-
-
-
8
1 97
(1 )
29
-
1,85 5
-
1 31
38
(4 ,5 88 )
UBI Finance CB2
-
-
-
-
2
-
-
UBI SPV BBS 2012 Srl
-
-
-
-
2
-
-
UBI SPV BPCI 2012 Srl
-
-
-
-
2
-
-
UBI SPV BPA 2012 Srl
-
-
-
-
2
-
UBI Tr ustee SA
-
-
-
-
-
1 91
Società Bresciana Immobiliar e - Mobiliare SBIM Spa
UBI Finance Sr l
UBI Finance 3 Srl
UBI Academy Scrl
UBI Pramerica SGR Spa
UBI Sistemi e Servizi SCpA
(9 )
-
-
-
-
2
-
1 08
-
-
-
3 24
-
-
-
-
-
-
2 89
1 ,3 05
(1)
1,159
2 8,19 9
-
3 45
1 ,9 93
(3 33 )
2
-
-
-
5 ,9 40
53 ,9 50
(60 ,4 80 )
(6 21 )
(*) The company was liquidated in December 2015.
300*
UBI Banca - Notes to the Financial Statements
(contd.)
Net fee and
commission
income
Net interest
income
Companies consolidated using the equity method
Other income
/operating
expense
Net trading income
(loss)
Dividends
Other
administrative
expenses
Staff costs
147
-
10,704
-
1
-
-
Aviva Vita SpA
-
-
-
-
-
-
-
Zhong Ou Fund Management Co.
-
-
-
-
-
-
-
SF Consulting Srl
-
-
-
-
-
-
-
Polis Fondi SGR Spa
-
-
146
-
-
-
-
Lombarda Vita SPA
-
-
8,598
-
1
-
-
UFI Servizi Srl
-
-
-
-
-
-
-
147
-
1,960
-
-
-
-
Aviva Assicurazioni Vita Spa
301*
UBI Banca - Notes to the Financial Statements
Part I – Share-based payments
A.
Qualitative information
1. Description of payment agreements based on own balance sheet instruments
In implementation of the “2015 UBI Banca Group remuneration and incentive policies” (the
“Policy”), which was approved on 3rd February 2015 by the Supervisory Board, after prior
consultation with the Remuneration Committee, on 25th April 2015 an ordinary shareholders
meeting of UBI Banca approved the payment of the variable component of long and short-term
bonuses for “key management personnel” to be paid by the use of shares.
The 2015 incentive schemes, described in last year’s Remuneration Report to the Shareholders’
Meeting, are subject to trigger conditions (“gates”) set at Group level to ensure compliance with
capital stability and liquidity ratios defined in the “Risk appetite in the UBI Banca Group” policy
and the “Policy to Manage Financial Risks of the UBI Banca Group”. More specifically the
indicators identified (details are given in the relative implementation documents) are as follows:

Common Equity Tier 1 (CET 1) Ratio;

Net Stable Funding Ratio (NSFR);

Liquidity Coverage Ratio (LCR);

Leverage Ratio (LR).
The values of these indicators are verified at the end of the period, on 31st December of each year
for the short-term incentive scheme and on 31st December 2017 for the long-term scheme.
The incentive schemes are not, however, triggered if the financial statements show a loss on
normalised amounts.
Short-term incentive scheme
On the basis of the performance in relation to the budget approved each year by the
Management and Supervisory Boards (calculated at Group level using RORAC and at the level of
the individual legal entity using normalised net profit adjusted for the “delta cost” between
allocated and absorbed capital) the budgeted amount (“bonus pool”) at the service of incentives
schemes may be increased, without prejudice to the correct remuneration of capital and liquidity,
up to a predetermined maximum, or reduced as far as zero (“malus”), both at the overall level and
at the level of each legal entity, in accordance with pre-established limits. If the available
allocation is overrun, criteria have been set for the bonuses to be redistributed, down to the level
of the budget allocated.
In line with the principles expressed in the legislation and regulations, from 2015 the structure
of the bonus payout is differentiated for the key personnel categories (“Top”, “Core” and “Other
Key personnel”).
Along the same lines as procedures followed for all “key personnel” in previous years, for
positions within the “Top” and “Core” perimeters:

50% of the bonus is converted into ordinary shares of UBI Banca, subject to retention
clauses that align the incentives with the Bank's long-term interests;

40% of the bonus is deferred for three years (for the Chief Executive Officer of UBI Banca,
60% is deferred for five years, while in previous years it was deferred for only three years).
As a consequence of the above, the first portion of share-based bonuses should be assigned in
the third year following the year of the scheme, while the second portion should be assigned in
the fifth year following the year of the scheme, except for the Chief Executive Officer for whom,
from this year, the second portion will be paid in the seventh year following the year of the
scheme.
For Other Key Personnel, taking into consideration the principle of proportionality and on the
basis of the size of the variable amounts, the payment rules are less strict, providing for the
deferral of 30% of the bonus for two years and excluding the use of financial instruments.
In order to ensure capital stability, liquidity and the capability to generate risk-adjusted profit
over time, consistently with the long-term strategic objectives of the Bank or company, the
302*
UBI Banca - Notes to the Financial Statements
deferred portion is paid on condition that adequate levels of capital stability (Common Equity Tier
1 Ratio), liquidity (Net Stable Funding Ratio) and risk-adjusted profit (RORAC) are maintained at
Group level, as set out in the corporate implementation regulations approved by the Supervisory
Board. The deferred portion of the bonus will not be paid if these conditions are not met (a malus).
From 2015, for the “Top” and “Core” perimeters, if the bonus earned is below €50,000 gross and
if the bonus earned individually is less than 15% of fixed remuneration, the payment is made
entirely upfront, 50% being paid in cash at the time when the conditions are met and the
remaining 50% as ordinary shares of UBI Banca with a two-year retention period. In previous
years the treatment just described was applied but did not consider the percentage of the
remuneration. It only considered whether the bonus earned was lower than €50,000.
Long-term incentive schemes (2015 – 2017)
A long-term incentive scheme on a three yearly basis has been introduced from 2015, intended
to bring the interests of management increasingly into line with those of shareholders, in a
perspective of creating value in the long-term as well as the short-term, in compliance with
legislation and regulations in force and best market practices.
While the preliminary trigger conditions (“gates”) are not affected, value creation objectives have
been set, taking into account the difficulties of the current context and evaluated on the basis of a
performance matrix with two indicators:

Group RORAC, calculated at the end of the three-year period and based on the average
return on three-year BTPs over the period in question;

Total Shareholder Return (TSR), which measures the performance of the UBI Banca share,
compared in terms of quartile positioning with the listed banks in the reference peer group.
The structure of the bonus payout provides for the following payments:

60% is paid upfront in shares at the end of the three-year performance measurement period
(accrual) with a two-year retention period;

40% is paid in shares, deferred by two years and with a one-year retention period. With a
view to compliance with legislation and regulations in force, the portion is awarded before the end
of the deferral period, but subject to a further year of retention to verify that the conditions for the
payment effectively exist.
In order to ensure capital stability and liquidity over time, consistent with long-term strategic
objectives, the deferred portion is paid on condition that adequate levels of capital stability
(Common Equity Tier 1 Ratio) and liquidity (Net Stable Funding Ratio) are maintained at the end
of the deferral period, as set out in the corporate implementation regulations. The deferred portion
of the bonus will not be paid if these conditions are not met (a malus).
The timetable for the grant of portions of bonuses to be paid in financial instruments
For the above, the timetable for portions of bonus payments made in financial instruments is as
follows:
the first portion of shares for bonuses earned in 2012 was granted in 2015;
in 2016 the first portion of the shares relating to the 2013 short-term incentive scheme and
the second portion of the shares relating to the 2011 short-term incentive scheme will be granted;
●
in 2017 the second portion of the shares relating to the 2012 short-term incentive scheme
and the first portion of the shares relating to the 2014 short-term incentive scheme will be
granted;
●
in 2018 the second portion of the shares relating to the 2013 short-term incentive scheme
and the first portion of the shares relating to the 2015 short-term incentive scheme will be
granted;
●
in 2019 the second portion of the shares relating to the 2014 short-term incentive scheme
will be granted;
●
in 2020 the second portion of the shares relating to the 2015 short-term incentive scheme
and the first portion of the shares relating to the 2015-2017 long-term incentive schemes will be
granted;
●
in 2021 the second portion of the shares relating to the 2015-2017 long-term incentive
schemes will be granted;
●
●
303*
UBI Banca - Notes to the Financial Statements
●
in 2022 the second portion of the shares relating to the 2015 short-term incentive scheme
earned by the Chief Executive Officer will be granted.
B.
Quantitative information
According to IFRS 2 “share-based payments”, the scheme in question constitutes an “equity
settled” operation where payment is based on shares and made using equity instruments. On this
basis, because the objective of IFRS 2 is to recognise the impact on profit and loss of the
remuneration paid by means of equity instruments in the income statement in the form of
personnel expense, UBI Banca and the subsidiaries involved in the scheme recognised the cost for
the year within the item 150a “Administrative expenses: staff costs” against an increase in equity
made by posting the amount to a separate reserve in equity because the obligation of the
company will be extinguished by the delivery of equity instruments and that obligation will be
settled in any event by the Parent.
As concerns the quantification of the cost of the scheme, since it is impossible to measure the
value of the services provided by employees with precision, in compliance with IFRS 2, it is
calculated on the basis of the fair value of the UBI share on the grant date multiplied by the
number of shares that it is estimated will be vested.
More specifically, the fair value of the equity instruments granted is calculated with account
taken of the circumstance that they will be delivered, as planned, starting in 2014 and until 2022.
Those estimates are based on the market price of the shares, less the present value of dividends
distributable by the UBI Group in the period immediately prior to the grant of the shares, and, in
general they adequately weight the terms and conditions governing the grant of the instruments.
The total estimated cost of the short-term incentive schemes for shares that will be granted from
2015 is €2,087 thousand, and is composed as follows:
●
up-front portions as follows:




14,441 shares granted in the 2015, equivalent to €49 thousand;
44,366 shares to be granted in 2016, equivalent to €207 thousand;
110,091 shares to be granted in 2017, equivalent to €614 thousand;
67,815 shares to be granted in 2018, equivalent to €476 thousand.
●
deferred portions (if the conditions to which the deferment is subject are met) as follows:






35,022 shares to be granted in 2016, equivalent to €92 thousand;
9,628 shares to be granted in 2017, equivalent to €30 thousand;
7,962 shares to be granted in 2018, equivalent to €35 thousand.
72,432 shares to be granted in 2019, equivalent to €378 thousand;
13,862 shares to be granted in 2020, equivalent to €92 thousand;
18,400 shares to be granted in 2022, equivalent to €116 thousand.
In accordance with the vesting conditions hypothesised, the cost of the scheme is spread over
the whole of its vesting period, with the portion for the year recognised in the income statement,
which for the reporting year amounted to €507 thousand. Furthermore, any change in the cost
will only occur if the vesting requirements are not met and the shares are not delivered as a
consequence, either because the result conditions set by the plan are not satisfied or the person is
no longer employed and not also as a result of changes in the fair value of UBI shares.
The total estimated cost of the long-term incentive scheme introduced in 2015 is €2,493
thousand and, as for the short-term scheme, it is distributed throughout the whole of the vesting
period set for it with recognition in the income statement of the portion for the year, which for the
current year amounts to €426 thousand, composed as follows:
●
228,017 shares to be granted in 2020, equivalent to €1,512 thousand;
●
152,012 shares to be granted in 2021, equivalent to €981 thousand.
304*
UBI Banca - Notes to the Financial Statements
Part L – Segment Reporting
Information on segment reporting is given in the relative section of the Consolidated Financial
Statements.
305*
UBI Banca - Notes to the Financial Statements
Attachments to the Annual Report
List of real estate properties
Convertible bonds
Disclosures concerning the fees of the independent auditors (Art. 149 duodecies of the Consob Issuers’
Regulations)
306*
UBI Banca - Notes to the Financial Statements
List of real estate properties
(amounts accurate to a euro cent)
Owned/
L eased
Location
Investments
1 ABBIAT EGRASSO-MI-P.ZZA CAVOUR, 11
O
1,348,370.66
2 ALBANO SANT ALESSANDRO-BG-VIA CAVOUR, 2
O
517,017.94
3 ALBINO-BG-VIA MAZZ INI, 181
O
Revaluations by law
-
Revaluation s o n
F.T.A.
Revalu ations by
mergers
Gross amo unts
Other changes
Accum. Depr.
Carrying amo unts
-
149,323.41
1,497,694.07
-
-
806,701.42
540,939.12
-
125,049.29
1,183,006.35
-
-
504,299.44
678,706.91
912,764.12
671,708.52
-
188,602.42
1,773,075.06
-
-
591,286.50
1,181,788.56
955,591.35
-
147,706.44
1,652,885.38 -
565,290.65
1,063,500.83
-
142,545.15
691,722.16
-
-
225,616.50
466,105.66
1,074,010.72
-
-
944,714.17
129,296.55
4 ALME-BG-VIA T ORRE D'OR O, 2
O
549,587.59
5 ALMENNO SAN BARTOLOMEO-BG-VIA FALCONE, 2
O
549,177.01
6 ALMENNO SAN SALVATORE-BG-VIA MARCONI, 3
O
459,148.82
524,901.58
-
89,960.32
7 ALZANO LOMBARDO-BG-P.ZZA GARIBALDI, 3
O
1,080,468.91
780,530.73
-
264,470.20
2,125,469.84 -
3,034.78 -
869,894.40
1,252,540.66
8 ALZANO LOMBARDO-BG-VIA EUROPA, 67
O
20,382.05
-
281,932.63
302,314.68
-
-
114,846.27
187,468.41
9 ANGERA-VA-VIA M. GREPPI, 33
O
166,386.85
444,930.52
-
175,948.70
787,266.07
-
-
377,078.46
410,187.61
10 ARCENE-BG-CORSO EUROPA, 7
O
544,716.17
507,105.34
-
86,447.03
1,138,268.54
-
-
1,033,020.07
105,248.47
11 ARCORE-MI-VIA CASATI, 45
O
977,807.23
242,785.55
-
176,942.62
1,397,535.40
-
-
804,680.07
592,855.33
12 ARDESIO-BG-VIA LOCATELLI, 8
O
145,284.01
633,300.47
-
126,889.62
905,474.10
-
-
776,142.85
129,331.25
13 ARLUNO-MI-VIA PIAVE, 5
O
1,260,946.93
14 ASSAGO-MI-VIALE MILANOFIORI
O
9,917,653.29
-
-
370,406.90
24,093.90 -
690,992.65
-
-
479,342.67
781,604.26
-
-
218,485.71
563,118.55
-
-
2,169,504.33
8,118,555.86
-
-
4,232,053.44
3,886,502.42
160,745.96
15 AZ ZAN O SAN PAOLO-BG-PIAZZA IV NOVEMBRE, 4
O
383,348.91
720,230.46
137,908.63
1,241,488.00
-
-
1,080,742.04
16 AZ ZATE- VA-VIA V.VENETO, 23
O
950,916.00
181,771.24
495,054.37
201,911.04
1,829,652.65
-
-
874,383.68
955,268.97
17 BAGN OLO SAN VITO-CN-VIA DI VITTORIO, 35
O
131,968.60
372,581.85
121,159.50
82,796.84
708,506.79
-
-
566,657.49
141,849.30
18 BERBEN NO-BG-VIA ANTONIO STOPPANI, 102
O
756,979.09
19 BERGAMO-BG-BORGO PALAZZO, 51
O
1,121,597.00
1,191,955.96
-
-
-
-
181,657.06
756,979.09 2,495,210.02
56,054.95 -
-
113,889.85
587,034.29
1,142,965.00
1,352,245.02
20 BERGAMO-BG-P.LE RISORGIMENT O, 15
O
1,053,420.36
574,958.09
-
16,438.02
1,644,816.47
-
-
814,777.63
830,038.84
21 BERGAMO-BG-P.Z ZA PONTIDA, 36/42
O
2,259,854.24
789,282.49
-
75,595.51
3,124,732.24
-
-
1,474,552.88
1,650,179.36
22 BERGAMO-BG-PIAZZA VITTORIO -VENETO, 8
O
35,481,852.58
85,664,910.69
2,511,566.91
123,952,719.06
-
-
53,573,650.12
70,379,068.94
23 BERGAMO-BG-VIA BORGO PALAZZO, 135
O
1,901,500.15
871,879.13
-
93,137.24
2,866,516.52
-
-
1,716,874.34
1,149,642.18
24 BERGAMO-BG-VIA BORGO S.CATERINA, 6
O
921,346.04
693,858.54
-
86,848.23
1,702,052.81
-
-
620,235.51
1,081,817.30
25 BERGAMO-BG-VIA D.L.PALAZZOLO 71
O
22,108,728.11
24,996,012.57
1,707,839.02
49,513,976.85
-
-
30,949,219.79
18,564,757.06
12,170,593.62
294,388.88
701,397.15
26 BERGAMO-BG-VIA F.LLI CALVI, 9
O
16,163,671.59
4,232,571.42
1,061,498.67
19,357,819.67
-
-
7,187,226.05
27 BERGAMO-BG-VIA GOMBITO, 2/C
O
137,366.80
1,059,591.45
-
89,643.09
1,286,601.34
-
-
683,791.72
602,809.62
28 BERGAMO-BG-VIA LEONE XIII, 2
O
28,537.26
448,491.84
-
43,188.08
520,217.18
-
-
372,431.53
147,785.65
-
23,075.33 -
29 BERGAMO-BG-VIA LOCATELLI, 37
O
5,640.00
30 BERGAMO-BG-VIA MAT TIOLI, 69
O
608,963.45
628,076.80
-
57,693.81
1,294,734.06
-
1,221,161.76
-
30,955.49
3,207,183.99
4,560.00
1,196,116.50
31 BERGAMO-BG-VIA SAN BERNARD INO,96
O
1,955,066.74
32 BERGAMO-BG-VIA TIRABOSCHI, 57
O
4,560.00
33 BESOZZ O-VA-VIA XXV APRILE, 24
O
137,252.44
694,784.05
34 BESOZZ O-VA-VIA XXV APRILE, 77
O
513,204.39
349,551.60
35 BIELLA-BI-VIA SAURO, 2
O
652,786.99
662,729.30
36 BISUSCHIO-VA-VIA MAZZINI, 28
O
171,346.39
258,221.79
-
-
-
-
-
-
364,080.01
324,324.01
62,116.88 -
5,640.00 -
0.06 -
696.54
4,943.40
-
500,887.05
793,847.01
-
-
1,956,536.69
1,250,647.30
-
-
519.84
4,040.16
-
-
572,336.52
623,779.98
266,820.01
111,233.86
1,298,313.86
-
-
1,031,493.85
189,245.32
1,188,387.85
-
-
552,318.95
636,068.90
78,995.63
508,563.81
-
-
218,196.66
290,367.15
175,892.65
686,122.09
-
37 BOLOGNA-BO-VIA REPUBBLICA, 29
O
840,896.42
21,118.32
-
38 BOLTIERE-BG-PIAZZA IV NOVEMBRE, 14
O
287,605.68
158,268.69
-
82,590.04
39 BREMBILLA-BG-VIA LIBERT A' , 25
O
648,972.22
361,575.07
-
58,264.25
40 BRESCIA-BS-VIA BREDINA, 2
O
2,685.58
463,764.42
-
32,789,671.20
-
528,464.41 1,068,811.54
466,450.00 -
-
182,149.97
503,972.12
1,033.41 -
166,551.69
360,879.31
-
-
976,083.94
92,727.60
84,911.38 -
84,479.83
297,058.79
10,951,720.75 -
18,607,666.01
38,540,423.87
41 BRESCIA-BS-VIA CEFALONIA, 62
O
13,406,697.93
-
-
46,196,369.13
42 BRESCIA-BS-VIA CIPRO, 54
O
6,760,711.43
-
-
-
6,760,711.43
-
-
3,049,120.64
3,711,590.79
43 BRESCIA-BS-VIA CODIGNOLE
O
3,885,969.63
-
-
-
3,885,969.63
-
-
1,674,751.29
2,211,218.34
1,064,556.90
44 BRESCIA-BS-VIA CROCIFISSA ROSA, 1
O
7,117.05
-
-
1,572,178.80
1,579,295.85
-
-
514,738.95
45 BRESCIA-BS-VIA F ARFENGO, 65
O
2,369.50
-
-
710,185.73
712,555.23
-
-
288,703.37
423,851.86
46 BRESCIA-BS-VIA GABRIELE ROSA, 71
O
154.94
468,576.65
209,903.95 -
178,139.76
500,495.78
4,661,112.30
570,801.35
92,247.11
468,731.59
47 BRESCIA-BS-VIA GRAMSCI, 39
O
3,063,806.23
11,030,406.06
-
10,096,148.45
48 BRESCIA-BS-VIA SOLDINI, 25
O
41,987.95
1,401,996.05
-
-
14,757,260.75
1,443,984.00
855,912.55 -
-
920,866.75
1,379,029.80
49 BRESCIA-BS-VIA T RENTO, 5/7
O
797,240.86
6,950,467.87
-
-
7,747,708.73 -
193,239.03 -
3,133,736.54
4,420,733.16
50 BRESCIA-BS-VIA VITTORIO EMANUELE, 60
O
1,370,137.16
91,200.25
-
35,262.39
1,496,599.80
-
-
497,120.69
999,479.11
51 BRIGNANO GERA D'AD DA-BG-PIAZZA MONSIGNOR D ONINI, 1
O
621,767.52
604,977.47
-
220,865.61
1,447,610.60
-
-
882,620.57
564,990.03
52 BULCIAGO-LC-VIA DON DAVIDE CANALI, 33/35
O
63,891.84
456,650.05
53 BUSTO ARSIZIO-VA-P.ZZA S.GIOVAN NI, 3/A
O
3,364,165.32
5,333,880.25
54 BUSTO ARSIZIO-VA-VIA FOSCOLO, 10
O
2,116,377.81
703,886.44
55 BUSTO ARSIZIO-VA-VIA MAGENTA, 64
O
640,220.64
321,366.12
56 BUSTO ARSIZIO-VA-VIALE CADORNA, 4
O
2,228,244.91
775,192.51
57 CAIRATE-VA-VIA MAZZ INI, 13
O
142,562.37
244,680.85
58 CALCIO-BG-VIA P. GIOVANNI XXIII, 153
O
529,561.96
187,376.66
1,364,348.30
38,728.74 316,367.18
-
307*
70,450.65
590,992.54
-
-
264,516.85
326,475.69
808,210.12
10,870,603.99
-
-
5,458,232.32
5,412,371.67
273,859.89 -
1,348,372.22
1,423,739.30
225,707.16
3,045,971.41 -
143,461.10
856,854.40
-
-
482,437.04
374,417.36
196,879.35
3,200,316.77
-
-
1,836,137.92
1,364,178.85
102,490.01
806,100.41
-
-
627,973.04
178,127.37
80,100.81
797,039.43
-
-
410,111.55
386,927.88
UBI Banca - Notes to the Financial Statements
(contd.)
Owned/
L eased
Location
Investments
Revaluations by law
Revalu ations by
mergers
59 CALOLZIOCORT E-LC-P.Z ZA V.VENETO, 18/A
O
1,127,737.41
353,193.48
-
60 CALUSCO D ADDA-BG-VIA V. EMANUELE, 35
O
584,456.68
452,869.26
Revaluations o n
F.T.A.
-
Gross amo unts
Other changes
Accum. Depr.
Carrying amo unts
309,382.40
1,171,548.49
-
-
456,201.54
715,346.95
-
94.71
1,037,420.65
-
-
445,926.74
591,493.91
-
-
381,097.52
364,363.60
275,425.14 -
513,343.90
369,313.56
1,727,731.11
215,862.04
61 CANN OBIO-VB-VIA UMBERTO I, 2
O
112,620.89
241,425.16
-
391,415.07
745,461.12
62 CANT ELLO-VA-VIA TURCONI, 1
O
789,611.84
272,664.26
-
95,806.50
1,158,082.60 -
63 CARAVAGGIO-BG-PIAZ ZA GARIBALD I, 1
O
672,002.20
1,093,316.87
-
178,274.08
1,943,593.15
-
-
64 CARD ANO AL CAMPO- VA-VIA G. DA CARDANO, 19
O
498,905.46
118,232.07
684,246.62
177,995.50
1,479,379.65
-
-
686,187.76
793,191.89
65 CARONNO PERTUSELLA-VA-VIA ROMA, 190
O
1,094,866.17
248,746.12
495,118.52
273,819.79
2,112,550.60
-
-
895,497.31
1,217,053.29
519,635.84
66 CARVICO-BG-VIA EUROPA UNITA , 3
O
1,108,279.50
521,112.70
-
115,687.56
1,745,079.76
-
-
1,225,443.92
67 CASAZZA-BG-STR.N AZ.DEL TONALE,92
O
235,154.76
666,007.04
-
112,689.37
1,013,851.17
-
-
914,851.60
98,999.57
68 CASORAT E SEMPIONE-VA-VIA MILANO, 17
O
619,750.32
150,867.79
123,011.05
960,317.37
-
-
521,606.69
438,710.68
69 CASSAN O D AD DA-MI-VIA MILANO, 14
O
1,259,734.57
1,083,226.98
-
398,243.13
2,741,204.68
-
-
2,230,471.81
510,732.87
70 CASSINA DE PECCHI-MI-VIA CARDUCCI, 74
O
3,873.43
6,774.52
-
3,397.03
14,044.98
-
-
11,796.71
2,248.27
71 CASSINA DE PECCHI-MI-VIA MATTEOT TI, 2/4
O
799,800.49
587,516.32
-
5,038.89
1,392,355.70
-
-
590,064.79
802,290.91
833,494.70
-
-
304,619.48
528,875.22
53.10 -
457,757.00
55,255.54
1,150,103.10
599,867.51
-
66,688.21
72 CASTEL MELLA-BS-VIA QUINZANO, 80/A
O
660,764.26
-
172,730.44
73 CASTIONE DELLA PRESOLANA-BG-VIA MANZONI, 20
O
79,418.46
365,664.10
-
67,983.08
74 CASTRONNO-VA-VIA ROMA, 51
O
614,570.96
801,314.36
-
334,085.29
513,065.64 1,749,970.61
-
-
75 CENE-BG-VIA V.VENETO, 9
O
231,970.33
737,520.91
-
159,197.12
1,128,688.36
-
-
898,046.65
230,641.71
76 CERMENATE-CO- VIA MATTEOTTI, 28
O
1,482,116.60
1,138,872.31
-
312,228.24
2,933,217.15
-
-
1,865,135.97
1,068,081.18
77 CESANO MAD ERNO-MI- VIA CONCILIAZ IONE, 28
O
813,616.21
91,949.55
-
294,942.43
610,623.33
-
-
179,060.77
431,562.56
78 CHIARI-BS-VIA BETTOLINI, 6
O
1,266,771.26
1,885,202.58
-
490,849.50
3,642,823.34
-
-
1,572,719.17
2,070,104.17
137,242.00 -
-
79 CHIUDUNO-BG-VIA C.BAT TIST I, 1
O
360,882.78
519,549.12
-
175,302.89
1,055,734.79 -
80 CINISELLO BALSAMO-MI-VIA LIBER TA', 68
O
445,533.64
35,806.58
-
33,290.05
514,630.27
-
-
357,310.02
561,182.77
-
156,578.17
358,052.10
199,229.80
81 CISANO BERGAMASCO-BG-VIA PASCOLI, 1
O
200,764.42
1,124,656.71
82 CISLAGO-VA-VIA IV NOVEMBRE, 250
O
794,801.88
28,545.63
83 CITTIGLIO- VA-VIA VALCUVIA, 19
O
175,448.37
501,776.79
84 CLUSONE- BG-VIA VERDI, 3
O
812,026.26
1,271,882.54
-
256,029.95
2,339,938.75
-
-
2,039,717.92
300,220.83
85 CODOGNO-LO-VIA VITTORIO EMANUELE, 35
O
603,971.83
1,514,031.18
-
479,316.49
2,597,319.50
-
-
2,061,604.57
535,714.93
500,822.70 -
192,632.03
1,518,053.16
-
-
1,318,823.36
187,600.37
1,136,569.84
-
-
444,946.16
691,623.68
119,189.29
796,414.45
-
-
521,786.98
274,627.47
86 COLERE-BG-VIA GIOVANNI XXIII, 33
O
23,218.93
210,357.59
-
40,918.81
274,495.33
-
-
240,484.05
34,011.28
87 COMER IO-VA-VIA AL LAGO, 2
O
1,243,671.64
675,712.57
-
229,671.70
2,149,055.91
-
-
1,635,164.73
513,891.18
88 COMO-C O-VIA ALDO MORO, 46/48
O
758,223.64
89 COMO-C O-VIA CATTANEO, 3
O
465,143.48
2,441,785.01
-
-
-
775,298.65
320,220.71
1,078,444.35
-
-
378,219.97
700,224.38
247,088.45
2,659,840.04
-
-
1,791,009.92
868,830.12
3,526,790.41
90 COMO-C O-VIA GIOVIO, 4
O
2,259,909.73
5,116,802.76
863,028.37
9,015,039.51
-
-
5,488,249.10
91 COMUN NUOVO-BG-VIA C.BAT TISTI, 3
O
182,746.11
47,517.62
-
36,807.08
267,070.81
-
-
111,572.87
155,497.94
92 CONCESIO-BS-VIALE EUROPA, 183
O
1,995,092.87
582,587.76
-
289,026.46
2,866,707.09 -
3,959.24 -
2,073,025.50
789,722.35
93 CORNAREDO-MI-PIAZZ A LIBERT A' , 62
O
856,302.43
17,667.41
-
-
375,797.67
498,172.17
-
-
151,341.62
346,830.55
94 CORNATE D AD DA-MI-VIA CIRCONVALLAZ IONE, 12
O
362,726.51
109,589.60
-
-
9,234.77
463,081.34
-
-
240,622.00
222,459.34
95 CORSICO-MI-VIA LIBERAZIONE, 26/28
O
959,229.16
73,217.47
-
97,630.25
1,130,076.88
-
-
436,760.16
693,316.72
96 COSSATO-BI-VIA PAJETTA
O
58,454.65
179,362.97
-
53,640.83
291,458.45
-
-
106,448.32
185,010.13
338,642.27
97 COSTA VOLPINO-BG-VIA NAZION ALE, 150
O
266,835.41
997,084.61
-
191,717.85
1,455,637.87
-
-
1,116,995.60
98 CREMONA-CR-VIA GIORDANO, 9/21
O
715,645.83
33,603.51
-
234,382.24
983,631.58
-
-
371,574.87
612,056.71
99 CUNARDO-VA-VIA LUINESE, 1
O
1,019,742.55
376,413.10
-
299,283.76
1,695,439.41
-
-
1,116,906.35
578,533.06
100 CURNO- BG-LARGO VITTORIA, 31
O
797,649.45
85,343.51
-
101 CUVEGLIO-VA-VIA BATT AGLIA SAN MARTINO, 50
O
1,025,757.29
618,677.66
-
102 CUVIO-VA- VIA MAGGI, 20
O
342,956.37
18,785.28
103 DALMINE-BG-VIA BUTT ARO N.2
O
2,398,327.05
1,211,238.38
249,427.23
-
63,323.21
-
191,881.54
946,316.17 -
25,923.20 -
361,162.55
559,230.42
923,794.63
528,758.78
1,452,553.41
-
-
43,584.53
654,753.41
-
-
299,345.07
355,408.34
252,983.38
3,862,548.81
-
-
1,779,072.03
2,083,476.78
-
-
1,630,941.10
202,867.65
3,379.06 -
2,423,606.40
2,342,687.14
104 DARF O BOARIO TERME-BS-PIAZ ZA LORENZ INI, 6
O
626,383.13
1,038,400.90
-
169,024.72
1,833,808.75
105 DESIO- MI-VIA MATTEOTTI, 10
O
3,950,832.89
408,994.01
-
409,845.70
4,769,672.60 -
106 ERBA-CO-VIA LEOPARDI, 7/E
O
1,483,898.86
186,267.51
219,792.83
1,889,959.20
-
-
1,008,327.65
881,631.55
107 FAGNANO OLONA- VA-PIAZZA CAVOUR, 11
O
129,505.30
222,872.16
757,263.46
121,805.53
1,231,446.45
-
-
1,057,994.40
173,452.05
108 FERNO-VA-PIAZZ A DANTE, 7
O
1,756,904.10
230,927.71
92,520.46
760,879.63 -
1,002,505.08
384,138.80
109 FONT ANELLA- BG-VIA CAVOUR, 156
O
2,101.90
-
-
110 FORMIGINE-MO-VIA GIARDINI SUD, 22
O
1,874,321.37
-
-
-
67,171.24
2,147,523.51 -
502,170.54
504,272.44
-
1,874,321.37 -
-
-
222,835.27
281,437.17
375,645.70 -
210,504.46
1,288,171.21
3,369,886.99
111 GALLARATE-VA-VIA MANZONI N. 12
O
2,619,953.52
1,645,212.28
1,342,766.34
528,620.53
6,136,552.67
-
-
2,766,665.68
112 GALLARATE-VA-VIA MARSALA, 34
O
422,744.00
59,140.47
19,507.33
86,736.48
588,128.28
-
-
343,065.39
245,062.89
113 GALLARATE-VA-VIA VARESE, 7A
O
342,012.52
97,202.49
298,506.02
115,441.18
853,162.21
-
-
345,735.76
507,426.45
885,805.14
242,201.51
1,949,461.77
-
114 GANDINO-BG-VIA BAT TIST I, 5
O
821,455.12
115 GARBAGNAT E MILANESE-MI-VIA J. F. KENNEDY, 3
O
1,369,074.76
116 GAVIRATE-VA-P.ZZA LIBERTA'
O
300,612.42
1,411,845.75
989,682.45
308*
293,983.71
-
1,515,184.66
434,277.11
1,369,074.76 -
43,257.09 -
219,646.67
1,106,171.00
2,996,124.33 -
7,545.52 -
1,639,340.00
1,349,238.81
UBI Banca - Notes to the Financial Statements
(contd.)
Revaluations by law
Revalu ations by
mergers
Revaluation s o n
F.T.A.
117 GAZZADA SCHIANNO-VA-VIA ROMA, 47/B
O
Owned/
L eased
832,764.66
719,147.70
178,009.15
309,902.21
2,039,823.72
-
-
1,329,478.77
118 GAZZANIGA-BG-VIA MARCONI, 14
O
820,947.13
451,394.50
435,364.90
156,404.94
1,864,111.47
-
-
1,733,795.10
130,316.37
119 GENOVA-GE-VIA FIESCHI, 11
O
1,994,025.48
4,261,950.88
-
423,268.23
5,832,708.13
-
-
3,137,953.43
2,694,754.70
120 GENOVA-GE-VIA MERANO, 1/A NERO
O
204,642.60
341,265.06
-
121 GOR GONZ OLA-MI-PIAZZA CAGNOLA -VIC OLO CORRIDONI
O
1,453,314.91
122 GOR LA MAGGIORE-VA-VIA G.VERDI, 2
O
1,537,138.82
123 GOR LAGO-BG-PIAZZA GREGIS, 12
O
303,550.52
456,798.52
-
114,232.45
124 GRASSOBBIO-BG-VIALE EUROPA, 8/B
O
40,681.09
281,919.10
-
69,128.64
125 GRUMELLO DEL MONTE-BG-VIA MART IRI D. LIB.14
O
261,723.81
923,153.28
-
126 IN DUNO OLONA-VA-VIA POR RO, 46
O
275,273.42
672,530.58
127 ISPRA-VA-VIA MAZZINI, 5
O
595,811.07
185,352.30
128 JERAGO CON ORAGO-VA- VIA MATTEOTTI, 15
O
1,806,065.06
129 LAINATE-MI-VIA GARZOLI, 17/19
O
213,013.71
729,733.26
-
93,378.46
130 LAVENA PONT E T RESA-VA-PIAZZA GRAMSCI, 8
O
479,992.49
686,229.36
-
243,450.02
131 LAVENO-MOMBELLO-VA-VIA LABIENA, 51/53
O
503,572.34
359,912.42
132 LECCO-LC-CORSO MATT EOTTI, 3
O
6,206,082.91
4,274,614.11
-
133 LEFFE-BG-VIA G. MOSCON I, 1
O
842,808.10
1,218,140.03
134 LEGGIUNO-VA-VIA BERNAR DONI, 9
O
113,091.98
382,146.88
135 LEGNANO-MI-VIA TOSELLI, 68
O
49,184.24
6,097.36
136 LEGNANO-MI-VIA TOSELLI, 74
O
1,547,863.61
137 LODI-LO-VIA DALMAZIA
O
14,107.33
11,551.50
-
138 LODI-LO-VIA IN CORONATA, 12
O
657,248.12
2,503,863.52
-
Location
Investments
-
-
-
-
97,097.39
-
-
Other changes
Accum. Depr.
Carrying amo unts
710,344.95
643,005.05 -
11,855.68 -
185,672.31
445,477.06
1,453,314.91 -
166,924.24 -
240,211.63
1,046,179.04
-
461,717.59
765,647.97
5,552.53 -
384,194.85
484,834.11
391,728.83
-
-
154,806.88
236,921.95
195,143.44
1,380,020.53
-
-
690,818.00
689,202.53
99,900.50
103,501.46
1,151,205.96
-
-
574,906.24
576,299.72
394,460.51
89,054.07
1,264,677.95
-
-
1,030,657.72
234,020.23
1,806,065.06 -
188,604.87 -
188,724.40
1,428,735.79
1,036,125.43 -
1,712.17 -
532,011.31
502,401.95
1,225,630.63
184,041.24
-
309,773.26
Gross amo unts
-
335,418.52
1,227,365.56
874,581.49 -
1,409,671.87
-
-
-
116,849.91
1,315,753.19
-
-
903,894.82
411,858.37
2,777,915.51
7,702,781.51
-
-
4,029,773.48
3,673,008.03
-
229,772.41
2,290,720.54
-
-
1,133,053.13
1,157,667.41
-
144,671.95
639,910.81
-
-
574,260.75
65,650.06
-
9,805.63
65,087.23
-
-
27,198.87
37,888.36
10,289.21 -
894,497.90
909,237.71
-
92,504.76
173,656.45
-
2,658.05
23,000.78
-
-
8,367.33
14,633.45
704,483.27
3,865,594.91
-
-
1,408,855.81
2,456,739.10
122,877.00
1,136,814.32 -
499,841.19
619,889.99
269,282.57
1,846,044.09
-
-
1,199,407.48
646,636.61
139 LONATE POZZOLO-VA-PIAZZA MAZZ INI, 2
O
580,176.48
102,307.16
140 LOVERE-BG-VIA TADINI, 30
O
703,360.10
873,401.42
141 LUGANO PIAZZA RIFORMA, 2 / 3
O
26,103,661.84
142 LUINO-VA-VIA PIERO CHIARA, 7/9
O
806,712.56
6,827,496.32
143 LUINO-VA-VIA V.VENETO, 6/A-B
O
694,194.68
1,561,186.53
144 LURAT E CACCIVIO-CO-VIA VARESINA, 88
O
354,367.67
427,340.22
145 MADON E-BG-VIA PAPA GIOVAN NI XXIII, 44
O
517,290.07
782,374.32
146 MALNATE-VA- P.ZZA REPUBBLICA / ANG. VIA GARIBALDI
O
2,097,965.27
147 MANERBIO-BS-VIA D.ALIGHIERI, 5
O
922,839.19
1,258,583.13
-
276,298.29
2,457,720.61
-
-
148 MARCHIROLO-VA-PIAZZA BORASIO, 12
O
189,792.52
155,883.17
-
52,498.93
398,174.62
-
-
224,510.70
173,663.92
149 MARIANO COMENSE-CO-CORSO BRIANZA, 20
O
343,167.69
168,668.17
94,789.87
109,942.77
716,568.50
-
-
348,669.71
367,898.79
150 MARNATE-VA-VIA DIAZ ANGOLO VIA GENOVA
O
541,275.04
481,053.04
476,251.61
231,863.71
1,730,443.40
-
-
772,571.51
957,871.89
151 MARTINENGO-BG-VIA PINETTI, 20
O
757,998.73
409,405.14
221,210.88
1,388,614.75
-
-
517,347.12
871,267.63
152 MILANO - P.ZZA TOMMASEO
O
70,128.45
70,128.45
-
-
35,891.21
34,237.24
153 MILANO-MI-CORSO EUROPA 16
O
4,131,655.19
7,638,500.83
154 MILANO-MI-CORSO EUROPA 20
O
2,249,835.90
26,254,884.08
155 MILANO-MI-CORSO ITALIA, 20-22
O
4,359,275.73
9,549,009.54
156 MILANO-MI-P.LE ZAVATTARI, 12
L
30,165,849.87
157 MILANO-MI-P.ZZA 5 GIORNATE, 1
O
1,831,351.82
158 MILANO-MI-P.ZZA TOMMASEO
O
159 MILANO-MI-PIAZZA PIOLA, 8
O
160 MILANO-MI-VIA BIONDI, 1
O
513,505.96
306,102.04
161 MILANO-MI-VIA BOCCACCIO, 2
O
3,676,015.70
10,309,603.00
-
162 MILANO-MI-VIA BOCCHETT O, 13/15
O
865,905.80
5,932,491.44
-
163 MILANO-MI-VIA BORGOGNA, 2/4
O
1,207,723.22
5,160,001.56
-
164 MILANO-MI-VIA BUONARROTI, 22
O
2,732,186.32
7,621,838.92
165 MILANO-MI-VIA CIRO MENOTTI, 21
O
345,373.51
1,260,180.31
166 MILANO-MI-VIA DELLA MOSCOVA, 38
O
814.79
773,378.70
167 MILANO-MI-VIA DELLA MOSCOVA, 40/1
O
744,949.97
168 MILANO-MI-VIA F. LON DONIO, 29
O
498.26
22,897.12
-
169 MILANO-MI-VIA G.B. GR ASSI, 89
O
1,335,715.77
1,003,435.40
-
822,473.03
-
-
-
2,752,151.53
O
1,041,947.88
1,104,882.62
18,244,046.86
7,663,576.59
358,038.13
O
433,495.98
174 MILANO-MI-VIA PADOVA, 97
O
1,475,906.60
26,103,661.84
-
-
1,085,333.49
25,018,328.35
8,333,476.62
-
-
7,176,153.97
1,157,322.65
132,928.82
2,597,835.91
-
-
1,308,433.37
1,289,402.54
-
169,535.24
951,243.13
-
-
440,391.75
510,851.38
-
133,981.12
1,433,645.51
-
-
1,257,318.29
176,327.22
327,024.71
1,583,274.64
1,873,172.86
584,547.75
209,525.88
-
1,348,271.97
-
-
-
-
2,097,965.27 -
187,665.92 -
-
20,342,420.20
32,112,576.22
-
-
8,236,009.99
23,876,566.23
-
22,223,555.42
50,728,275.40
-
-
21,642,628.72
29,085,646.68
2,756,830.82
11,175,727.92
-
-
3,464,106.17
7,711,621.75
30,165,849.87
-
-
3,486,301.89
26,679,547.98
1,054,390.58
3,529,112.77
-
-
1,146,852.61
2,382,260.16
57,699.20
57,699.20
-
-
10,482.74
47,216.46
219,305.77
603,167.26
-
-
126,024.82
477,142.44
24,273.47 -
-
-
-
17,083.14 -
699,267.74
-
O
O
-
-
171 MILANO-MI-VIA MANZONI, 7
172 MILANO-MI-VIA MASCAGNI
-
-
170 MILANO-MI-VIA LOVANIO, 5/A
173 MILANO-MI-VIA MONTE SANTO, 2
331,453.68
1,814,024.82 -
-
-
1,446,378.73 -
-
1,248,828.77 -
16,408,125.98
-
117,038.27
2,148,948.46
6,443,734.30
20,429,353.00
82,710.40 -
-
660,304.29
1,571,354.57
3,551,621.91
16,877,731.09
2,206,788.22
4,591,609.02
-
-
849,701.60
3,741,907.42
1,139,105.37
7,506,830.15
-
-
2,057,227.68
5,449,602.47
23,105.47
10,377,130.71
-
-
4,612,331.33
5,764,799.38
649,000.47
2,205,382.12
-
-
717,378.60
1,488,003.52
164,604.51
609,588.98
-
-
137,623.57
471,965.41
446,501.39
1,191,451.36
-
-
179,802.87
1,011,648.49
357,837.60
23,395.38
2,696,988.77
22,340.95 -
-
6,107.24
39,629.09
1,444,411.20
1,252,577.57
25,364.28
2,172,194.78
-
-
333,747.52
1,838,447.26
2,768,353.06
45,084,102.49
-
-
6,643,875.95
38,440,226.54
-
431,830.01
789,868.14
-
-
201,288.70
588,579.44
-
155,902.36
1,937,670.31
-
-
245,338.14
1,692,332.17
-
737.27
211,219.65 -
362,438.29
902,985.93
309*
1,476,643.87 -
UBI Banca - Notes to the Financial Statements
(contd.)
Owned/
Leased
Location
Investments
Revaluations by law
Revalu ations by
mergers
175 MILANO-MI-VIA ROSELLINI, 2
O
899,366.97
1,457,082.17
-
176 MILANO-MI-VIA SAFFI, 6/5 ANG. VIA MONTI
O
5,245,633.96
94,749.53
-
177 MILANO-MI-VIA SECCHI, 2
O
2,524,472.54
166,836.60
-
178 MILANO-MI-VIA SOLFERINO, 23
O
1,601,524.88
179 MILANO-MI-VIA STARO, 1
O
130,223.14
180 MILANO-MI-ZURETTI, 1
O
181 MONCALIERI-TO-STRADA VILLASTELLONE, 2
Revaluations o n
F.T.A.
-
Gross amo unts
Other changes
Accum. Depr.
Carrying amo unts
577,230.31
2,933,679.45
-
-
1,039,931.08
1,893,748.37
44,947.36
5,295,436.13
-
-
1,018,353.54
4,277,082.59
750,318.11
3,441,627.25
-
-
790,602.19
2,651,025.06
-
-
1,601,524.88 -
3,945.68 -
30,091.60
1,567,487.60
325,338.70
-
-
455,561.84
78,550.03 -
200,104.13
334,007.74
5,637.45
100,385.65
-
-
106,023.10
35,143.69 -
39,408.14
101,758.65
O
727,294.60
55,323.18
445,620.38
411,797.72
182 MONZA-MI- PIAZZA GIUSEPPE CAMBIAGHI, 1
O
3,001,925.00
183 MONZA-MI- VIA BORGAZZI, 83
O
4,882,395.79
3,588,165.85
192,786.22
-
-
184 MORNAGO-VA-VIA CELLINI - ANGOLO VIA CARUGO
O
126,637.16
185 NAPOLI-NA-VIA SANTA BRIGIDA, 62/63
O
1,864,197.10
186 NEMBRO-BG-PIAZZA DELLA LIBERTA'
O
2,134,739.10
4,450.27
187 NOVA MILANESE-MI-VIA BRODOLINI, 1
O
966,654.63
500,577.80
188 NOVARA-NO-CORSO DELLA VIT TORIA, 1
O
2,216,624.18
688,842.81
-
189 NOVARA-NO-LARGO DON MINZONI, 1
O
3,194,684.75
93,250.95
190 NOVARA-NO-VIA SOLFERINO
O
173,529.51
23,971.12
191 OLGIATE OLONA-VA-VIA MAZ ZINI, 54/56
O
325,724.31
236,897.41
226,056.58 -
-
434,080.23
-
151,256.26
857,418.10
924,667.17
2,077,257.83
220,444.43
8,691,006.07 -
-
-
-
-
515,344.66
1,561,913.17
30,031.32 -
5,034,998.11
3,625,976.64
99,704.06
853,207.67
-
-
751,560.60
101,647.07
69,102.26
1,933,299.36
-
-
346,571.82
1,586,727.54
-
-
1,321,879.72
1,149,249.11
46,900.36 -
986,040.88
1,692,691.17
-
1,216,503.59
1,393,707.86
2,039,613.70
331,939.46
2,471,128.83
527,419.10
2,725,632.41 -
-
295,255.54
2,610,211.45
-
152,046.45 -
730,980.88
-
203,461.37
3,236,520.78
-
-
1,196,907.08
-
66,836.42
130,664.21
-
-
56,106.71
74,557.50
206,371.83 -
69,769.81
699,223.74
-
-
321,480.46
377,743.28
-
192 ORIGGIO-VA-VIA REPUBBLICA 10
O
494,816.12
47,520.35
-
71,405.65
613,742.12
-
-
279,410.08
334,332.04
193 ORZINUOVI-BS-P.ZA V.EMANUELE, 31/33
O
681,328.53
307,827.14
-
111,612.08
1,100,767.75
-
-
421,284.00
679,483.75
194 OSIO SOTTO-BG-VIA CAVOUR, 2
O
788,885.09
755,038.69
-
266,698.76
1,810,622.54
-
-
833,837.96
976,784.58
195 OSPIT ALETTO-BS-VIA M.D.LIBERTA' , 27
O
2,085,732.69
768,771.35
-
326,047.27
3,180,551.31
-
-
2,148,215.33
1,032,335.98
196 PALADINA-BG-VIA IV NOVEMBRE, 13
O
331,135.18
408,403.74
-
73,903.02
813,441.94
-
-
752,335.21
61,106.73
197 PALAZZOLO SULL OGLIO-BS-PIAZZA ROMA, 1
O
350,073.67
1,388,091.49
-
180,356.07
1,918,521.23
-
-
1,028,361.46
890,159.77
198 PAVIA-PV-PIAZZA DUOMO, 1
O
446,217.06
588,387.60
-
553,293.40
1,587,898.06
-
-
662,325.83
925,572.23
199 PAVIA-PV-VIA MONTEBELLO DELLA BATTAGLIA, 2
O
444,869.33
955,931.86
-
1,038,088.80
2,438,889.99
-
-
1,676,278.97
762,611.02
200 PERUGIA-PG-VIA DEI FILOSOFI, 36
O
151,589.80
148,860.67
-
6,965.21
201 PIACENZA-PC -VIA VERDI, 48
O
3,550,621.14
1,730,724.78
-
649,858.93
202 PIAZZA BREMBANA-BG-VIA BELOT TI, 10
O
333,259.42
241,400.70
203 POGGIO RUSC O-MN-VIA TRENT O E TRIESTE, 9
O
1,772,102.39
1,314,622.43
-
204 PONTE NOSSA-BG-VIA G. FRU A, 24
O
680,063.69
393,984.57
205 PONTE SAN PIET RO-BG-P.ZZ A SS.PIETRO E PAOLO, 19
O
1,405,541.59
1,561,117.33
317,125.98
-
307,415.68 5,931,204.85
37,716.72 -
-
77,013.53
192,685.43
3,335,481.42
2,595,723.43
75,771.40
650,431.52
-
-
473,843.24
176,588.28
384,094.82
4,541,209.25 -
6,863.42 -
2,320,546.74
2,213,799.09
-
132,516.89
1,206,565.15
-
-
905,150.65
301,414.50
-
345,879.38
3,312,538.30
-
-
2,003,948.25
1,308,590.05
99,863.59
788,615.28
-
-
310,392.43
478,222.85
701,416.00
-
-
121,293.81
580,122.19
606,844.35 -
224,803.02
525,489.19
1,070,389.61
206 PONTERANICA-BG-VIA PONTESECCO, 32
O
371,625.71
207 PONTIDA-BG-VIA LEGA LOMBARDA, 161
O
701,416.00
208 PORTO C ERESIO-VA-VIA ROMA, 2
O
1,014,941.17
161,518.28
-
180,677.11
1,357,136.56 -
209 RANICA-BG-PIAZZA EU ROPA, 2
O
79,928.46
726,162.49
-
126,700.02
932,790.97
-
-
756,520.76
176,270.21
210 RAPALLO-GE-VIA DIAZ, 6
O
45,351.56
522,555.39
-
135,054.40
702,961.35
-
-
199,604.69
503,356.66
211 REZZATO-BS-VIA EUROPA, 5
O
58,757.17
572,633.99
-
139,925.69
771,316.85
-
-
305,978.70
465,338.15
212 ROMA-RM-CORSO VITTORIO EMANUELE, 25/27
O
1,542,739.99
1,914,853.11
-
378,063.56
3,079,529.54
-
-
843,181.94
2,236,347.60
213 ROMA-RM-VIA DEI CROCIFER I, 44
O
12,160,249.72
18,111,353.67
-
3,862,345.24
34,133,948.63
-
-
3,657,704.74
30,476,243.89
214 ROMA-RM-VIALE DELLE PROVINCIE, 34/36
O
1,391,883.25
356,529.88
1,035,353.37
-
-
129,237.88
906,115.49
215 ROMAN O DI LOMBARDIA-BG-VIA TADINI, 2
O
666,927.28
573,922.63
-
192,184.07
1,433,033.98
-
-
600,533.59
832,500.39
216 ROSASCO-PV-VIA ROMA, 4
O
42,352.68
293,806.91
-
467,297.63
803,457.22
-
-
682,815.93
120,641.29
217 ROVELLASCA-CO-VIA VOLTA, 1
O
2,207.70
-
638,358.20
640,565.90
-
-
292,156.49
348,409.41
218 ROVETTA-BG-VIA TOSI, 13
O
828,169.69
-
76,516.13
1,348,260.21 -
91.89 -
1,220,704.56
127,463.76
219 ROZZANO-MI-P.ZZ A BERLINGUER, 6
O
874,314.34
-
-
220 ROZZANO-MI-VIALE LOMBARDIA, 17
O
851,954.35
-
-
221 SAN GIOVANNI BIANCO-BG-V MARTIRI DI CAN TIGLIO, 19
O
356,940.74
222 SAN GIULIANO MILANESE-MI-VIA F.LLI CERVI, 31
O
687,797.88
-
-
443,574.39
541,085.49
-
-
-
-
-
-
-
-
281,840.27
1,156,154.61
-
-
374,424.48
781,730.13
334,236.66
517,717.69
-
-
141,990.46
375,727.23
125,156.92
1,023,183.15
-
-
406,958.06
616,225.09
-
-
286,795.29
401,002.59
-
-
120,664.13
280,338.46
-
-
218,375.97
860,085.36
-
-
249,402.25
610,683.11
295,448.06 -
603,731.85
81,636.71
223 SAN LAZZARO DI SAVENA-BO-VIA EMILIA, 208
O
1,078,461.33
224 SAN PAOLO-BS-VIA MAZZINI, 60
O
731,503.50
208,477.41
-
40,835.71
225 SAN PELLEGRINO T ERME-BG-VIA SAN CARLO, 3
O
306,129.17
310,504.84
-
107,525.92
724,159.93
-
-
299,464.78
424,695.15
226 SAN ZENO NAVIGLIO-BS-VIA TITO SPERI, 1
O
579,652.34
1,020,574.43
-
260,257.44
1,860,484.21 -
326.85 -
1,480,562.63
379,594.73
227 SANT OMOBONO T ERME-BG-VIA ALLE F ONTI, 8
O
281,498.71
405,402.75
-
83,480.52
770,381.98
-
-
559,563.87
210,818.11
228 SANTENA-TO-VIA CAVOUR, 43
O
605,388.24
194,215.54
27,222.83
936,879.67
-
-
404,550.82
532,328.85
229 SARNICO-BG-PIAZZA UMBERTO I, 1
O
1,734,688.03
1,600,442.38
265,926.35
3,069,204.06 -
1,370.15 -
1,171,944.30
1,895,889.61
230 SARONNO-VA-VIA PIETRO MICCA, 10
O
3,080,462.42
1,991,266.58
628,253.71
7,314,724.29
-
-
3,600,399.87
3,714,324.42
231 SARONNO-VA-VICOLO DEL CALDO, 30
O
85,747.78
28,842.22
-
19,484.48
134,074.48
-
-
55,451.69
78,622.79
232 SCANZOROSCIATE-BG-VIA ROMA, 27
O
797,137.29
448,290.73
-
254,181.55
1,499,609.57 -
19,069.20 -
508,586.35
971,954.02
233 SCHILPAR IO-BG-VIA TORRI, 8
O
138,116.82
208,828.19
-
46,931.33
393,876.34
286,448.18
107,428.16
110,053.06
1,614,741.58
310*
-
980,816.62 -
-
-
UBI Banca - Notes to the Financial Statements
(contd.)
Ubic a zio ne
P ro p./
Le a s ing
Inv e s t m e nt s
R e v a lua t io ns by
la w
234 SERIA TE-B G-VIA LE ITA LIA , 24
O
1,177,828.79
821,983.40
235 SESTO CA LENDE-VA -V. XX SETTEM B RE,35/37
O
748,816.95
270,516.58
236 SOLA RO-M I-VIA M A ZZINI, 66
O
54,878.25
-
R e v a lua t io ns
by m e rge rs
R e v a lua t io ns
o n F .T .A .
420,566.91
-
G ro s s a m o unt s
O t he r c ha nge s
A c c um . D e pr.
C a rrying
a m o unt s
267,309.26
2,267,121.45
-
-
962,833.52
108,172.50
1,548,072.94
-
-
904,882.41
643,190.53
712,670.75
767,549.00
-
-
244,052.54
523,496.46
-
-
871,247.69
758,160.74
557.76 -
875,389.12
728,349.58
-
167,486.53
202,609.04
673.83 -
1,065,444.76
618,671.79
596,609.76
595,797.16
188,927.62
237 SOLB IA TE A RNO-VA -VIA A .A GNELLI, 7
O
683,021.85
528,794.06
227,093.53
190,498.99
1,629,408.43
238 SONCINO-CR-VIA IV NOVEM B RE, 25
O
736,252.57
588,843.73
33,053.24
246,146.92
1,604,296.46 -
239 SOVERE-B G-VIA B A RONI, 5
O
71,367.17
249,196.76
-
49,531.64
240 SP IRA NO-B G-VIA DA NTE A LIGHIERI
O
755,239.07
716,704.44
-
212,846.87
1,684,790.38 -
241 STEZZA NO-B G-VIA B ERGA M O, 1
O
24,087.68
1,008,464.25
-
159,854.99
1,192,406.92
-
-
242 SUISIO-B G-VIA CA RA B ELLO P OM A , 31
O
406,362.37
102,674.03
303,688.34
-
-
114,760.72
243 TA LEGGIO-B G-VIA ROM A , 63
O
112,461.72
64,696.88
-
33,085.92
210,244.52
-
-
130,222.59
80,021.93
244 TA VERNOLA B ERGA M A SCA -B G-VIA ROM A , 12
O
157,047.45
253,070.33
-
70,647.08
480,764.86
-
-
238,037.61
242,727.25
-
-
245 TELGA TE-B G-VIA M ORENGHI, 17/A NG. VIA A RICI
O
4,364.00
-
246 TORINO-TO-P .ZZA GRA N M A DRE DI DIO, 12/A
O
1,178,105.85
-
247 TORINO-TO-P IA ZZA A DRIA NO, 5
O
754,099.91
248 TORINO-TO-VIA SA NTA TERESA , 9
O
18,100.00
249 TORINO-TO-VIA VITTORIO A LFIERI, 17
O
3,633,729.18
357,556.91
2,588,920.46
250 TORREVECCHIA P IA -P V-VIA M OLINO, 9
O
100,297.94
89,849.31
251 TRA DA TE-VA -VIA XXV A P RILE, 1
O
2,192,198.25
762,038.01
-
-
370,095.57
-
1,304,287.93
637,617.50
641,981.50
-
-
274,805.68
367,175.82
167,214.92 -
33,252.54
1,312,068.23
-
-
358,246.07
953,822.16
497,391.39 -
8,031.06
1,601,017.15
-
-
931,691.98
669,325.17
18,100.00
-
-
312.71
17,787.29
6,399,611.82
-
-
1,704,876.80
4,694,735.02
-
-
1,131,012.86 797,883.38
954,050.68
61,796.04
251,943.29
-
-
109,490.78
142,452.51
283,164.96
4,035,284.60
-
-
1,744,776.67
2,290,507.93
252 TRA VEDONA -M ONA TE-VA -VIA ROM A , 1
O
507,774.94
356,284.64
-
117,739.77
253 TRESCORE B A LNEA RIO-B G-VIA LOCA TELLI, 45
O
1,407,196.75
467,598.45
-
95,299.34
1,970,094.54
-
254 TREVIGLIO-B G-VIA LE FILA GNO, 11
O
1,469,373.83
2,522,977.97
-
466,849.13
4,459,200.93
255 TREZZA NO ROSA -M I-VIA RA FFA ELLO SA NZIO, 13/S
O
256,033.85
-
76,426.67
332,460.52
256 TREZZO SULL' A DDA -M I-VIA A .SA LA , 11
O
934,031.88
874,765.54
-
261,005.50
257 UB OLDO-VA -VIA R.SA NZIO, 46
O
700,119.32
536,698.70
258 URGNA NO-B G-VIA M A TTEOTTI, 157
O
22,637.86
372,725.77
259 VA RA NO B ORGHI-VA -VIA V.VENETO, 6
O
853,088.44
91,169.61
372,728.08
97,095.41
1,414,081.54 -
260 VA RESE-VA -P .ZZA IV NOVEM B RE, 1
O
672,607.28
178,911.63
512,895.22
86,340.01
1,450,754.14
-
66,779.14
-
-
357,797.60
493,417.75
-
1,020,064.02
950,030.52
-
-
1,896,686.85
2,562,514.08
-
-
147,589.46
184,871.06
2,069,802.92
-
-
945,293.19
1,124,509.73
19,028.67
1,322,625.83
-
-
795,292.85
527,332.98
85,864.76
481,228.39
-
-
146,199.01
335,029.38
169,070.71 -
537,059.19
707,951.64
-
709,244.49
741,509.65
5,641,569.00
6,483,073.10
2,683,802.46
981,799.35 -
130,584.00 -
-
261 VA RESE-VA -P IA ZZA B A TTISTERO, 2
O
3,240,677.41
6,202,412.32
12,126,892.19 -
2,250.09 -
262 VA RESE-VA -VIA SA N M ICHELE, 6A
O
170,613.65
29,531.55
31,849.23
6,314.07
238,308.50
-
263 VA RESE-VA -VIA V.VENETO, 2
O
10,548,887.36
9,982,212.99
7,526,419.21
657,192.43
28,714,711.99
264 VA RESE-VA -VIA VIRGILIO, 27
O
243,494.88
27,727.21
288,933.92
44,529.15
265 VA RESE-VA -VIA LE B ORRI, 155
O
613,259.07
13,123.48
513,063.75
57,651.89
1,197,098.19 -
370,764.64
87,417.85
604,685.16
-
119,300.85
119,007.65
26,972.25 -
11,780,379.94
16,961,304.30
-
253,094.64
351,590.52
3,337.83 -
-
485,032.08
708,728.28
764,840.40
-
-
677,772.33
87,068.07
368,000.00
30,840.02 -
121,733.75
277,106.27
266 VENEGONO INFERIORE-VA -VIA M A UCERI, 16
O
197,216.47
109,441.44
267 VENEZIA -VE-VIA CA P P UCCINA , 181
O
17,306.75
350,693.25
-
268 VERDELLO-B G-VIA CA STELLO, 31
O
918,201.39
238,867.12
-
37,285.63
1,194,354.14
-
-
479,338.34
715,015.80
269 VERONA -VR-VIA CITTA ' DI NIM ES, 4/8
O
1,732,852.18
-
205,281.93
1,938,134.11
-
-
509,097.90
1,429,036.21
270 VERTOVA -B G-VIA S.ROCCO, 37
O
309,206.19
-
106,370.89
1,008,152.85
-
-
920,715.98
271 VESTONE-B S-VIA P ERLA SCA
O
0.02
272 VIGEVA NO-P V-VIA DA NTE, 39
O
546,572.16
3,767,489.65
-
1,301,707.94
5,615,769.75
-
-
3,121,962.05
2,493,807.70
273 VIGEVA NO-P V-VIA DE A M ICIS, 5
O
85,401.89
547,550.89
-
156,823.93
789,776.71
-
-
510,829.23
278,947.48
274 VIGEVA NO-P V-VIA M A DONNA DEGLI A NGELI, 2
O
17,991.11
417,889.31
-
27,743.58
463,624.00
-
-
240,323.99
223,300.01
275 VIGEVA NO-P V-VICOLO B A RB A VA RA , 5/7
O
1,127.43
108,977.93
-
47,002.63
157,107.99
-
-
130,879.74
26,228.25
276 VIGGIU-VA -VIA CA STA GNA , 1
O
190,312.69
102,838.76
64,093.53
674,724.18
-
-
600,140.82
74,583.36
277 VILLA D A DDA -B G-VIA FOSSA , 8
O
347,286.88
113,881.51
70,314.67
531,483.06
-
-
261,002.51
270,480.55
592,575.77
-
-
-
-
-
317,479.20
-
87,436.87
207,750.01
O
590,531.45
1,584.54 -
155,685.88
370,855.02
O
733,939.16
443,868.55
-
173,443.41
1,351,251.12
-
-
552,055.35
799,195.77
280 VILM INORE DI SCA LVE-B G-VIA P A P A GIOVA NNI XXIII, 2
O
13,236.10
237,793.28
-
43,752.95
294,782.33
-
-
258,916.24
35,866.09
281 VIM ERCA TE-M I-VIA B . CREM A GNA NI, 20/A
O
1,593,586.57
746,313.12
-
233,728.54
2,573,628.23
-
-
1,365,009.89
1,208,618.34
282 VIM ERCA TE-M I-VIA GA RIB A LDI, 12
O
383,936.62
-
-
2,102.49
-
240,837.61
283 VIM ERCA TE-M I-VIA TORRI B IA NCHE, 3
O
518,431.86
-
-
37,604.00
284 VITERB O-VT-P .ZZA M A RTIRI D'UNGHERIA
O
12,116,947.46
-
-
285 VITERB O-VT-VIA B USSI, 19-21
O
22,915.22
181,605.46
-
286 ZOGNO-B G-VIA M .D.LIB ERTA ', 1
O
528,743.90
1,288,500.95
-
4 5 7 ,5 2 3 ,6 9 0 .7 2
4 3 6 ,5 9 9 ,5 6 1.16
-
528,125.44 -
-
279 VILLONGO-B G-VIA B ELLINI, 20
311*
62,406.01
207,749.99
278 VILLA P OM A -M N-P IA ZZA M A ZZA LI, 7
5 0 ,17 8 ,7 4 4 .8 5
-
0.02
386,039.11
-
145,201.50
122.36 -
185,882.01
370,031.49
12,116,947.46
207,894.43 -
6,684,922.09
5,639,919.80
204,520.68
29,783.35 -
137,885.27
96,418.76
-
995,849.61
1,040,643.09
556,035.86 -
219,247.85
2,036,492.70
8 6 ,12 6 ,5 8 8 .8 8
1,0 3 0 ,4 2 8 ,5 8 5 .6 1
8 ,3 12 ,2 8 8 .7 5
-
- 4 3 0 ,7 4 1,4 2 5 .0 0
6 0 7 ,9 9 9 ,4 4 9 .3 6
UBI Banca - Notes to the Financial Statements
Convertible bonds
(Amounts in euro)
31.12.2014
NOMINAL
AMOUNTS
CHANGES
CARRYING
AMOUNTS
NO MINAL AMOUNTS
31.12.2015
CARRYING
AMOUNTS
NOMINAL
AMOUNTS
CARRYING
AMOUNTS
CODE NUMBER
DESCRIPTION
CURRENCY
IT0003331888
ALITALIA 7,5 10 CV
EUR
IT0003873467
SNIA SPA 3% 05/10 CV
EUR
8
IT0004447014
COGEMESET 14 SC CV
EUR
2,534,999
253,500
-
-153,368
2,534,999
100,132
IT0004689623
BIOCELL 0,5% 11/14
EUR
1,250,000
1,259,726
-
-6,460
1,250,000
1,253,266
IT0005001273
GABETTI PS 23 TVP CV
EUR
68,463
35,994
IT0005095200
SORGENIA 24 OC CV-A
EUR
-
-
IT0005004186
IPO CHALLEN. 0,50 15
EUR
TOTAL
32
-
-
-
-
-
-68,463
-35,994
24,065,376
17,575,745
400,000
401,991
-400,000
-401,991
4,253,502
1,951,211
23,596,913
16,977,932
312*
32
8
24,065,376
27,850,415
-
17,575,745
18,929,143
UBI Banca - Notes to the Financial Statements
Disclosures concerning the fees of the independent auditors and services
other than auditing in compliance with Art. 149 duodecies of Consob Issuers’
Regulations
In accordance with Art. 149 duodieces of Consob Issuers’ Regulations, information concerning
payments made to the independent auditors Deloitte & Touche Spa and companies belonging to
the same network for the following services is given in the table below.
1)
Auditing services which include:

audit of the annual accounts for the purposes of expressing a professional opinion;

review of the interim accounts.
2)
Certification services which include appointments where the auditor assesses a specific
element, the determination of which is performed by another who is responsible for it, by
employing appropriate criteria in order to furnish a conclusion which gives the recipient a
measure of the reliability of that specific element.
3)
Tax consultancy services.
4)
Other services.
The fees presented in the table relating to the financial year 2015, are those contractually
agreed, inclusive of any indexing (but not of out-of-pocket expenses, nor of supervisory authority
contributions and VAT).
Type of service
Firm providing the service
Audit of the accounts
Deloitte & Touche Spa
Certification services
Deloitte & Touche Spa
Recipient of
the service
UBI Banca
Spa
UBI Banca
Spa
Fees
1,118
881
Tax consultancy services
Other services:
Methodological support with the
Recovery & Resolution Plan Directive
Assessment of the customer
satisfaction survey process
Other services
566
Deloitte Consulting Srl,
Deloitte Financial Advisory
Srl
Deloitte Consulting Srl
Deloitte ERS Srl
Total
UBI Banca
Spa
UBI Banca
Spa
UBI Banca
Spa
500
61
5
2,565
313*
UBI Banca - Notes to the Financial Statements

La Finale del Concorso “Sviluppa la tua idea imprenditoriale”

UBI FINANCE CB 2 COVERED BOND - INVESTOR

TLS Tax NewsAlert (4 febbraio 2015)

Brochure Prodotto

Scarica la Brochure pdf

Corriere della Sera 08 Aprile

PROGRAMME - UBI Banca

circolare tornei UBI Milano Marittima 2014

Banca Carime, fuga dal Sud

LA RETE DISTRIBUTIVA IN ITALIA LA PRESENZA