28
The UBI Banca Group Consolidated Results as at 30 th June 2013 27 August 2013
The UBI Banca Group
Consolidated Results as at 30th June 2013
27 August 2013
This document has been prepared by Unione di Banche Italiane Scpa ("UBI") for informational purposes only and for use in the presentation of
August 2013. It is not permitted to publish, transmit or otherwise reproduce this document, in whole or in part, in any format, to any third party
without the express written consent of UBI and it is not permitted to alter, manipulate, obscure or take out of context any information set out in
the document.
The information, opinions, estimates and forecasts contained herein have not been independently verified and are subject to change without
notice. They have been obtained from, or are based upon, sources we believe to be reliable but UBI makes no representation (either
expressed or implied) or warranty on their completeness, timeliness or accuracy. Nothing contained in this document or expressed during the
presentation constitutes financial, legal, tax or other advice, nor should any investment or any other decision be solely based on this
document.
This document does not constitute a solicitation, offer, invitation or recommendation to purchase, subscribe or sell for any investment
instruments, to effect any transaction, or to conclude any legal act of any kind whatsoever.
This document contains statements that are forward-looking: such statements are based upon the current beliefs and expectations of UBI and
are subject to significant risks and uncertainties. These risks and uncertainties, many of which are outside the control of UBI, could cause the
results of UBI to differ materially from those set forth in such forward looking statements.
Under no circumstances will UBI or its affiliates, representatives, directors, officers and employees have any liability whatsoever (in negligence
or otherwise) for any loss or damage howsoever arising from any use of this document or its contents or otherwise arising in connection with
the document or the above mentioned presentation.
For further information about the UBI Group, please refer to publicly available information, including Annual, Quarterly and Interim Reports.
By receiving this document you agree to be bound by the foregoing limitations.
Please be informed that some of the managers of UBI involved in the drawing up and in the presentation of data contained in this document
either participated in a stock option plan and were therefore assigned stock of the company or possess stock of the bank otherwise acquired.
The disclosure relating to shareholdings of top management is available in the half year and the annual reports.
Methodology
The “notes on the reclassified financial statements” contained in the periodic financial reports of the Group may be consulted for a fuller
comprehension of the rules followed in preparing the reclassified financial statements.
Disclaimer
2
.
1 Estimates based on 30/06/2013 data, Common Equity Ratio fully loaded; 2 On the basis of Basel 3 requirements, the maximum financial leverage ratio is set
at 3%, in order to contain total banking debt and as a consequence, the tier one capital must be equal to at least 3% of on- and off-balance-sheet assets;
3 EBA CT1 calculated taking into account the AFS reserve valuation respectively as at Sept’11 (exercise reference data, -€868 million);
4 Tangible assets/(tangible equity + non controlling interests + net result for the period)
At the roots of improving profitability, a strong Basel 3 compliant Balance Sheet UBI Banca presents one of the best combinations in terms of Basel 3 data: CET1 ratio > 10% - still
with a ratio of RWA/Total assets at 49%, Leverage ratio of 4.9%, compliance with liquidity ratios
3
P&L: POSITIVE RESULTS
Net Interest Income: +2.6% QoQ
Tot. Operating Income: +6.6% QoQ
Tot. Operating Costs: -0.9% QoQ
Net Operating Income: +22% QoQ
Annualised Cost of Credit confirms usual
seasonality: 99 bps in 2Q13 vs. 68 bps in 1Q13
(85 bps in 2Q12, 54 bps in 1Q12)
2Q13 Net Profit: € 26 mln (+0.1% vs 1Q13)
1H13 Net Profit: € 53 mln (-66.8% vs 1H12)
SOUND LIQUIDITY PROFILE
L/D RATIO: 94.7%
ELIGIBLE ASSETS: € 27.9 bln (as at 20 August 2013)
FINANCIAL LEVERAGE4: 16.1X
SOLID CAPITAL POSITION
NET of potential dividend
CORE TIER 1 ratio (CT1): 12.1%
EBA CT1 (Sept ’11)3: 10.8%
TOTAL CAPITAL RATIO: 18.7%
Tot RWA / Tot ASSETS: 48.9%
BASEL 3 COMPLIANCE
CET 1 ratio1: >10%
LEVERAGE2: 4.9%
NSFR > 1
LCR > 1
Data as at 30 June 2013,
unless otherwise stated
CET1 calculated not including
any optimisation action
24.6
17.7
Dec '07 Dec '12
Cost of all Group Companies Directors
and Statutory Auditors (€ mln)
4
On-going Group restructuring:
Further Actions under way:
General Meetings to reduce the
number of Board Directors in existing
entities as from next mandate
Reorganisation of Parent/Group companies management structure and distribution model
Sale / merger / downsizing of companies, of which the latest:
merger of Banca 24/7 into UBI Banca (23rd July 2012)
creation of a North Western pole through the merger of Banco di San Giorgio into Banca Regionale Europea (22nd October 2012)
UBI Insurance Broker disposal (21st December 2012)
SILF merged into UBI Banca (21st December 2012)
merger of Centrobanca into UBI Banca (6th May 2013)
sale of Banque de Dépôts et de Gestion (19th August 2013, to be finalised within year end)
DISTRIBUTION WORKFORCE GOVERNANCE
Number of employees Number of Branches in Italy
-12.4%
1,970
1,726
April '07 June '13
21,700
18,485
April '07 June '13
-15%
(headcounts)
and approx.
-17%* (costs)
* Change calculated comparing 1H07 (considering twice the 1Q07 pro-forma data, i.e. the quarter not affected by any optimisation actions on workforce) to 1H13
** Source: Annual reports 2012 and 2008 (for 2007 data) – Table “Composition of Personnel Costs” included in the chapter “Income Statement”, item “Directors
and Statutory Auditors “
-28%**
in bln € 30 June '12 31 Dec '12 31 Mar '13 30 June '13% Yo Y
changes
% Qo Q
changes
47.0 46.2 45.4 44.8 -4.7% -1.3%
of which: Private Customers 21.4 21.3 21.1 21.2 -1.0% 0.5%
Small business 15.7 15.3 14.9 14.6 -6.8% -2.0%
UBI Banca (former Banca 24/7 + Prestitalia)* 10.0 9.6 9.4 9.1 -9.1% -3.2%
30.7 29.5 29.5 29.6 -3.7% 0.3%
of which: Core corporate 15.7 15.3 15.0 15.0 -4.6% 0.0%
Large corporate 8.2 7.9 8.4 8.8 7.4% 4.8%
UBI Banca (former Centrobanca) 6.8 6.3 6.1 5.8 -14.6% -4.9%
0.8 0.8 0.8 0.8 2.5% 1.9%
16.8 16.4 16.6 16.0 -4.5% -3.7%
of which: UBI Leasing 8.5 8.1 8.0 7.8 -8.6% -2.5%
UBI Factor 2.2 2.4 2.1 2.3 4.3% 9.5%
UBI*** 1.9 1.7 1.5 1.3 -32.2% -13.3%
95.3 92.9 92.3 91.3 -4.3% -1.1%
Retail
Corporate
Private
Other**
Total
5
* Following the merger of Banca 24/7 in UBI Banca, effective July 2012, UBI Banca is managing the remaining stock of non captive
mortgages and personal and special purpose loans. Prestitalia is managing the “salary backed loan” operations
** Minor companies, IAS adjustments, loans not segmented to commercial portfolios and intercompany eliminations
*** UBI net of intercompany
Lending volumes still weak due to environment but...
RUN-OFF
See
next
slide
6
… positive signs come from new flows of lending in July 2013, also thanks to
good results from recent campaigns where new ideas count
TV flights from 2nd to 15th June
At end-July, disbursed 202 loans.
Total new flows of Other Loans (including the campaign
results) disbursed in July 2013: +33% vs. monthly avg. of
previous 6 months
Mortgage loans for young couples
TV flights from 10th to 25th May
Total new flows of Mortgages (including the campaign
results) disbursed in July 2013: +41% vs. monthly avg. of
previous 6 months
Loans to start up a business
TOTAL NEW FLOWS OF LOANS DISBURSED IN JULY 2013: +37% VS. MONTHLY AVG. OF PREV. 6 MONTHS
A mortgage specially
designed for steady young
couples, even if they don’t
have a steady job
Loans of up to €50,000 for
those who want to
become self-employed or
start a business
30 June '12 31 Dec '12 31 Mar '13 30 June '13% quarterly
changes
% annual
changes
TOTAL DIRECT FUNDING 102.2 98.8 98.7 96.3 -2.4% -5.8%
A low Loan/Deposit ratio (94.7%) has allowed the optimisation of funding from
ordinary customers through the downsizing of higher cost current accounts and
deposits impacting on NII
7
IAS amounts in €/bln
* Bonds placed on third party banks networks
100%
~ 80%
~20%
FROM ORDINARY CUSTOMERS 80.4 80.3 80.4 77.9 -3.1% -3.1%
FROM INSTITUTIONAL CUSTOMERS 21.9 18.5 18.3 18.5 1.0% -15.7%
Securities in issue:
Covered Bonds 6.3 6.3 6.3 6.3
EMTN 7.1 7.1 5.9 5.8
CD and ECP 1.0 0.8 0.9 0.6
Preferred shares 0.3 0.3 0.3 0.3
Repos with CCG 7.2 3.9 4.9 5.4
Current accounts & deposits (other than CCG) 44.0 44.7 45.2 43.0 -4.8% -2.2%
CCG (run-off due to new regulation) 1.4 0.4 0.0 0.0
Term deposits, other payables and repos 4.5 4.7 4.7 4.4 -5.4% -1.7%
Securities in issue:
Network banks + UBI 24.1 24.5 24.4 24.4 0.0% 1.2%
Mainly customer CDs 2.1 2.1 2.2 2.2
Extra-captive customers 4.3 3.9 3.9 3.8
Current accounts and deposits
are down QoQ due to:
-€1 bln net switch to AUM
(mainly UBI Pramerica Sicav
subscriptions), -€1.2 bln euro of
higher cost more volatile
institutional funding
Term deposits alone are down
QoQ by € 0.4 bln with an
improvement in mark down of
approx. 20 bps
Total replacement of bonds
placed with ordinary customers
guarantees stability of stocks
(approx. € 24 bln)
No public institutional issues in
2013, many requests for private
placements
*
8
Institutional and Retail Maturities
EMTN and
Covered Bonds
Retail
Bonds
Maturities by year (€ bln) (nominal amounts netted of bond repurchase)
Maturities by year (€ bln) (nominal amounts, excluding preference
shares for € 0.3 bln)
2.12 2.28
0.97
0.10 0.05 0.05 0.03
0.18 0.03 0.05
0.55 1.80
1.05
0.05
1.05
0.05
1.05
0.01
2H13 2014 2015 2016 2017 2018 2019 2020 2021 2022
EMTN Lower Tier II (at the first call date) Covered Bonds
2.76 5.65
3.56 2.12
1.01
2.60
1.88 4.46
2H13 2014 2015 2016-2040
Network banks UBI Banca
Maturities 2013 (€ bln) 1H 3Q 4Q
EMTN 1.42 0.64 1.48
LT2 (first call date) 0.18
Covered Bonds 0.03
Include soft mandatory
convertible bond (€ 639 mln,
with an yearly coupon of
5.75%) redeemed in July 2013
Maturities 2013 (€ bln) 1H 3Q 4Q
UBI Banca 0.17 0.72 0.29
Network banks 2.35 1.40 1.36
Total 2.52 2.12 1.65
In € mln, IAS values
Debt instruments 20,188 21,411 20,713
of which: Italian Govies 17,966 19,521 19,545
Equity instruments* 390 331 345
Units in O.I.C.R.** 217 218 220
Others*** 588 607 484
Total 21,383 22,568 21,763
Financial assets: total portfolio
31 Dec 12 31 Mar 13 30 June 13
(868)
(589) (624) (485)
(304)
30 Sept 11 31 Dec 12 31 Mar 13 30 June 13 23 Aug 13
3.1
2.7
1.6
4.6
0.2
2.8
1.6
3.2
Over
2018-2021
2016-2017
2014-2015
Up to 1 year
Italian Govies proprietary portfolio stable QoQ at around € 19.5 billion
* Progressive sale of the stake in Intesa Sanpaolo: in 1H13, 33.4 mln of shares sold. At the end of June’13, UBI Group held 0.52% of
Intesa Sanpaolo ordinary share capital (unchanged compared to Mar’13, reference book value for P&L impairments: € 1.118 per share)
** Collective investment units *** Others: financial derivatives and financing 9
AFS Reserve evolution on Italian Govies
(€ mln)
Reference for EBA
capital exercise as
at 8th Dec 2011
Italian Govies portfolio breakdown: 30 June 2013
HFT (Held for trading)
HTM (Held to maturity)
AFS (Available for sale)
€ 19.5 bln, IAS values
21%
16% 63%
62% (or €12.4 bln) of
Italian sovereign bond
portfolio
will expire within
2015, matching the
LTRO (€ 12 bln)
Maturity Profile (market values, € bln)
Duration of Italian Govies
portfolio: 1.4 years
MAIN INCOME STATEMENT ITEMS
Figures in € mln1H12 1H13 % change 2Q12 1Q13 2Q13 % YoY % QoQ
Net interest income 980 845 (13.7%) 486 417 428 (11.9%) 2.6%
Net commission income 586 602 2.8% 287 305 297 3.8% (2.4%)
Net result from finance 105 109 3.8% 11 42 67 n.s. 60.3%
Other income items 124 95 (23.0%) 76 36 59 (22.2%) 66.1%
Operating income 1,795 1,652 (7.9%) 861 800 852 (1.0%) 6.6%
Staff costs (689) (646) (6.2%) (328) (331) (315) (3.9%) (5.0%)
Other administrative expenses (352) (335) (4.8%) (176) (162) (174) (1.7%) 7.3%
Net impairment losses on property, equipment and
investment property and intangible assets(96) (90) (5.6%) (47) (45) (45) (4.1%) (0.4%)
Operating expenses (1,137) (1,072) (5.7%) (551) (538) (534) (3.2%) (0.9%)
Net operating income 658 580 (11.8%) 310 261 319 3.0% 22.0%
Net impairment losses on loans (334) (384) 14.8% (203) (158) (226) 11.3% 43.4%
Net impairment losses on other assets and liabilities (50) (17) (65.3%) (48) (8) (9) (81.2%) 7.8%
Net provisions for risks and charges (21) (12) (44.4%) (17) (2) (9) (44.7%) n.s.
Profits from disposal of equity investments 0 1 n.s. 0 (1) 2 n.s n.s.
Pre-tax profit from continuing operations 253 169 (33.3%) 42 93 76 80.9% (17.8%)
Taxes on income for the period from continuing operations (76) (103) 35.2% 20 (57) (47) n.s. (17.8%)
Profit for the period attributable to non-controlling interests (14) (13) (12.3%) (7) (10) (3) (56.2%) (67.2%)
Profit for the period attributable to the shareholders of the
Parent before charges for exit incentives impairments on
goodwill and intangible assets
162 53 (67.4%) 55 26 26 (51.6%) 0.1%
Charges for exit incentives
(net of tax and non-controlling interests)(3) 0 n.s. (0) - - n.s. n.s.
Profit for the period 160 53 (66.8%) 54 26 26 (51.1%) 0.1%
Profit for the period NET OF NON-RECURRING ITEMS 121 52 (56.7%) 25 19 33 30.3% 73.8%
10
2Q13 Stated Profit of € 26 mln; € 33 mln normalised (+30% YoY and +74% QoQ).
In the first half 2013: € 53 mln; € 52 mln normalised (-57% YoY)
Note: Net interest income and other income items have been restated to include in the latter all credit-related fees, according to
new Bank of Italy regulations
In 2Q13 non-recurring items
relate mainly to impairment
losses on financial assets
2Q12 4Q12 1Q13 2Q13
Customer Spread 1.70% 1.50% 1.60% 1.61%
1M Euribor 0.40% 0.11% 0.12% 0.12%
Mark Up 2.90% 2.80% 2.85% 2.81%
Mark Down -1.20% -1.30% -1.25% -1.20%
Net Interest Income: +2.6% vs. 1Q13.
Positive 2013 QoQ trend is confirmed, notwithstanding lending evolution and
low market rates
Average Period Data
Although slowly, NII is
expected to increase
over the next quarters
95.3 92.9 92.3 91.3
June '12 Dec '12 Mar '13 June '13
(€ bln)
Lending Evolution
-1.1%
Euribor and Customer spread evolution
486
417 417
428
2Q12 4Q12 1Q13 2Q13
(€ mln)
Net Interest Income Evolution
+2.6%
11
Lower funding costs QoQ
586 602
1H12 1H13
Net Commission Income
€ mln1H12 1H13 % YoY
Guarantees (on State guaranty bonds) (19.3) (23.1) 19.7%
BANKING RELATED COMMISSIONS 332.7 324.7 -2.4%
of which:
Guarantees (bank ing activity) 25.6 25.3 -1.3%
Collection and payment services 54.7 53.4 -2.4%
Services for factoring transactions 13.2 12.4 -6.3%
Current accounts management 104.0 98.9 -4.9%
Other services 135.2 134.8 -0.3%
MANAGEMENT, TRADING & ADVISORY
SERVICES*272.6 300.6 10.3%
of which:
Portfolio management 113.0 115.4 2.1%
Placement of securities 72.6 91.9 26.6%
Third party services distribution 67.4 75.3 11.7%
TOTAL 586.1 602.2 2.8%
299 287
305 297
+3.8%
Net Commission Income. Positive Semester: +2.8% YoY; +1% in 1H13 vs. 2H12
Quarterly Evolution: -2.4% vs. 1Q13 but +3.8% vs. 2Q12
12
Banking related commissions reflect the contraction in lending activities
Good trend in “Management, trading and advisory services fees” also supported by successful placement of
UBI Pramerica Sicav products (€ 1.6 bln in 1H13)
* Includes FX negotiations
+2.8%
(€ mln)
1Q12 1Q13 2Q12 2Q13
-2.4%
1Q12 2Q12 1Q13 2Q13% 2Q13
vs.
2Q12
% 2Q13
vs.
1Q13
(7.7) (11.6) (11.5) (11.6) 0.0% 0.9%
164.0 168.7 165.7 159.0 -5.7% -4.0%
13.8 11.8 14.8 10.4 -11.1% -29.6%
25.9 28.8 26.2 27.3 -5.3% 4.2%
7.3 5.9 6.5 5.9 -0.5% -9.0%
50.9 53.1 48.1 50.8 -4.5% 5.4%
66.1 69.1 70.1 64.7 -6.5% -7.8%
143.1 129.6 150.6 150.0 15.8% -0.4%
57.6 55.4 56.6 58.8 6.1% 3.9%
38.6 34.0 48.1 43.8 28.7% -9.1%
34.0 33.4 36.9 38.4 15.1% 4.2%
299.4 286.7 304.8 297.5 3.8% -2.4%
In 2Q13 lower other services fees vs.1Q13
mainly due to absence of non-recurring
structured finance fees (€ 4.6 mln)
In 2Q13, vs. 1Q13, lower fees on
placement of securities and higher
contribution from portfolio management
689 646
352 335
96 90
1H12 1H13
13
Discipline in cost containment persists: 1H13 is the 5th consecutive semester of
progressive reduction in total operating costs (-5.7% YoY and -0.9% QoQ)
* PPA effect amounted to € 10.1 mln in 1H12 (€ 5 in 1Q12 and € 5.1 in 2Q12) and to € 10.2 mln in 1H13 (€ 5.1 mln in 1Q13 and 2Q13)
1,137 1,072
534
538
551
2Q13
1Q13
2Q12
Total operating costs
315
331
328
2Q13
1Q13
2Q12
Staff costs
174
162
176
2Q13
1Q13
2Q12
Other Adm. Exp.
45
45
47
2Q13
1Q13
2Q12
D&A (including PPA*)
In 2Q13: higher costs also
related to institutional
advertising campaigns
Structural drop confirmed Benefits from headcount
reduction mainly following
November 2012/February
2013 trade union agreements
Staff costs
Other Administrative
Expenses
D&A (including PPA*)
Total operating costs
of which
-5.7%
-6.2%
-4.8%
-5.6%
YoY
YoY
YoY
YoY
567 343 175
FY12 avg.
48
FY12 avg.
FY12 avg.
FY12 avg.
14
First mild improvements in deteriorated loans trend and inflows at a slower pace
of growth… but it is still too early to change the cautious stance on credit quality
855
1,157 1,237
818 1,145
740
811 1,020
1,158 1,317
1,069 967
1Q12 2Q12 3Q12 4Q12 1Q13 2Q13
Inflows from performing loans (€/mln)
Gross deteriorated loans amount (€/mln)
8,589 9,107 9,454 10,343 10,958 11,457 11,840
Dec '11 Mar '12 June '12 Sept '12 Dec '12 Mar '13 June '13
+3.8%
+9.4% +6.0%
+4.5% +3.3%
+25.8% +13.5% +13.7%
-18.9% -9.5% 9
10 9
1H12 2H12 1H13
Past due
Impaired
(“Incagli”)
Non Performing
(“Sofferenze”)
Restructured
INFLOWS FROM PERF. LOANS
BREAKDOWN BY TYPE (€/mln)
- Gross deteriorated loans stock shows a
progressive slowdown in growth: quarterly CAGR
1H12 at 4.9%, vs. quarterly CAGR 1H13 at 3.9%.
Latest quarters show a tempered growth run rate
- As at 30 June 2013, NPLs (“Sofferenze”) represent
approx 47% of deteriorated loans portfolio (vs.
50% in June 2012)
Outflows to perfor-
ming loans amount
to € 326 mln in
1H13 (+49% HoH
and +103% YoY)
149 163 50
+6.0%
5,142 5,280 5,580
4,124 4,584 4,648
774 688 691 919 904 921
31 Dec '12 31 Mar '13 30 June '13
2,952 3,047 3,249
3,603 4,001 3,994
659 593 591 892 875 891
31 Dec '12 31 Mar '13 30 June '13
Credit Quality: evolution of deteriorated loans by category
11,457 8,517
Impaired (incagli)
Restructured
Past Due
(€ mln)
total
deteriorated 10,958
8,105
GROSS AMOUNTS
(€ mln)
NET AMOUNTS
15
2Q13 Main Events
• NPLS include the
formal reclassification
from impaired, effected
in 2Q13, of one large
position (153 million
euro). This position
has no coverage as the
debtors are public
entities (ASL) and full
recovery is expected
8,725 11,840
NPLs (sofferenze)
Credit Quality: improvement in total deteriorated loans coverage
16
Coverage of NPLs not assisted by real estate collateral and including loans amortised-sent to losses
stands at 72.7% (75.6% excluding large uncovered position)
Coverage of impaired loans not assisted by real estate collateral stands at 22%
See annexes 6 and 7 for details
26.7% pro-forma excluding large
uncovered position mentioned in
previous slide
43% pro-forma excluding large
uncovered position mentioned in
previous slide
30 Jun '12 31 Dec '12 30 Jun '13
Total deteriorated loans 25.74% 26.04%* 26.31%
NPLs (sofferenze) 41.54% 42.60% 41.78%
Impaired loans (incagli) 10.85% 12.63%* 14.07%
Restructured loans 12.09% 14.84% 14.45%
Past due loans 3.71% 2.94% 3.23%
Performing loans 0.57% 0.55% 0.56%
* Excluding the uncovered position, classified as impaired loan as at Dec’12, total deteriorated loans coverage would stand at 26.4%
as at the end of Dec ‘12 and impaired loans coverage, at the same date, would stand at 13.1%
334.4
512.9
383.9
1H12 2H12 1H13
17
Annualised Cost of Credit at 84 bps vs. 70 bps in 1H2012
Total customer loans (bln€)
Cost of credit
(bps annualised)
(€ mln)
95.3 92.9
70 110*
91.3
84
* Including Bank of Italy inspection ** Source: 2012 Financial Reports , Notes to the Accounts, Part E ,Table A.1.7. Recovery Rate on NPLs = Payments
Received/ ( Initial Gross Exposure + Increases). Peers = Unicredit, Intesa, MPS, Banco Popolare, BPM, BPER. In 2012, just a single bank had a recovery rate
higher than UBI’s *** Writebacks net of time reversal: €75 mln in 1Q12, €42 mln in 2Q12, €51 mln in 1Q13 and €49 mln in 2Q13
Impairment Losses on Loans
Of which, Breakdown of Analytical Impairment (€ mln)
FY12
UBI Peers
Avg.
4.5%
3.9%
Recovery Rate on NPLs**
-215
-282
-202
-414
-230
-281
93
56
40
40
75
69
1Q12
2Q12
3Q12
4Q12
1Q13
2Q13
Write downs Write backs ***
18
Outlook
The evolution of the Italian economic context in the second half of 2013 remains uncertain.
Currently, according to estimates by leading economic research centres, a slight improvement is
expected.
As concerns the UBI Group, a further slight improvement is expected in net interest income in
coming quarters under current market conditions, thanks, amongst other things, to a balanced
financial structure which allows the Group to carefully manage the more expensive and less stable
components of funding, and notwithstanding the low level of market interest rates and a weak trend
for volumes of lending, which will continue to condition net interest income again in the second half
of 2013.
A further contribution could come from re-pricing of the rollover of medium to long-term loans.
The reduction objectives for operating expenses, resulting from action (the trade union agreement in
particular) commenced at the end of 2012, are confirmed.
Given the current context, as a result, amongst other things, of stronger management of problem
loans, loan loss provisions should stand in absolute terms below the 2012 level.
Annexes
19
Figures in millions of euro31 Dec 2012
Basel II AIRB
31 March 2013
Basel II AIRB
30 June 2013*
Basel II AIRB
Tier 1 (before filters) 8,124.2 8,139.4 8,160.4
Preference shares, minorities saving and priv. shares
net of grandfathering382.9 382.9 382.9
Tier 1 capital filters -30.5 -29.5 -25.0
Tier 1 (after filters) 8,476.6 8,492.7 8,518.3
Deductions from Tier 1 -212.9 -328.9 -578.0
of which: negative elements for 50% deduction excess of
expected losses over impairment losses -71.6 -104.5 -370.4
Tier 1 after filters and specific deductions 8,263.7 8,163.9 7,940.3
Supplementary capital after filters 4,310.5 4,245.3 4,270.8
Deductions from supplementary capital -212.9 -328.9 -578.0
of which: negative elements for 50% deduction excess of
expected losses over impairment losses -71.6 -104.5 -370.4
Supplementary capital after filters and specific deductions 4,097.7 3,916.5 3,692.8
Deductions from Tier 1 + supplementary capital -157.8 - -
Total supervisory capital 12,203.6 12,080.3 11,633.2
Credit risk prudential requirements 5,611.6 5,405.0 4,518.6
Market risk 78.3 84.6 63.5
Operational risk 437.3 437.3 421.0
Total prudential requirements 6,127.1 5,926.9 5,003.1
Tier III subordinated liabilities
Computable value 55.9 60.4 45.3
Risk weighted assets 76,589 74,086 62,539
Core Tier I after deductions from Core capital 10.29% 10.50% 12.08%
Tier I 10.79% 11.02% 12.70%
Total capital ratio 16.01% 16.39% 18.67%
20
Ratios as at 30 June 2013: Core Tier 1 at 12.08%, Tier 1 at 12.70% and Total
Capital Ratio at 18.67%
Annex 1
* AIRB models on network banks’ Corporate and Retail Credit Risk applied. As of Dec ’12 and March ‘13 AIRB models were
applied only in the calculation of Corporate Credit Risk.
Data as at 31st March 2013 reported on a basis comparable with December 2012 and June 2013.
Potential dividend included pro-rata
Increase following adoption of
AIRB model on Retail Credit Risk
Reclassified balance sheet: highlights
21
Annex 2
* Including €12 bln LTRO
Financial assets (AFS, HFT, FV, HTM) 21,363 21,383 22,568 21,763 1.9% -3.6%
Loans to customers 95,333 92,888 92,265 91,268 -4.3% -1.1%
Property, equipment and investment property 2,002 1,967 1,940 1,922 -4.0% -1.0%
Intangible assets 2,971 2,965 2,956 2,946 -0.8% -0.3%
of which: goodwill 2,539 2,537 2,537 2,537 -0.1% 0.0%
Tax assets 2,632 2,628 2,626 2,393 -9.1% -8.9%
Other assets 1,351 1,060 1,089 1,543 14.3% 41.7%
Total assets 133,609 132,434 130,396 127,930 -4.3% -1.9%
Net interbank position* 9,865 9,139 9,581 10,250 3.9% 7.0%
Due to customers 57,075 53,758 54,817 52,843 -7.4% -3.6%
Securities issued 45,172 45,059 43,862 43,501 -3.7% -0.8%
Tax liabilities 563 666 748 537 -4.6% -28.3%
Net worth attributable to the Parent 9,075 9,655 9,692 9,809 8.1% 1.2%
Non-controlling interests 870 839 830 832 -4.4% 0.3%
Profit for the period 160 83 26 53 -66.8% 100.1%
Total liabilities and equity 133,609 132,434 130,396 127,930 -4.3% -1.9%
% quarterly
changeMAIN LIABILITIES AND EQUITY ITEMSFigures in millions of euro
30.06.2012% annual
change31.12.2012 31.03.2013 30.06.2013
% quarterly
changeMAIN ASSETS ITEMSFigures in millions of euro
30.06.2012% annual
change31.12.2012 31.03.2013 30.06.2013
22
As at mid August 2013 total eligible assets amount to €27.9 bln
Total Eligible Assets Pool Evolution
net of haircut (bln €) Eligible Assets Pool Composition
52%
20%
10%
12% 6%
Italian Govies
Government Guaranteed Bonds
Retained Covered Bonds
Retained securitisation
Other
Exposure to
ECB: € 12 bln*
* € 6 bln of LTRO were taken in December 2011, further € 6 bln in February 2012
20/08/2013
27.9
15.7
bln €
Annex 3
Unencumbered assets represent 36.5% of Short Term Deposits
Asset Quality details
23
* As a percentage of total loans
LOANS TO CUSTOMERS - AS AT 30 JUNE 2013
GROSS EXPOSURE IMPAIRMENT
LOSSES € mln
NPLs (Sofferenze) 5.88% 2,331
IMPAIRED LOANS (Incagli) 4.90% 654
RESTRUCTURED LOANS 0.73% 100
PAST DUE 0.97% 30
TOTAL DETERIORATED LOANS 12.48% 3,115
€ mln %*
CARRYING AMOUNT
3.56% 3,249 41.78%
4.38% 3,994 14.07%
0.65% 591 14.45%
0.97% 891 3.23%
9.56% 8,725 26.31%
COVERAGE
RATIO %
TOTAL PERFORMING LOANS 87.52% 468 90.44% 82,544 0.56%
TOTAL LOANS TO CUSTOMERS 100% 3,583 100% 91,269 3.78%
5,580
4,648
691
921
11,840
83,012
94,852
€ mln %*
LOANS TO CUSTOMERS - AS AT 31 MARCH 2013
GROSS EXPOSURE IMPAIRMENT
LOSSES € mln
NPLs (Sofferenze) 5.52% 2,234
IMPAIRED LOANS (Incagli) 4.79% 583
RESTRUCTURED LOANS 0.72% 95
PAST DUE 0.95% 29
TOTAL DETERIORATED LOANS 11.98% 2,939
€ mln %*
CARRYING AMOUNT
3.30% 3,047 42.30%
4.34% 4,001 12.72%
0.64% 593 13.76%
0.95% 875 3.17%
9.23% 8,517 25.66%
COVERAGE
RATIO %
TOTAL PERFORMING LOANS 88.02% 459 90.77% 83,748 0.55%
TOTAL LOANS TO CUSTOMERS 100% 3,399 100% 92,265 3.55%
5,280
4,584
688
904
11,457
84,207
95,663
€ mln %*
Annex 4
24
* Note: retail mortgages referred to Network Banks and former Banca 24/7, corporate mortgages referred to Network Banks. Arithmetic
mean. For Italian Average, source: “Banca d’Italia, Supplemento al Bollettino Statistico, Sondaggio congiunturale sul mercato delle
abitazioni in Italia,” figures as at 1Q2013 (latest available data), Table 8.
Asset Quality: Loan to Value and Guarantees
Loan to Value
(Stock as at June ‘13)
Loan to Value of
retail mortgages (New Origination)
45.6% 43.6%
Retail Mortgages Corporate Mortgages
54.5% 56.1%
UBI Network Banks 1Q13
Italian Average 1Q13
Performing Loans
Deteriorated Loans
% Secured Performing Loans
(data as at 31/12/2012)
77.4% 65.0%
UBI IT Peers AVG
-1.6pp +12.4pp
Loan to Value
(Stock as at June ‘13)
58.4% 53.4%
Retail Mortgages Corporate Mortgages
% Secured Deteriorated Loans
(data as at 31/12/2012)
78.9% 75.4%
UBI IT Peers AVG
+3.5pp
Annex 5
*
As at June ’13 NPLs stated coverage decreases mainly following the
reclassification from impaired loans of a large uncovered position
(mentioned in slide 15)
25
Coverage of NPLs as the result of a high percentage of collateralised positions
and a low percentage of unsecured positions
Stated Coverage of NPLs
Stated Coverage including loans
amortised-sent to losses
* mainly real estate
** not assisted by collateral (i.e. unsecured or assisted by personal guarantees) and including loans amortised sent to losses
41.5% 42.6% 41.8%
June '12 Dec '12 June '13
57.3% 57.6% 56.2%
June '12 Dec '12 June '13
Collateralised positions June '12 Dec '12 June '13
% of gross NPLs 63.4% 63.6% 61.3%
Coverage 34.8% 35.6% 36.9%
Unsecured positions June '12 Dec '12 June '13
Coverage 76.7% 77.2% 72.7%
**
*
Annex 6
43% pro-forma excluding
large uncovered position
mentioned in slide 15
75.6% pro-forma
excluding large
uncovered position
mentioned in slide 15
63% pro-forma
excluding large
uncovered position
mentioned in slide 15
June '12 Dec '12 June '13
1,741 1,825 1,832
Amount of loans amortised - sent to
losses in relation to legal procedures
(€ mln)
• Increase in coverage due to the reclassification of a large
uncovered position (mentioned in slide 15) to NPL
• Evolution of impaired collateralised positions:
Performing loans:
• Network banks’ riskier positions (6.4% of performing loans) are
65% guaranteed
26
Coverage of Impaired and Performing Loans
10.9% 12.6% 14.1%
June '12 Dec '12 June '13
0.57% 0.55% 0.56%
June '12 Dec '12 June '13
Coverage of Performing loans
Stated Coverage of impaired loans
Collateralised positions June '12 Dec '12 June '13
% of gross impaired loans 64.4% 63.3% 66.1%
Annex 7
13.1% pro-forma excluding
large uncovered position
mentioned in slide 15
27
Securities Portfolio Details*
* Analysis refers to a portfolio which excludes participations, some smaller portfolios and derivatives
** Fixed rate securities with asset swaps are considered as floating rate securities; securities in asset swap represent 78%
of floating rate securities as at 30 June 2013
Annex 8
Composition of the portfolio 30.06.2012 31.12.2012 31.03.2013 30.06.2013
Government bonds 90.8% 91.1% 92.7% 92.9%
Corporate bonds (mainly bank issues) 8.0% 7.7% 6.2% 6.0%
Hedge funds 0.6% 0.6% 0.6% 0.6%
Funds and shares 0.6% 0.6% 0.5% 0.5%
Floating rate** 25.0% 26.0% 22.2% 21.1%
Fixed rate 70.4% 69.0% 72.9% 74.1%
Structured securities 3.4% 3.8% 3.7% 3.7%
Shares, funds, convertible bonds 1.2% 1.2% 1.1% 1.1%
Securities in euro 99.5% 99.5% 99.6% 99.6%
Securites of the euro area 98.1% 98.1% 98.4% 98.6%
USA securities 1.0% 1.1% 1.1% 1.0%
Investment grade 98.6% 98.0% 98.4% 98.4%
Average rating A3 Baa1 Baa1 Baa1
BY TYPE OF
FINANCIAL
INSTRUMENT
BY FINANCIAL
PROFILE
BY CURRENCY
BY GEOGRAPHICAL
DISTRIBUTION
BY RATINGS (BONDS)
Indirect Funding Evolution
28
Mix of AuM: breakdown by fund type in UBI Pramerica
Annex 9
Source: Assogestioni’s “PATRIMONIO GESTITO*” aggregate
* Customers assets managed to which assets received for management under a mandate from other managers are added and from which assets
entrusted under mandate to other managers are subtracted. With reference to UBI Pramerica, as from June ‘12 Assogestioni includes again in this
aggregate the amounts managed by third parties, i.e. approx. € 5 bln managed by Prudential
31 March 2013 (unchanged vs. 31 December 2012)
Equity13%
Balanced8%
Bond64%
Cash12%
Flexible3%
30 June 2013
Equity13%
Balanced11%
Bond62%
Cash11%
Flexible3%
In bln€ June '12 Dec'12 Mar '13 June '13 June '13 vs. Mar '13
25.0 26.8 26.9 27.3 1.5%
11.5 11.3 11.4 11.4 (0.1%)
32.5 32.1 30.6 30.2 (1.0%)
69.0 70.2 68.9 68.9 0.1% Total indirect funding
AUM (excl.bancassurance)
Bancassurance
AUC
