The UBI Banca Group
Consolidated Results as at 31st March 2014
14th May 2014
This document has been prepared by Unione di Banche Italiane Scpa ("UBI") for informational purposes only and for use in the presentation of
May 2014. 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 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
3
Executive summary: strong balance sheet ratio confirmed
BASEL 3 CAPITAL RATIOS
phased-in MARCH ‘14 CET 1 (fully loaded)
LCR & NSFR LOAN TO DEPOSIT RATIO
> 1 >1 >1 >1
Dec '13 Mar '14
> 10% 11.2% ~10.5%
Dec '13 Mar '14 pro-forma
Mar '14 at regime
LCR and NSFR > 1 also net of LTRO
95.5% 95.9%
Dec '13 Mar '14
Note: According to Basel 3 definition of Leverage Ratio, the tier one capital must be equal to at least 3% of on- and off-balance-sheet
assets. As at 31st December 2013, UBI Banca’s Leverage Ratio was equal to 5.16%, well above the minimum financial leverage ratio
of 3%. Next calculation will be released with the presentation of 1H results
< 100%
CAPITAL
INDICATORS
LIQUIDITY
POSITION
12.2%
17.7%
CET 1 TOTAL CAPITAL RATIO
Retained profit for the period not included
AFTER REDEMPTION OF
~ €340 MLN
PREFERENCE SHARES
CET 1 pro-forma: fully
loading the new regulatory
framework without phase-in,
to March ‘14 data
CET 1 at regime: fully
applying the new regulatory
framework, without phase-in,
and including a prudential
approach to credit and
market parameters, and the
estimates of the Aviva
transaction. No optimisation
actions are included
Ratios do not include profits
261 332
1Q13 1Q14
NET OPERATING INCOME
413
+27.0%
800 853
1Q13 1Q14
4
Executive summary: improving profitability and cost control confirmed
OPERATING INCOME
4Q13
951
+6.7% NET RESULTS FROM FINANCE
OPERATING EXPENSE
(€ mln)
538 521
1Q13 1Q14 4Q13
538
-3.2%
NET INTEREST INCOME
42
417
1Q13
63
454
1Q14 % change
4Q13
NET PROFIT
PRE-TAX PROFIT
26
93
1Q13
58
125
1Q14 % change
+34.5%
+119.7%
Notwithstanding
+25.9% in LLPs
NET PROFIT net of non-recurring items 19 59 +209.4%
+8.9%
+49%
OTHER ADMINISTRATIVE EXPENSES
STAFF COSTS
162
331
1Q13
153
326
1Q14 % change
-1.6%
-5.6%
D&A 45 43 -6.1%
in bln € 31 Mar '13 31 Dec '13 31 Mar '14% Qo Q
changes
45.4 44.0 43.5 -1.2%
of which: Private Customers 21.1 21.3 21.3 0.1%
Small business 14.9 14.3 14.1 -1.3%
UBI Banca (former Banca 24/7) 6.6 6.0 5.7 -4.7%
Prestitalia 2.8 2.4 2.3 -4.1%
29.6 28.0 27.9 -0.3%
of which: Core corporate 15.1 14.5 14.5 0.0%
Large corporate 8.4 8.2 8.2 0.6%
UBI Banca (former Centrobanca) 6.1 5.3 5.2 -2.4%
0.8 0.8 0.8 -0.4%
16.5 15.6 14.9 -4.5%
of which: UBI Leasing 8.0 7.4 7.3 -1.6%
UBI Factor 2.1 2.3 2.0 -11.1%
UBI Banca 1.5 1.4 1.0 -27.5%
92.3 88.4 87.1 -1.5%
Retail
Corporate
Private
Other
Total
1 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
2 Minor companies, IAS adjustments, loans not segmented to commercial portfolios and intercompany eliminations
3 UBI net of intercompany; 4 Including NPLs, management accounts; 5 Net of mortgages granted to Group employees
Lending volumes trends vs. 4Q13 show: 1) stabilisation of core business stocks (private customers, small business, corporates) thanks to improvement
in new origination inflows of medium/long term lending in Network Banks
2) decrease in product companies stocks (due to low new origination) and further reduction of stocks in run-off
Small business: turnover up to €15 mln
Core Corporate: turnover from €15 to €250 mln
Large Corporate: turnover > €250 mln
FOCUS ON MEDIUM / LONG TERM LENDING
New origination
Reimbursement
mainly thanks to growth in new mortgage
(m/l term loans) granted to:
↗ private customers (+42.8% YoY)
↗ corporate sector (+27.2% YoY)
↗ small business (+22.3% YoY)
New origination
Reimbursement =
STOCK
(~63.6 bln€)
NETWORK
BANKS:
~ 44.4 bln€
PRODUCT
COMPANIES
~ 12.4 bln€
STOCK IN
RUN-OFF
~6.8 bln€
43
FOCUS ON TOTAL LENDING
46% in 1Q14
(vs 38% in FY13)
5
= 82% 85% 82%
90%
96%
1Q13 2Q13 3Q13 4Q13 1Q14
Portfolio in run off (€ 6.8 bln at end 1Q14 vs € 6.9 at end
2013, mainly former Banca 24/7 and Leasing)
1
2
3
4
5
Net of volatile CCG repos, Direct Funding grows by 2.7% vs Dec. ‘13, driven by
bond issuances both to ordinary customers of the Network Banks and to
institutional investors
Loan to Deposit ratio: 95.9%
6
* Bonds placed on third party banks networks
100%
~80%
~20%
Slight Reduction in current accounts (-0.2 bln/€)
more than compensated by securities in issue
evolution (+0.8 bln/€)
In Jan/Feb ‘14, issuances of:
€ 1 bln Covered Bond
€ 1 bln Emtn
Full redemption of preferred shares (announced on
27th December 2013) completed in March 2014 will
have positive impact on 2Q14 NII
DIRECT FUNDING...(IAS amounts in € bln)
31 Mar '13 31 Dec '13 31 Mar '14quarterly
% changes
… FROM ORDINARY CUSTOMERS 80.4 74.7 74.9 0.3%
Current accounts & deposits (other than CCG) 45.2 42.6 42.4 -0.4%
Term deposits, other payables and repos 4.7 2.6 2.5 -2.4%
Securities in issue:
Network banks + UBI 24.4 24.1 24.9 3.4%
Extra-captive customers* 3.9 3.7 3.5 -4.0%
Other (mainly customer CDs) 2.2 1.7 1.5 -9.9%
...FROM INSTITUTIONAL CUSTOMERS 18.3 17.9 15.9 -11.3%
Securities in issue:
Covered Bonds 6.3 7.7 8.7 13.1%
EMTN 5.9 4.2 5.1 23.8%
CD and ECP 0.9 0.2 0.7 173.3%
Preferred shares 0.3 0.3 0.0 n.s.
Repos with CCG 4.9 5.5 1.4 -74.4%
TOTAL DIRECT FUNDING 98.7 92.6 90.8 -1.9%
TOTAL DIRECT FUNDING
(excl. repos with CCG)93.8 87.1 89.4 2.7%
Term deposits trend also supports further
improvement in mark down (+113 bps YoY and +54
bps 1Q14/4Q13)
3.00
1.56 2.02
2Q14 3Q14 4Q14
7
Securities in issue: retail bonds placed to ordinary customers show significant
decrease in spreads and fully sustainable replacement of maturities
(Nominal amounts in € bln,
net of bond repurchases)
6.58
99
110
125
150
Apr 14
1Q14
FY13
FY12
Spreads vs. 6M Euribor on new
issuances have progressively tightened
without affecting the replacement rate
(€2.7 billion issuances vs €1.9 billion
maturities)
1Q14
1.91
7.30
7.75
6.54
2015 2016 2017 and following Matured
Spread in bps vs. 6M Euribor
MATURITY
PROFILE OF
RETAIL BONDS
PRICING OF
NEW ISSUES
> 100%
replacement
rate
8 * Inclusive of € 0.5 bln of private placement with BEI expiring within 2022. Further € 1.7 bln retained issue not included
Institutional securities: sustainable maturities and favourable market performance
0.97
0.10
0.80 0.16
1.00
0.55 1.80
1.05
0.05
1.05
2015 2016 2017 2018 2019
Matured
0.87 0.69 0.48
0.03
0.03
2Q14 3Q14 4Q14
0.04
(Nominal amounts in € bln)
2020 and following
EMTN COVERED BONDS*
2.04 0.06 Maturity
profile
3.61
0.03
1Q14
Spreads
YoY change%
In February 2014 issued:
• € 1 bln of EMTN
(maturity Feb 2019, fixed rate 2.875%)
Latest
issuances
In January 2014 issued:
• € 1 bln of Covered Bond
(maturity Feb 2024, fixed rate 3.125%)
100
200
300
bps
Years3 5 10
UBI Senior spreadsJan . 2013 vs. May 2014
bps
Years
100
200
300
3 5 10
UBI Covered Bond spreadsJan. 2013 vs. May 2014
Jan 2013
May 2014
300
200
100
bps
300
200
100
bps
3 5 10 years 3 5 10 years
Jan 2013
May 2014
9
11,946 14,061 14,578
4,391 2,590
3,435 3,185 3,087
3,113
31 Mar 2013 31 Dec 2013 31 Mar 2014
Italian Govies proprietary portfolio at around € 21 billion, strongly contributing to
total eligible assets
Eligible Assets: € 33.2 bln (net of haircut)
Modified Duration
of Italian Govies
portfolio: 1.8 years
3.2 1.9
1.4
3.4 6.2 4.8
0.2
Over 2017-2018 2015-2016 2014
AFS
HFT
HTM
TOTAL 19,521 19,738 21,126
Maturity Profile (market values, € bln)
AFS
HFT
HTM
Italian Govies
Gov. Guaranteed bonds
Retained covered bonds ***
Retained securitisations
Other (ABACO)
~ 65%
~ 8%
~ 10%
~ 12%
~ 5%
% Eligible assets breakdown
High-quality
available assets
guarantee
immediate access
to liquidity
AFS Reserve on Italian Govies: +80 mln/€ as at 7th May 2014
(vs. +14 mln/€ as at 31st March 2014 and -237 mln/€ as at 31 Dec ‘13)
* € 6 bln of LTRO were taken in December 2011, further € 6 bln in February 2012
** Including among others interest expense accrued
*** € 1.5 bln on the €10 bln Retail Mortgages CB Programme, € 1.9 bln on the € 5 bln Commercial Mortgages CB Programme (net of haircut)
Data as at 5th May 2014
Unencumbered
Pledged for LTROs**
CCG Repos
19.6 bln/€
12.3 bln/€
Use of eligible assets*
1.3 bln/€
~46% of short
term deposits
Italian Govies: ~ 91% of Financial Assets
(€ mln)
10
Stated Net Profit: € 58 mln in 1Q14 vs € 26 mln in 1Q13
PPA allocated line by line
MAIN INCOME STATEMENT ITEMS
Figures in € mln1Q14 1Q13
% change
1Q14 vs 1Q134Q13
% change
1Q14 vs 4Q13
Net interest income 454 417 8.9% 459 (1.1%)
Net commission income 300 305 (1.5%) 299 0.4%
Net result from finance 63 42 49.0% 156 (59.9%)
Other income items 36 36 1.3% 37 (1.0%)
Operating income 853 800 6.7% 951 (10.3%)
Staff costs (326) (331) (1.6%) (327) (0.4%)
Other administrative expenses (153) (162) (5.6%) (166) (8.0%)
Net impairment losses on property, equipment and investment property
and intangible assets(43) (45) (6.1%) (45) (5.8%)
Operating expenses (521) (538) (3.2%) (538) (3.2%)
Net operating income 332 261 27.0% 413 (19.5%)
Net impairment losses on loans (199) (158) 25.9% (366) (45.8%)
Net impairment losses on other financial assets and liabilities 2 (8) n.s. (25) n.s.
Net provisions for risks and charges (10) (2) 332.1% 2 n.s.
Profits (losses) from disposal of equity investments (1) (1) 26.0% (8) (91.2%)
Pre-tax profit from continuing operations 125 93 34.5% 15 n.s.
Taxes on income for the period from continuing operations (59) (57) 3.8% 205 n.s.
Profits for the period attributable to non-controlling interests (8) (10) (19.4%) (8) 1.2%
Profit/loss for the period attributable to the shareholders of the Parent
before charges for exit incentives and impairments on tangible and
intangible assets
58 26 119.7% 213 (72.7%)
Impairment on tangible and intangible assets
(net of tax and non-controlling interests)(38) n.s.
Charges for exit incentives
(net of tax and non-controlling interests)(26) n.s.
Profit for the period 58 26 119.7% 149 (61.0%)
Profit for the period NET OF NON-RECURRING ITEMS 59 19 209.4% 26 127.5%
19
59
+37
-5
+34 +0
+17
-41 -6
+1 +2
1Q13 normalised*
net profit
NII net commissions
net results from finance
other income items
operating expenses
net LLPs other impairments
taxes non-controlling interests
1Q14 normalised*
net profit
Net of non-recurring items, net profit amounts to € 59 mln vs € 19 mln in 1Q13
Differential contribution shows recurring structural improvements
both on the revenue and on the cost side
(€ mln)
* Normalised net profit = net profit excluding non-recurring items
+209%
11
strong potential
linked to LLPs
improvement
in bps on avg. STOCK * 1Q13 4Q13 1Q14
1M Euribor 12 16 23
UBI Group - Customer spread 159 174 179
Mark up vs 1M Euribor 284 280 277
Short term 386 372 358
Medium-long term 253 252 253
Mark down vs 1M Euribor -125 -106 -98
Sight deposits -34 -17 -8
Term deposits -304 -245 -191
Retail bonds -151 -149 -147
Institutional bonds -174 -186 -179
Network Banks cust. spread** 175 194 194
417 428
446 459 454
1Q13 2Q13 3Q13 4Q13 1Q14
12
(€ mln)
Net Interest Income at € 454 mln: +8.9% vs. 1Q13 and +1.1% vs. 4Q13 on a
comparable basis (calendar impact). Progressive improvement in customer
spread
+8.9%
* Average period data referred to the whole consolidated Group (Network banks+ Product companies + UBI), unless otherwise stated
** Network Bank customer spread includes subordinated debt
Avg. markup vs. 1M Euribor
on Network Banks:
377 bps m/l term new 1Q14
origination loans vs. 236
bps m/l term avg. stock
-2 days
represent
-10 mln€
BUSINESS WITH CUSTOMERS
337 343
361 364 361
1Q13 2Q13 3Q13 4Q13 1Q14
Net of cost of funding
(€ mln)
92.3
Loans to
customers
(bln€) 91.3 89.8 88.4 87.1
CUSTOMER SPREAD NET INTEREST INCOME
-2 days
represent
-8 mln€
On a yearly basis, strong increase in
NII from customer business +7.1%
notwithstanding a decrease in lending of
5.6%
13 * Includes FX negotiations and excludes performance fees
Net Commission Income: -1.5% YoY and +0.4%QoQ.
Good performance for securities related fees (+6.0% YoY and +7.8% QoQ)
Banking related commissions mainly affected by sluggish economy
In early March obtained
authorisation to reimburse € 3 bln
bonds with state guaranty that had a
gross yearly cost of approx. 23 mln€
4Q13 included performance fees for
€ 14.2 mln
Net Commission Income (€ mln) 1Q13 4Q13 1Q14% 1Q14 vs
1Q13
% 1Q14 vs
4Q13
Guarantees (on State guaranty bonds) (11.5) (11.7) (10.1) -11.9% -13.8%
BANKING RELATED COMMISSIONS 165.7 162.7 150.6 -9.1% -7.4%
of which:
Guarantees (bank ing activity) 14.8 10.8 14.4 -2.5% 34.0%
Collection and payment services 26.2 29.1 25.4 -2.8% -12.7%
Services for factoring transactions 6.5 5.3 5.2 -19.9% -1.6%
Current accounts management 48.1 54.4 47.6 -1.2% -12.6%
Other services 70.1 63.1 58.0 -17.3% -8.0%
MANAGEMENT, TRADING & ADVISORY SERVICES* 150.6 148.0 159.6 6.0% 7.8%
of which:
Portfolio management 56.6 78.1 59.6 5.3% -23.7%
Placement of securities 48.1 21.7 47.1 -2.1% 117.5%
Third party services distribution 36.9 39.1 43.1 16.9% 10.1%
TOTAL 304.8 299.0 300.1 -1.5% 0.4%
14
* PPA effect amounted to € 5.1 mln in 1Q13 and to € 4.9 mln in 1Q14
** One off related costs already sustained in 4Q13 (€ 29 mln net of tax)
Discipline in cost containment persists: -3.2% YoY (and QoQ) after 5 consecutive
years of progressive reduction in total operating costs
ON GOING STRUCTURAL DROP
Drop in all cost components both YoY
and QoQ
Within June ‘14, 183 further exits:
annual cost savings estimated at
approx. € 15 mln gross at regime in
2015**
0.1%
-5.0%
-1.7% -0.7%
-6.2% -5.5%
FY08/FY07 FY09/FY08 FY10/FY09 FY11/FY10 FY12/FY11 FY13/FY12
Total normalised Operating Costs Evolution (YoY, in %)
331 326
162 153
45 43
1Q13 1Q14
538
-5.6%
-6.1%
-3.2%
-1.6% Staff costs
Other Adm. Expenses
D&A (incl. PPA*)
Total oper. costs
(€ mln)
538 538 521
4Q13
538 538
327
45
166
-3.2%
15
Annualised cost of credit at 91 bps (vs. 68 bps of 1Q13) but...
∆ = +41
(€ mln)
TOTAL NET IMPAIRMENT LOSSES ON LOANS
NET
ANALYTICAL
IMPAIRMENTS*
158 199
1Q13 1Q14
NET
COLLECTIVE
IMPAIRMENTS
156
2
212
-13
1Q13 1Q14 Of which, in € mln
* Analytical writebacks of € 118 mln in 1Q14 vs. € 75 mln in 1Q13; writebacks net of time reversal: € 80.7 mln in 1Q14 and € 51 mln in 1Q13
** Perimeter: Network Banks + UBI Banca (essentially former Banca 24/7 activities)
Higher LLPs linked to a still weak macroeconomic scenario but the
evolution of deteriorated loans shows first mild signs of improvement
(see next slide)
Coverage of performing loans is up to 59 bps from 55 bps in 1Q13
Low risk positions / Total positions High risk positions / Total positions
67.2%
68.4%
Dec '13 Mar '14
6.4% 6.2%
Dec '13 Mar '14
+121 bps -26 bps
Collective writebacks due to a decline of net lending volumes and the
recomposition of the loan book toward lower risk exposures**
16
10,958 11,457 11,840 12,367 12,674 12,659
Dec '12 Mar'13 June '13 Sept '13 Dec '13 Mar '14
...first signs of stabilisation in gross deteriorated loans stocks amount and
encouraging evidences also in terms of flows
Gross deteriorated loans stocks (€/mln)
Outflows from deteriorated loans (€/mln)
811
1,069
623
1Q12 1Q13 1Q14
Inflows from performing loans (€/mln)
Significant slowdown in deteriorated loans inflows from performing loans (-41.7% 1Q14 vs. 1Q13)
Steady outflows of deteriorated loans to performing loans (+2.3% 1Q14 vs. 1Q13) and good problematic credit recollection
(loans cashed-in up by 23% 1Q14 vs. 1Q13)
Increase in stock write-offs (+45.2%): almost completely NPLs with an impact on their coverage (see next slide)
5,885 6,015
5,083 5,077
872 886
834 680
Dec '13 Mar '14
Past due
Restructured
Impaired
NPLs
COMPOSITION
-41.7%
Outflows to
performing loans
196 191 235
1Q12 1Q13 1Q14
59 95
138
1Q12 1Q13 1Q14
212
348 356
1Q12 1Q13 1Q14
Loans cashed-in Write-offs
OTHER KEY ELEMENTS TO ASSESS
THE GROUP LOAN PORTFOLIONPLs
% of collateralised (real estate)
stocks
Retail 57.0%
Corporate 52.7%
71.88%including write-offs
63.25%
Loan to Value
Coverage of non-collateralised
positions25.25%
Impaired loans
Coverage 31 Mar '13 31 Dec '13 31 Mar '14
Total deteriorated loans 25.66% 26.52% 27.26%
..including write-offs 36.11% 36.26% 37.23%
NPLs (sofferenze) 42.30% 41.60% 41.02%
..including write-offs 57.42% 56.05% 55.80%
Impaired loans (incagli) 12.72% 15.12% 16.22%
Restructured loans 13.76% 13.94% 14.16%
Past due loans 3.17% 2.83% 4.95%
Performing loans 0.55% 0.61% 0.59%
Mar ‘14 vs. Dec ‘13: coverage of total deteriorated loans up by 74 bps to 27.26% (+97 bps including write-offs to 37.23%)
4.5% 4.3% 4.0%
5.9%
4.0% 3.5%
2.8%
5.0% 4.1% 4.1% 3.8%
3.2% 3.2%
2.1%
UBI BANCA
Bank E Bank D Bank C Bank A Bank F Bank B
FY13 and FY12: RECOVERY RATE on NPLS
FY13 FY12
Relevant increase in past due loans coverage (+212 bps) close
to a new reference level for credit policies
Source: 2013 and 2012 Annual Reports, Table A.1.7 of the Notes to the Accounts;
Recovery Rate = loans cashed-in / (initial gross exposure of NPLs + NPLs annual increases)
Peers: Unicredit, Intesa, MPS, Banco Popolare, BPM, BPER
*
**
* Over 60% of total loan portfolio is assisted by collateral; 75.9% adding up personal
guarantees
** LTV of performing loans stock is 45.2% for Retail and 41.6% for Corporate
17
18
Outlook
Under current market conditions net interest income is expected to continue to
improve and it should also continue to benefit in terms of expense from easing
pressure on the cost of funding and in terms of income from the progressive
replacement of medium to long-term loans, made in the past at lower spreads
than those practiced at present
Resilient performance by fee and commission income is expected to continue
A further decrease in sovereign debt risk could allow positive results to be
achieved for trading and hedging activity again in the remaining part of the year
The downward trend for administrative expenses will continue, while the
performance of staff costs will depend on the final outcome of the renewal of the
national trade union contract
The slowdown in the pace of new defaults on loans recorded in the first quarter of
the current year allows expectations of an improvement compared to 2013 in
loan losses to be confirmed
Governance:
latest resolutions from the Shareholders’ General Meeting of May 2014
19
20
The updating of the Articles of Association...
Lists for the election of members of the Supervisory Board may be submitted by the following:
- at least 500 registered shareholders who represent at least 0.5% of the share capital;
- the outgoing Supervisory Board with a proposal supported by at least 500 registered shareholders representing
at least 0.5% of the share capital;
- collective investment undertakings (UCITS) that hold a total of at least 1% of the share capital and that
have the right to participate and vote in the Shareholders’ Meeting called to elect the Supervisory Board;
In the selection of the two majority and minority lists for the election of the Supervisory Board, maintenance of
the per capita voting principle accompanied by a premium mechanism for the appointment of Board Members,
which takes account of the total capital held by the registered shareholders who have voted for each list if it
exceeds 10% of the share capital.
A reduction in the number of members of the Supervisory Board from 23 to 17, with effect from the next
renewal of the Board and a reduction in the maximum number of members of the Management Board from 11
to 9, with the presence of senior managers of the Bank on that Board (this is already the situation for the
Management Board currently in office )
An increase in the requirements of professionalism for members of governing bodies with respect to those set
by the legislation and regulations in force and also the introduction of age limits for appointment to those
positions. As concerns the Supervisory Board, the majority of the members must be in possession of the
requirements of independence set forth in the Corporate Governance Code recommended by Borsa Italiana,
and a limit to the maximum number of terms of office is set for the senior appointments to that Board
the introduction of a videoconference in shareholders’ meetings and an increase in the number of proxies to
five for each registered shareholder, to promote participation to the General Meeting.
Quorum required to approve the amendments: 3,746 votes representing at least 20% of the total share capital Amendments approved by 6,870 votes in favour (98.4% of votes cast) representing 26.436% of the total share capital
MAIN AMENDMENTS
21
Annexes
Reclassified balance sheet: highlights
22
Annex 1
* Including €12 bln LTRO
Financial assets (AFS, HFT, FV, HTM) 22,568 21,841 23,238 3.0% 6.4%
Loans to customers 92,265 88,421 87,095 -5.6% -1.5%
Property, equipment and investment property 1,940 1,798 1,781 -8.2% -1.0%
Intangible assets 2,956 2,919 2,903 -1.8% -0.5%
of which: goodwill 2,537 2,512 2,512 -1.0% 0.0%
Tax assets 2,626 2,833 2,824 7.6% -0.3%
Other assets 1,089 931 773 -29.0% -17.0%
Total assets 130,396 124,242 123,983 -4.9% -0.2%
Net interbank position* 9,581 10,888 11,389 18.9% 4.6%
Due to customers 54,817 50,702 46,367 -15.4% -8.6%
Securities issued 43,862 41,902 44,478 1.4% 6.1%
Tax liabilities 748 756 908 21.4% 20.1%
Net worth attributable to the Parent 9,692 10,089 10,609 9.5% 5.2%
Non-controlling interests 830 842 816 -1.7% -3.1%
Profit for the period 26 251 58 119.7% -76.8%
Total liabilities and equity 130,396 124,242 123,983 -4.9% -0.2%
MAIN ASSETS ITEMSFigures in millions of euro
% annual
change
% quarterly
change31.03.201431.03.2013 31.12.2013
MAIN LIABILITIES AND EQUITY ITEMSFigures in millions of euro
% quarterly
change31.03.201431.03.2013 31.12.2013
% annual
change
23
Annex 2
Capital Ratios (Phased in, Basel III) as at 31 March 2014: Common Equity Tier 1
Ratio at 12.23%, Total Own Funds Ratio (TCR) at 17.72%
Capital ratios do not include retained profit
for the period
TCR ratio at 17.72% notwithstanding
recent reimbursement of Tier 1 securities
Figures in millions of euro31 Mar 14
Basel III
Common Equity Tier 1 Capital (before filters and transitional provisions) 7,842
Transitional provisions (minority interest) 383.3
Transitional provisions (AFS Reserve) -130.6
Common Equity Tier 1 Capital filters -5.2
Italian Govies filters 5.5
Common Equity Tier 1 (after filters and transitional provisions) 8,094.7
Common Equity Tier 1 regulatory adjustments -572.2
of which: negative elements for deduction excess of expected losses over
impairment losses -535.2
Common Equity Tier 1 7,522.5
Tier 2 capital before transitional provisions 3,688.0
Tier 2 instruments grandfathering 31.8
Tier 2 capital after transitional provisions 3,719.9
Tier 2 capital regulatory adjustments -346.0
of which: negative elements for deduction excess of expected losses over
impairment losses -356.8
Tier 2 capital 3,373.9
Total Own Funds 10,896.4
Credit risk 4,457.7
Market risk 103.5
Operational risk 359.1
Total prudential requirements 4,920.3
Risk weighted assets 61,504.1
Common Equity Tier 1 Capital Ratio 12.23%
Tier I (Common Equity Tier 1 + Additional Tier 1) Ratio 12.23%
Total Own Funds Ratio (TCR) 17.72%
24
Securities Portfolio Details*
Annex 3
* 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 84% of
floating rate securities as at 31st March 2014
Composition of the portfolio 31.03.2013 31.12.2013 31.03.2014
Government bonds 92.7% 93.2% 94.4%
Corporate bonds (mainly bank issues) 6.2% 4.6% 4.7%
Hedge funds 0.6% 0.6% 0.6%
Funds and shares 0.5% 1.6% 0.4%
Floating rate** 22.2% 20.4% 20.0%
Fixed rate 72.9% 74.5% 76.1%
Structured securities 3.7% 3.0% 2.9%
Shares, funds, convertible bonds 1.1% 2.2% 0.9%
Securities in euro 99.6% 99.7% 99.7%
Securites of the euro area 98.4% 99.6% 99.6%
USA securities 1.1% 0.0% 0.0%
Investment grade 98.4% 99.1% 99.0%
Average rating Baa1 Baa2 Baa2
BY TYPE OF
FINANCIAL
INSTRUMENT
BY FINANCIAL
PROFILE
BY CURRENCY
BY GEOGRAPHICAL
DISTRIBUTION
BY RATINGS (BONDS)
Asset Quality details
25
* As a percentage of total loans
Annex 4
LOANS TO CUSTOMERS - AS AT 31 DECEMBER 2013
GROSS EXPOSURE IMPAIRMENT
LOSSES € mln
NPLs (Sofferenze) 6.38% 2,448
IMPAIRED LOANS (Incagli) 5.51% 769
RESTRUCTURED LOANS 0.95% 122
PAST DUE 0.90% 24
TOTAL DETERIORATED LOANS 13.74% 3,362
€ mln %*
CARRYING AMOUNT
3.89% 3,437 41.60%
4.88% 4,314 15.12%
0.85% 751 13.94%
0.91% 811 2.83%
10.53% 9,312 26.52%
COVERAGE
RATIO %
TOTAL PERFORMING LOANS 86.26% 482 89.47% 79,109 0.61%
TOTAL LOANS TO CUSTOMERS 100% 3,843 100% 88,421 4.17%
5,885
5,083
872
834
12,674
79,591
92,265
€ mln %*
LOANS TO CUSTOMERS - AS AT 31 MARCH 2014
GROSS EXPOSURE IMPAIRMENT
LOSSES € mln
NPLs (Sofferenze) 6.61% 2,468
IMPAIRED LOANS (Incagli) 5.58% 824
RESTRUCTURED LOANS 0.97% 125
PAST DUE 0.75% 34
TOTAL DETERIORATED LOANS 13.91% 3,450
€ mln %*
CARRYING AMOUNT
4.07% 3,548 41.02%
4.88% 4,254 16.22%
0.87% 760 14.16%
0.75% 647 4.95%
10.57% 9,208 27.26%
COVERAGE
RATIO %
TOTAL PERFORMING LOANS 86.09% 462 89.43% 77,887 0.59%
TOTAL LOANS TO CUSTOMERS 100% 3,912 100% 87,095 4.30%
6,015
5,077
886
680
12,659
78,348
91,007
€ mln %*
Annex 5
Indirect Funding Evolution
26
Mix of AuM: breakdown by fund type in UBI Pramerica
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. € 4.6 bln managed by Prudential
31 Dec 2013 31 March 2014
Balanced; 17%
Equity; 13%
Flexible; 4%
Cash; 10% Bond; 56%
in bln€ Mar 13 Dec 13 Mar 14 Mar 14 vs Dec 13
AUM (excl bancassurance) 26.9 27.8 27.9 0.3%
Bancassurance 11.4 11.7 11.9 1.3%
AUC 30.6 32.1 33.6 4.7%
Total Indirect Funding 68.9 71.7 73.4 2.4%
Balanced, 21%
Equity, 13%
Flexible, 5%
Cash, 9% Bond, 52%