Capitulo 3 Desarrollo del videojuego
3.1 Planificación
3.1.2 Estimación temporal
Innovative equity instruments TIER TW O CAPITAL UNIONE DI BANCHE ITALIANE Ordinary subordinated bond issues (Lower Tier 2) TOTAL as at 31/12/2013
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Quantitative information
Use was made by the UBI Banca Group in the calculation of regulatory capital as at 31st December 201323 – in compliance with provisions issued by the Bank of Italy in May 2010 – of
the possibility of completely neutralising the impacts on regulatory capital of gains and losses recognised in the valuation reserves relating to government securities issued by EU member states held in the “available-for-sale financial assets” portfolio. This approach is in addition to that already contained in regulations, which requires losses to be deducted entirely from regulatory capital and gains to be only partially included. The option in question has been applied across the board by all members of the banking group since 30th June 2010.
Operations on capital
In view of the application of regulations under Basel 3, UBI Banca undertook a series of measures during the year to optimise capital instruments, which are summarised below.
***
Conversions and redemptions of the bond “UBI 2009/2013 convertibile con facoltà di rimborso in azioni”
Following the exercise of conversion rights held by subscribers of the bond “UBI 2009/2013 convertibile con facoltà di rimborso in azioni”, 16 bonds were presented for conversion in January 2013 with a nominal value of €12.75 each (total nominal value of €204) which gave rise on 5th February to the issue of 16 new shares with a nominal value of €2.5 each and dividend entitlement from 1st January 2012, with payment in cash of the 16 residual fractions24.
In June, 84 bonds (with a total nominal value of €1.071) were presented for conversion, which gave rise to the issue, on the 3rd July 2013, of 84 new shares with a nominal value of €2.5 each and dividend entitlement from 1st January 2013, with payment in cash of the 0.84 residual fractions.
A further 120 bonds (with a nominal value of €1.530 ) were presented for conversion in the period from 1st to 3rd July 2013 in relation to the provisions of article 5, paragraph 4 of the Bond Regulations – the possibility of exercising conversion rights within the five working days prior to maturity of the bond. This gave rise to the issue on the 10th July 2013 of 121 new shares and payment in cash of the 0.20 residual fractions.
23 With a provision of 18th May 2010 and a later communication of 23rd June 2010 (“Clarification of
supervisory measures concerning regulatory capital – prudential filters”), the Bank of Italy issued new instructions for the treatment of fair value reserves relating to debt instruments held in the “available- for-sale financial assets” portfolio for the purposes of calculating regulatory capital (prudential filters). More specifically, as an alternative to the “asymmetric approach” (full deduction of net losses from the tier one capital and partial inclusion of net gains in the tier two capital) already provided for by Italian regulations, it is now permitted – in compliance with 2004 CEBS guidelines –, limited to securities issued by the central governments of countries belonging to the European Union, to completely neutralise gains and losses in the reserves mentioned (“symmetrical approach”). The measure is designed to prevent unjustified volatility in regulatory capital, caused by sudden changes in the prices of securities that are not related to changes in the credit ratings of the issuers.
24The distribution of the 2011 dividend drawn from the extraordinary reserve involved a change in the
conversion ratio (originally set at one new share for each bond) to the new ratio of 1.01497 (rounded to 1.01) UBI Banca shares for each convertible bond with a nominal value of €12.75 presented for conversion.
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The bond “UBI 2009/2013 convertibile con facoltà di rimborso in azioni” matured on 10th July 2013. The 50,128,020 bonds still outstanding were redeemed in cash on the same date for a total of €639,132,255 (together with the last annual interest payment), in accordance with
decisions approved by the Management Board and by the Supervisory Board on 28th May and
30th May 2013 respectively, in view of the capital strength and good liquidity position of the Group.
*** Lower tier two subordinated bonds
On 9th September 2013, UBI Banca announced an invitation to the holders of the lower tier two subordinated bonds “€300,000,000 Callable Step-Up Floating Rate Subordinated Notes due 2018” (ISIN number XS0272418590) – issued on 30th October 2006 under the EMTN programme by the former BPU Banca and outstanding for a nominal amount of €181,650,00025 – to offer their bonds for sale to the issuer at an offer price of 93% of the nominal value. This operation, authorised by the Bank of Italy on 22nd August 2013, formed part of UBI Banca’s liability management in view of prevailing market conditions and regulatory developments. The issuer formalised its intention in the invitation not to exercise its right to redeem the bond earlier than scheduled (30th October 2013), after making a change to the issue conditions on that same 9th September designed to eliminate the subordination clause. As a consequence, the bonds not offered for sale at the end of the invitation period (17th September 2013) became unsecured senior bonds from the date of payment of the quarterly interest (the 30th October 2013) and no longer qualified for inclusion in the regulatory capital. As already reported on 18th September 2013, the total nominal value of the bonds validly offered for sale by bondholders was €70,350,000. On the settlement date of the operation (24th September 2013), the nominal value of the issue still outstanding had therefore fallen to €111,300,000. All the bonds repurchased, including those relating to previous operations, were cancelled.
On 19th December 2013 UBI Banca announced that it had passed a resolution to definitively and irrevocably waive its right to the early redemption of the outstanding subordinated securities entitled “€370,000,000 UBI subordinato Lower Tier II fix to float con rimborso anticipato 13.03.2009-2019” (ISIN number IT0004457070) and “€365,000,000 UBI subordinato Lower Tier II fix to float con rimborso anticipato 30.06.2009-2019” (ISIN number IT0004497050). Both securities were issued by UBI Banca – on 13th March and 30th June 2009 respectively – in accordance with the base prospectus filed with the Consob (Italian securities market authority) on 9th October 2008 and both bonds carry an early redemption option with the first call option on 13th March and 30th June 2014. Waiver of the right to early redemption of the securities is designed to maintain the eligibility of these bonds for inclusion in the regulatory capital, in view of the provisions of Basel 3 rules implemented by means of EU Directive 2013/36 (the “Capital Requirements Directive”) and EU Regulation 575/2013 (the “Capital Requirements Regulation”). This decision follows on from decisions not to make use of early redemption options made by the Issuer for previous issues of similar securities. In compliance with the provisions of the regulations for each bond, disclosure of the waiver has been carried out by publication on the corporate website (www.ubibanca.it) and through the Borsa Italiana SDIR-NIS system (Network Information System). Waiver of the right to early
25Following the issue, UBI Banca had repurchased bonds for a nominal amount of €88,350,000 as part
of a public exchange offer in June 2009. In 2012 it had then proceeded to make direct purchases on the market for a further nominal amount of €30,000,000 .
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redemption involved an amendment as a consequence to the text of the regulations of the bonds concerned.
*** Early redemption of preference shares
Following authorisation received from the Bank of Italy, on 27th December 2013 UBI Banca passed a resolution for the early redemption of the total amount of the three series of innovative capital instruments (preference shares) outstanding on the dates reported below.
Issuer ISIN Number Listed market
Nominal value of the issue
Remaining
amount in issue* Maturity date
Early redemption date
Banca Popolare di Bergamo
Capital Trust XS0123998394 Luxembourg 300,000 182,095
Perpetual securities
15th February
2014
Banca Lombarda Preferred
Securities Trust XS0108805564 London 155,000 90,314
Perpetual
securities 10th March 2014 Banca Popolare Commercio e
Industria Capital Trust XS0131512450 Luxembourg 115,000 65,338
Perpetual
securities 27th March 2014 * Following previous capital management transactions €232,253 thousand of the preference shares are no longer in
issue, because they are held in portfolio by UBI Banca. This amount is not included in capital ratio calculations.
This decision to proceed to early redemption also takes account of Basel 3 regulations in force from 2014. These instruments, which were previously included in the tier one capital, are no longer eligible and as such would have been progressively excluded from the tier one capital. In consideration of their (i) already modest contribution, limited to only those securities still in issue, which would reduce further from 2014, and (ii) the current and also future cost of maintaining these instruments, the Group decided to redeem them on the first available date for each issue.
The table below gives details of the items of which the regulatory capital was composed as at 31st December 2013.
COMPOSITION OF THE REGULATORY CAPITAL 31.12.13 30.06.13 31.12.12
TIER ONE CAPITAL
- Positive elements - Share capital 2,717,340 2,717,448 2,719,788 - Share premiums 4,772,267 4,772,317 4,772,715 - Reserves 3,553,596 3,551,349 3,527,244
- Innovative capital instruments and non-innovative capital instruments with maturity
- - -
- Non-innovative capital instruments:
- - -
- non innovative capital instruments eligible up to 35%
- - -
- non-innovative capital instruments eligible up to 50%
- - -
- Instruments subject to transition provisions (grandfathering) - (*) 382,854
382,854
382,854
- Profit for the period
192,119
26,611
25,662
- Prudential filters: increases of tier one capital -
-
-
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- Fair value option: changes in its creditworthiness - - - - Redeemable shares - - -
- Capital resources subject to forward pledge of purchase eligible for inclusion in tier 1 capital
- - -
- Other positive prudential filters
3
34
240
- Total positive elements of tier one capital 11,618,179 11,450,613 11,428,503 - Negative elements:
- Treasury shares or quotas
6,121 6,121 4,375 - Goodwill 2,549,248 2,574,144 2,574,144
- Other intangible assets
327,142
327,035
342,679
- Loss for the period
-
-
-
- Other negative elements:
-
-
-
- Net impairment losses on loans
-
-
-
- Net impairment of supervisory amounts relating to the "trading portfolio for supervisory purposes "
- - - - Other - - -
- Prudential filters: deductions from tier one capital -
-
-
- Fair value option: changes in its creditworthiness -
-
-
- Negative reserves on available-for-sale securities -
-
-
- Equity instruments and units in UCITS
- - - - Debt instruments - 25,013 30,711
- Cumulative net gains on property, plant and equipment -
-
-
- Capital elements subject to forward pledge of purchase eligible for inclusion in tier one capital
- - -
- Other negative filters
-
-
-
- Total negative elements of tier one capital 2,882,511
2,932,313
2,951,909
- Tier one capital before items to be deducted 8,735,668
8,518,300
8,476,594