Meeting real needs with concrete solutions. UniCredit S.p.A. 2011 Reports and Accounts Every day, life presents new challenges and opportunities. Every day, we each have a new story to tell that involves tangible needs and requires clear answers. In this year’s annual report, we illustrate our way of banking with stories of the people, businesses and institutions who use our customized solutions. You will read stories about how we worked together to promote sports in schools and how we gave a boost to long-established industrial firms by enabling them to update their machinery. You will also learn about how we have supported the development of new computer systems and have provided broad support to the green economy. These stories were built on entrepreneurship, courageous innovation, respect for tradition, and our strong bonds with local communities. We strongly believe that being a bank today means making a concrete difference, day in and day out, for those who have chosen to do business with us. It means facing challenges together and creating a world of new opportunities. These are true stories - snapshots of ordinary life that shape the mosaic of our daily work. At UniCredit, we are creating a world of relationships, where our stakeholders can best meet the changing needs of the times. UniCredit S.p.A. 2011 Reports and Accounts Rewarding talented young entrepreneurs. As Italy’s future relies on its young talents, Il talento delle idee (The Talent of Ideas), a contest involving UniCredit and the Young Entrepreneurs Association, provides a valuable challenge. Dedicated to entrepreneurs between the ages of 18 and 40, the contest identifies and promotes business ideas based on feasibility and innovation. Originators of the three best ideas are awarded with specialized financial support, entrepreneurial training, introductions to potential investors and mentoring from UniCredit. Financial awards go to selected projects at a national level. This is a concrete example of how real needs find clear answers at UniCredit. Contents Introduction 5 Board of Directors, Board of Statutory Auditors and External Auditors 7 Chairman’s message to the Shareholders 8 CEO’s Letter to the Shareholders 10 Note on the Report and Financial Statements 12 Directors’ Report on operations 15 Highlights 16 Condensed Financial Statements 18 UniCredit Share 20 Results of the period 21 Organizational model 32 Other information 35 Subsequent Events and Outlook 42 Proposals to the Shareholders’ Meeting 45 Company Financial Statements 47 Financial Statements 49 Notes to the Financial Statements 57 Annexes 267 Annual financial statements certification pursuant to Article 81-ter of Consob Regulation no. 11971/99, as amended 285 Reports and resolutions 289 Report of the Board of Auditors 291 Report of the External Auditors pursuant to Article 14 and 16 of Legislative Decree no, 39 of January 27, 2010 301 Resolutions assumed by the ordinary Shareholders’ Meeting 305 Notes The following conventional symbols have been used in the tables: • a dash (-) indicates that the item/fi gure is inexistent or that the fi gures do not reach the minimum considered signifi cant; • “n.s.” when are not in any case considered signifi cant. Any discrepancies between data are solely due to the effect of rounding. UniCredit S.p.A. · 2011 Reports and Accounts 3 Celebrating with three million young Europeans. Bank Austria is one of the main sponsors of the Donauinselfest, or Danube Island Festival, one of the largest open-air events in Europe. The 29th annual celebration of Donauinselfest will take place from 22 to 24 June, 2012 in Vienna. Each year, this free public festival attracts as many as three million young people from all over Europe. To appreciate the scale of this event, last year’s festival featured 18 “festival islands” and 11 stages spread across 4.5 km and involved more than 2000 artists. The bank’s significant sponsorship of Donauinselfest underscores Bank Austria’s strong support for the social and cultural development of young people from across Europe. Donauinselfest, Wien, Danube Island Introduction Board of Directors, Board of Statutory Auditors and External Auditors 7 Chairman’s message to the Shareholders 8 CEO’s Letter to the Shareholders 10 Note on the Report and Financial Statements 12 UniCredit S.p.A. · 2011 Reports and Accounts 5 Tailoring investment strategies for foundations. In Austria, approximately 3,100 large private foundations perform a diverse range of activities. Austrian civil and tax codes present these organizations with a complex legal environment that requires specific solutions. In 2011, Bank Austria created a competence line that specializes in serving foundations. Highly qualified staff advise these clients and guide them through all phases of the transactions. The bank provides valuable resources including developing investment strategies that suit the specific purposes of a foundation, analyzing and managing liquidity and addressing financial needs while minimizing liability risk. With this project UniCredit has offered a simple answer for customers with sophisticated and complex requirements. Board of Directors, Board of Statutory Auditors and External Auditors (as at December 31, 2011) Board of Directors* Dieter Rampl Chairman Luigi Castelletti First deputy Chairman Farhat Omar Bengdara Deputy Chairman Vincenzo Calandra Buonaura Fabrizio Palenzona Federico Ghizzoni CEO Giovanni Belluzzi Directors Manfred Bischoff Donato Fontanesi Francesco Giacomin Friedrich Kadrnoska Marianna Li Calzi Luigi Maramotti Antonio Maria Marocco Carlo Pesenti Lucrezia Reichlin Hans-Jürgen Schinzler Theodor Waigel Anthony Wyand Franz Zwickl Lorenzo Lampiano Company Secretary Board of Statutory Auditors Maurizio Lauri Chairman Cesare Bisoni Standing Auditors Vincenzo Nicastro Michele Rutigliano Marco Ventoruzzo Massimo Livatino Alternate Auditors Paolo Domenico Sfameni Roberto Nicastro General Manager Marina Natale Nominated Official in charge of Drawing up Company Accounts KPMG S.p.A. External Auditors (*) 2011 Director Salvatore Ligresti handed in his resignation with effect from March 22, 2011. Mr. Piero Gnudi ceased being a Director on November 16, 2011 as he took government office. Director Enrico Tommaso Cucchiani handed in his resignation with effect from December 16, 2011. 2012 On January 31, 2012 the Board of Directors co-opted Mrs. Helga Jung onto the Board of Directors. UniCredit S.p.A. Director Carlo Pesenti handed in his resignation with effect from January 31, 2012. Registered office: Via Alessandro Specchi 16, 00186 Rome Central management office: Piazza Cordusio - 20123 Milan Share capital: €19,647,948,525.10 fully paid in Bank entered in the Register of Banks and Parent Company of the UniCredit Banking Group Banking Group Register: No. 02008.1. No. ABI 02008.1. Registered in the Rome Trade and Companies Register, Fiscal Code and VAT No.: 00348170101 Member of the Interbank Deposit Protection Fund UniCredit S.p.A. · 2011 Reports and Accounts 7 Chairman’sLettera del Presidente message to the Shareholders I am confident that the “measures we have taken, bolstered by our extensive and diversified financial network in Western Europe and in the high- growth CEE countries, will ensure a bright future for the Bank and offer sustainable value to our stakeholders. ” Dear Shareholders, 2011 was an important year for UniCredit in a complex and versus the Bund. The markets started losing confidence in the difficult economic environment that has put the European ability of the Euro countries to effectively and appropriately Financial System again under stress. handle the crisis. By year end the situation was still difficult and volatile, notwithstanding the strong and decisive actions During this year we took several important decisions for the taken by the Governments to strengthen the countries Bank. We wrote off over € 10B in goodwill and other intangible balance sheet and ultimately reassuring on the resilience of assets, we presented to the market our multi-year plan and we the Euro zone. successfully launched and completed a € 7,5B capital increase The BCE again took unprecedented measures to ensure the taking our core Tier 1 close to 10%. These were difficult stability of the financial markets. All of this was painful but but necessary decisions to ensure the Bank could face with necessary, with important consequences on the standard confidence both the challenges and the opportunities ahead. of living of the European citizens who endured austerity The Management faced reality and acted decisively. measures that will have long standing impact on their lives. At the beginning of the year 2011 we were optimistic. For the Banking sector as a whole this year clearly took a toll Although growth was still lagging in most of the European on their profitability and required a further strengthening of the markets the difficult years of the financial crisis, we thought, capital base, also as required by the results of the EBA stress were behind us. However, we were proved wrong as the tests. A combination of cost measures, selective deleveraging sovereign debt crisis initiated in Greece, and spread quickly, and a significant capital increase were the concrete answers hitting most of the European countries and particularly that UniCredit gave to the challenges of the crisis. Ireland, Portugal, Spain and finally Italy. During the third quarter, the situation became serious with the spreads on the Today, however, confidence has come back and the markets sovereign bonds of these countries hitting record high levels look with optimism at a still difficult 2012, where most 8 2011 Reports and Accounts · UniCredit S.p.A. European countries will record modest growth rates and others monitored the activities of the Bank and maintained close will be experiencing the difficulties of the recession. oversight of those that fell within their respective areas of The optimism stems from the confidence that the Governments specialization. The Remuneration Committee continued to have taken the right decisions, the Greek crisis although far from assess the compensation packages of top management over has been dealt with and 2013 looks more and more solid.