Bond UniCred 0% ( XS1074246106 ) in EUR

UniCred

100 % ▼

Italy

XS1074246106 ( in EUR )

29/07/2019 - Bond has expired

Prospectus brochure of the bond UniCredit XS1074246106 in EUR 0%, expired

50 000 EUR

60 300 000 EUR

UniCredit is a major Italian banking group offering a wide range of financial services including commercial banking, investment banking, and wealth management across Europe, Central and Eastern Europe, and the Middle East.

The Bond issued by UniCred ( Italy ) , in EUR, with the ISIN code XS1074246106, pays a coupon of 0% per year.
The coupons are paid 1 time per year and the Bond maturity is 29/07/2019

UniCredit S.p.A.
35,000,000,000
Obbligazioni Bancarie Garantite Programme
Guaranteed by UniCredit BpC Mortgage S.r.l.
Under the 35,000,000,000 Obbligazioni Bancarie Garantite Programme (the "Programme") described in this prospectus (the "Prospectus"), UniCredit S.p.A. (in its capacity as issuer of the OBG, as defined below,
the "Issuer"), subject to compliance with all relevant laws, regulations and directives, may from time to time issue
(the "OBG" which term includes, for the avoidance of doubt,
Registered OBG, as defined below) guaranteed by UniCredit BpC Mortgage S.r.l. (the "OBG Guarantor") pursuant to Article 7
of Italian law No. 130 of 30 April 1999 (
), as amended from time to time (the "Law 130") and regulated by the Decree of the Ministry of Economy and Finance of 14 December 2006, No. 310, as amended from time to time (the "MEF Decree") and
the supervisory guidelines of the Bank of Italy set out in Title V, Chapter 3 of the "
!
"
#
$
" (Circolare No. 263 of 27 December 2006), as amended and
supplemented from time to time (the "BoI OBG Regulations").
The payment of all amounts due in respect of the OBG will be unconditionally and irrevocably guaranteed by the OBG Guarantor. Recourse against the OBG Guarantor is limited to the Available Funds (both as
defined below).
The maximum aggregate nominal amount of OBG from time to time outstanding under the Programme will not at any time exceed 35,000,000,000 (or its equivalent in other currencies calculated as described herein),
subject to increase as provided for under the Dealer Agreement.
The OBG issued under the Programme (other than Registered OBG) will have a minimum denomination of 100,000 and integral multiples of 1,000 in excess thereof (or, if the relevant Series of OBG is denominated
in a currency other than euro, the equivalent amount in such currency) or such other higher denomination as may be specified in the relevant Final Terms (or its equivalent in another currency as at the date of issue of
the relevant Series of OBG).
OBG may be issued in dematerialised form or in registered form also as German law governed registered covered bonds (
!
) (the "Registered OBG"). The terms and conditions of the
relevant Registered OBG (the "Registered OBG Conditions") are not subject to the generally applicable terms and conditions of the OBG contained in the section headed "Terms and Conditions of the OBG") and
will specify the terms and conditions (including minimum denomination) applicable to the relevant Registered OBG, which will not be listed. This Prospectus does not relate to the Registered OBG which may be
issued by the Issuer under the Programme pursuant to either separate documentation or the documents described in this Prospectus after having made the necessary amendments. The approval of this Prospectus by
the CSSF does not cover any Registered OBG which may be issued by the Issuer.
The OBG may be issued on a continuing basis to the Dealer(s) appointed under the Programme in respect of the OBG from time to time by the Issuer (each a "Dealer" and together the "Dealers"), the appointment of
which may be for a specific issue or on an on going basis. References in this Prospectus to the "relevant Dealer" shall, in the case of an issue of OBG being (or intended to be) subscribed by more than one Dealer, be
to all Dealers agreeing to subscribe such OBG.
This Prospectus constitutes a base prospectus for the purposes of Article 5.4 of Directive 2003/71/EC of the European Parliament and of the Council of 4 November 2003, as amended (which includes the amendments
made by Directive 2010/73/EU, to the extent that such amendments have been implemented in the relevant Member State of the European Economic Area) (the "Prospectus Directive") and the relevant implementing
measures in the Grand Duchy of Luxembourg. This Prospectus will be available on the Luxembourg Stock Exchange website at www.bourse.lu.
This Prospectus has been approved by the %
!
&
(the "CSSF"), which is the Luxembourg competent authority for the purposes of the Prospectus Directive and relevant
implementing measures in Luxembourg, as a base prospectus issued in compliance with the Prospectus Directive and relevant implementing measures in Luxembourg for the purposes of giving information with regard
to the issue of OBG under the Programme during the period of twelve (12) months after the date hereof.
By approving this Prospectus, the CSSF assumes no responsibility as to the economic and financial soundness of the transaction and the quality and solvency of the Issuer in accordance with the provisions of Article 7
(7) of the Luxembourg law on prospectuses for securities.
Application has also been made to the Luxembourg Stock Exchange for the OBG (other than the Registered OBG) issued under the Programme to be admitted during the period of 12 months from the date of this
Prospectus to the official list of the Luxembourg Stock Exchange (the "Official List") and to be admitted to trading on the Luxembourg Stock Exchange's regulated market. References in this Prospectus to OBG being
"listed" (and all related references) shall mean that such OBG (other than the Registered OBG) have been admitted to the Official List and admitted to trading on the Luxembourg Stock Exchange's regulated market.
The Luxembourg Stock Exchange's regulated market is a regulated market for the purposes of Directive 2004/39/EC of the European Parliament and of the Council on markets in financial instruments. However,
unlisted OBG may be issued pursuant to the Programme. The relevant Final Terms (as defined below) in respect of the issue of any OBG (other than the Registered OBG) will specify whether or not such OBG will be
listed on the Official List and admitted to trading on the Luxembourg Stock Exchange's regulated market (or any other stock exchange).
Each Series or Tranche (both as defined below) of OBG may be issued without the consent of the holders of any outstanding OBG, subject to certain conditions. OBG of different Series may have different terms and
conditions, including, without limitation, different maturity dates. Notice of the aggregate nominal amount of OBG, interest (if any) payable in respect of OBG, the issue price of OBG and any other terms and
conditions not contained herein which are applicable to each Tranche will be set out in final terms (the "Final Terms") which, with respect to OBG to be listed on the Luxembourg Stock Exchange, will be delivered to
the Luxembourg Stock Exchange on or before the date of issue of the OBG of such Series or Tranche.
The OBG will be issued in dematerialised form (
), will be subject to the generally applicable terms and conditions of the OBG (contained in the section headed "Terms and Conditions
of the OBG") and the applicable Final Terms and will be held in such form on behalf of the beneficial owners, until redemption and cancellation thereof, by Monte Titoli S.p.A. with registered office at Piazza degli
Affari, 6, 20123 Milan, Italy ("Monte Titoli") for the account of the relevant Monte Titoli Account Holders. The expression "Monte Titoli Account Holders" means any authorised financial intermediary institution
entitled to hold accounts on behalf of their customers with Monte Titoli (and includes any Relevant Clearing System which holds account with Monte Titoli or any depository banks appointed by the Relevant Clearing
System). The expression "Relevant Clearing Systems" means any of Clearstream Banking,
' '
("Clearstream, Luxembourg") and Euroclear Bank S.A./N.V. as operator of the Euroclear System
("Euroclear"). The OBG of each Series or Tranche, issued in dematerialised form, will be deposited by the Issuer with Monte Titoli on the relevant Issue Date (as defined herein), will be in bearer form, will be at all
times be in book entry form and title to the relevant OBG of each Series or Tranche will be evidenced by book entry in accordance with the provisions of Article 83
of Italian legislative decree No. 58 of 24
February 1998, as amended and supplemented (the "Financial Services Act"), and with regulation issued by the Bank of Italy and the %

$
("CONSOB") on 22 February
2008, as subsequently amended. No physical document of title will be issued in respect of the OBG of each Series or Tranche.
Each Series or Tranche of OBG may be assigned, on issue, a rating by one or more of Fitch Ratings Limited ("Fitch"), Moody's Investors Service Limited ("Moody's") and Standard & Poor's Ratings Services, a
subsidiary of The McGraw Hill Companies, Inc.("S&P" and, together with Fitch and Moody's, the "Rating Agencies", which expression shall include any successor thereof) or may be unrated as specified in the
relevant Final Terms. Where a Tranche or Series of OBG is to be rated, such rating will not necessarily be the same as the rating assigned to the OBG already issued. Whether or not a rating in relation to any Tranche
or Series of OBG will be treated as having been issued by a credit rating agency established in the European Union and registered under Regulation (EC) No 1060/2009 on credit rating agencies as amended by
Regulation (EU) No 513/2011 (the "CRA Regulation") will be disclosed in the relevant Final Terms. The credit ratings included or referred to in this Prospectus have been issued by Fitch, Moody's or S&P, each of
which is established in the European Union and registered under the CRA Regulation as set out in the list of credit rating agencies registered in accordance with the CRA Regulation published on the website of the
European Securities and Markets Authority ("ESMA") pursuant to the CRA Regulation (for more information please visit the ESMA webpage http://www.esma.europa.eu/page/List registered and certified CRAs). In
general, European regulated investors are restricted from using a rating for regulatory purposes if such rating is not issued by a credit rating agency established in the European Union and registered under the CRA
Regulation (and such registration has not been withdrawn or suspended). Conditions precedent to the issuance of any Tranche include that S&P confirms (where applicable) that the issuance of such Tranche will not
result in a reduction or withdrawal of the then current ratings by S&P of any of the then outstanding Series or Tranches.
A credit rating is not a recommendation to buy, sell or hold OBG and may be subject to revision, suspension or withdrawal by any or all of the Rating Agencies and each rating shall be evaluated
independently of any other.
The OBG of each Series or Tranche will mature on the date mentioned in the applicable Final Terms (each a "Maturity Date"). Before the relevant Maturity Date, the OBG of each Series or Tranche will be subject to
mandatory and/or optional redemption in whole or in part in certain circumstances (as set out in the Conditions (as defined below)).
Subject to certain exceptions as provided for in Condition 10 (( )
), payments in respect of the OBG to be made by the Issuer will be made without deduction for or on account of withholding taxes imposed by
any tax jurisdiction. In the event that any such withholding or deduction is made the Issuer will be required to pay additional amounts to cover the amounts so deducted. In such circumstances and provided that such
obligation cannot be avoided by the Issuer taking reasonable measures available to it, the OBG will be redeemable (in whole, but not in part) at the option of the Issuer. See Condition 8(c). The OBG Guarantor will not
be liable to pay any additional amount due to taxation reasons in case an Issuer Event of Default (as defined below) has occurred. See "( )
", below.
Prospective investors should have regard to the factors described under the section headed "
" in this Prospectus.
UniCredit Bank AG, London Branch
UniCredit Bank AG
The date of this Prospectus is 4 April 2014.
//
1

This Prospectus comprises a base prospectus for the purposes of Article 5.4 of the Prospectus
Directive and for the purpose of giving information with regard to the Issuer, the OBG Guarantor
and the OBG which, according to the particular nature of the OBG, is necessary to enable investors
to make an informed assessment of the assets and liabilities, financial position, profit and losses and
prospects of the Issuer and of the OBG Guarantor and of the rights attaching to the OBG.
The Issuer accepts responsibility for the information contained in this Prospectus. To the best of the
knowledge of the Issuer, having taken all reasonable care to ensure that such is the case, the
information contained in this Prospectus is in accordance with the facts and does not omit anything
likely to affect the import of such information.
The OBG Guarantor has provided the information set out in the section headed "
*$+ +
" below and any other information contained in this Prospectus relating to itself for
which the OBG Guarantor, together with the Issuer, accepts responsibility. To the best of the
knowledge of the OBG Guarantor (having taken all reasonable care to ensure that such is the case)
the information and data in relation to which it is responsible as described above are in accordance
with the facts and do not contain any omission likely to affect the import of such information and
data. With respect to such information provided by the OBG Guarantor, the responsibility of the
Issuer is limited to their correct reproduction.
Subject as provided in the applicable Final Terms, the only persons authorised to use this Prospectus
(and, therefore, acting in association with the Issuer) in connection with an offer of OBG are the
persons named in the applicable Final Terms as the relevant Dealer(s).
Copies of the Final Terms will be available from the registered office of the Issuer and the specified
office set out below of the Paying Agent (as defined below) and on the website of the Luxembourg
Stock Exchange (www.bourse.lu).
This Prospectus is to be read in conjunction with any document incorporated herein by reference
(see "
" below). This Prospectus shall be read and construed
on the basis that such documents are incorporated by reference in and form part of this Prospectus.
Full information on the Issuer, the OBG Guarantor and any Series or Tranche of OBG is only
available on the basis of the combination of the Prospectus, any supplements, the relevant Final
Terms and the documents incorporated by reference.
Unless otherwise defined in the relevant section of this Prospectus in which they are used,
capitalised terms used in this Prospectus shall have the meaning ascribed to them in the section
headed "(
%
*$+" below. For ease of reference, the section headed "
)
(
" below indicates the page of this Prospectus on which each capitalised term is
defined.
None of the Dealers or the Sole Arranger makes any representation, expressed or implied, or
accepts any responsibility or liability, with respect to the accuracy or completeness of any of the
information in this Prospectus. Each potential purchaser of OBG should determine for itself the
relevance of the information contained in this Prospectus and its purchase of OBG should be based
upon such investigation as it deems necessary. None of the Dealers or the Sole Arranger undertakes
to review the financial condition or affairs of the Issuer or the OBG Guarantor during the life of the
2

arrangements contemplated by this Prospectus or by any supplement or to advise any investor or
potential investor in OBG of any information coming to the attention of any of the Dealers or the
Sole Arranger.
This Prospectus contains industry and customer related data as well as calculations taken from
industry reports, market research reports, publicly available information and commercial
publications. It is hereby confirmed that (a) to the extent that information reproduced herein derives
from a third party, such information has been accurately reproduced and (b) insofar as the Issuer
and the OBG Guarantor are aware and are able to ascertain from information derived from a third
party, no facts have been omitted which would render the information reproduced inaccurate or
misleading.
The following sources of information, among others, have been used:
(i)
Bank of Italy: data used for the Issuer's internal estimate of the market shares for loans and
direct deposits held in Italy; data on the Italian banking market, in particular the number of
active bank branches and financial promoters;
(ii)
Italian association of asset managers (
,
+
):
data used for the Issuer's internal estimates of market shares in mutual funds in Italy;
(iii)
Fitch, Moody's and S&P: data and information used for the explanation of the factors
addressed by the ratings assigned by each of the relevant Rating Agency;
(iv)
Italian Banking Association ( $ ,
$
): data used for the
Issuer's internal estimates of market shares in direct deposits in Italy.
Commercial publications generally state that the information they contain originates from sources
assumed to be reliable, but that the accuracy and completeness of such information is not
guaranteed, and that the calculations contained therein are based on a series of assumptions.
External data has not been independently verified by the Issuer and the OBG Guarantor.
No person has been authorised to give any information or to make any representation other
than those contained in this Prospectus in connection with the issue or sale of the OBG and, if
given or made, such information or representation must not be relied upon as having been
authorised by the Issuer, the OBG Guarantor or any of the Dealer(s) or the Sole Arranger (as
defined in "General Description of the Programme"). Neither the delivery of this Prospectus
nor any sale made in connection herewith shall, under any circumstances, create any
implication that there has been no change in the affairs of the Issuer or the OBG Guarantor
since the date hereof or the date upon which this Prospectus has been most recently amended
or supplemented or that there has been no adverse change in the financial position of the
Issuer or the OBG Guarantor since the date hereof or the date upon which this Prospectus has
been most recently amended or supplemented or that any other information supplied in
connection with the Programme is correct as of any time subsequent to the date on which it is
supplied or, if different, the date indicated in the document containing the same.
Neither the delivery of this Prospectus nor the offering, sale or delivery of any OBG shall in any
circumstances imply that the information contained herein concerning the Issuer and the OBG
Guarantor is correct at any time subsequent to the date hereof or that any other information supplied
3

in connection with the Programme is correct as of any time subsequent to the date indicated in the
document containing the same. The Dealer(s) and the Representative of the OBG Holders expressly
do not undertake to review the financial condition or affairs of the Issuer or the OBG Guarantor
during the life of the Programme or to advise any investor in the OBG of any information coming to
their attention. Investors should review,
, the most recently published documents
incorporated by reference into this Prospectus, as it may have been supplemented from time to time,
when deciding whether or not to purchase any OBG.
Neither this Prospectus nor any other financial statements are intended to provide the basis of any
credit or other evaluation and should not be considered as a recommendation by any of the Issuer,
the Sole Arranger, the OBG Guarantor or the Dealer(s) that any recipient of this Prospectus or any
other financial statements should purchase the OBG. Each potential purchaser of OBG should
determine for itself the relevance of the information contained in this Prospectus and its purchase of
OBG should be based upon such investigation as it deems necessary. None of the Dealer(s) or the
Sole Arranger undertakes to review the financial condition or affairs of the Issuer or the OBG
Guarantor during the life of the arrangements contemplated by this Prospectus nor to advise any
investor or potential investor in the OBG of any information coming to the attention of any of the
Dealer(s) or the Sole Arranger.
The distribution of this Prospectus and the offering or sale of the OBG in certain jurisdictions may
be restricted by law. Persons into whose possession this Prospectus comes are required by the
Issuer, the OBG Guarantor, the Dealer(s) and the Sole Arranger to inform themselves about and to
observe any such restriction. For a description of certain restrictions on offers and sales of OBG and
on distribution of this Prospectus, see "
" below.
The OBG have not been and will not be registered under the United States Securities Act of 1933
(the "Securities Act") or with any securities regulatory authority of any state or other jurisdiction of
the United States and include OBG in bearer form that are subject to U.S. tax law requirements.
Subject to certain exceptions, OBG may not be offered, sold or delivered within the United States or
to, or for the account or benefit of, U.S. persons (as defined in the U.S. Internal Revenue Code of
1986, as amended, and regulations thereunder). For a description of certain restrictions on offers
and sales of OBG and on distribution of this Prospectus, see "
" below.
This Prospectus does not constitute an offer of, or an invitation by or on behalf of the Issuer, the
OBG Guarantor or the Dealer(s) to subscribe for, or purchase, any OBG.
This Prospectus does not constitute an offer to sell or the solicitation of an offer to buy any OBG in
any jurisdiction to any person to whom it is unlawful to make the offer or solicitation in such
jurisdiction. The distribution of this Prospectus and the offer or sale of OBG may be restricted by
law in certain jurisdictions. The Issuer, the OBG Guarantor, the Dealers, the Sole Arranger and the
Representative of the OBG Holders do not represent that this Prospectus may be lawfully
distributed, or that any OBG may be lawfully offered, in compliance with any applicable
registration or other requirements in any such jurisdiction, or pursuant to an exemption available
thereunder, or assume any responsibility for facilitating any such distribution or offering. In
particular, unless specifically indicated to the contrary in the applicable Final Terms, no action has
been taken by the Issuer, the OBG Guarantor, the Dealers, the Sole Arranger or the Representative
4

of the OBG Holders which is intended to permit a public offering of any OBG outside Luxembourg
or distribution of this Prospectus in any jurisdiction where action for that purpose is required.
Accordingly, no OBG may be offered or sold, directly or indirectly, and neither this Prospectus nor
any advertisement or other offering material may be distributed or published in any jurisdiction,
except under circumstances that will result in compliance with any applicable laws and regulations.
Persons into whose possession this Prospectus or any OBG may come must inform themselves
about, and observe, any such restrictions on the distribution of this Prospectus and the offering and
sale of OBG. In particular, there are restrictions on the distribution of this Prospectus and the offer
or sale of OBG in the United States, Japan and the European Economic Area (including the United
Kingdom and the Republic of Italy). See also "
", below.
Each initial and each subsequent purchaser of an OBG will be deemed, by its acceptance of such
Note, to have made certain acknowledgements, representations and agreements intended to restrict
the resale or other transfer thereof as described in this Prospectus and in any Final Terms and, in
connection therewith, may be required to provide confirmation of its compliance with such resale or
other transfer restrictions in certain cases. See "
", below.
In connection with the issue of any Series or Tranche under the Programme, the Dealer or
Dealers (if any) named as the stabilising manager(s) (the "Stabilising Manager(s)") (or
persons acting on behalf of any Stabilising Manager(s)) in the applicable Final Terms may
over;allot the relevant Series or Tranche or effect transactions with a view to supporting the
market price of the relevant Series or Tranche at a level higher than that which might
otherwise prevail. However, there is no assurance that the Stabilising Manager(s) (or any
person acting on behalf of any Stabilising Manager) will undertake stabilisation action. Any
stabilisation action may begin on or after the date on which adequate public disclosure of the
terms of the offer of the OBG of the relevant Series or Tranche is made and, if begun, may be
ended at any time, but it must end no later than the earlier of 30 days after the issue date of
the relevant Series or Tranche and 60 days after the date of the allotment of the relevant
Series or Tranche. Any stabilisation action or over;allotment must be conducted by the
relevant Stabilising Manager(s) (or any person acting on behalf of any Stabilising Manager(s))
in accordance with all applicable laws and rules.
All references in this Prospectus to: (i) "Euro", "" and "euro" refer to the currency introduced at
the start of the third stage of European economic and monetary union pursuant to the Treaty
establishing the European Community (signed in Rome on 25 March 1957), as amended; (ii)
"U.S.$" or "U.S. Dollar" are to the currency of the Unites States of America; (iii) "£" or "UK
Sterling" are to the currency of the United Kingdom; (iv) "PLN" are to the currency of Poland; (v)
"Italy" are to the Republic of Italy; (vi) laws and regulations are, unless otherwise specified, to the
laws and regulations of Italy; and (vii) "billions" are to thousands of millions.
Certain monetary amounts and currency translations included in this Prospectus have been subject
to rounding adjustments; accordingly, figures shown as totals in certain tables may not be an
arithmetic aggregation of the figures which preceded them.
5

The language of this Prospectus is English. Certain legislative references and technical terms have
been cited in their original language in order that the correct technical meaning may be ascribed to
them under applicable law.
The Sole Arranger is acting for the Issuer and no one else in connection with the Programme and
will not be responsible to any person other than the Issuer for providing the protection afforded to
clients of the Sole Arranger or for providing advice in relation to the issue of the OBG.
6

TABLE OF CONTENTS
Page
RISK FACTORS ................................................................................................................................. 8
DOCUMENTS INCORPORATED BY REFERENCE .................................................................... 59
GENERAL DESCRIPTION OF THE PROGRAMME.................................................................... 67
STRUCTURE DIAGRAM ............................................................................................................. 122
DESCRIPTION OF THE ISSUER ................................................................................................. 123
DESCRIPTION OF THE PORTFOLIO THE CREDIT AND COLLECTION POLICIES ........ 183
DESCRIPTION OF THE OBG GUARANTOR ............................................................................ 197
DESCRIPTION OF THE ASSET MONITOR ............................................................................... 201
CREDIT STRUCTURE .................................................................................................................. 202
ACCOUNTS AND CASH FLOWS ............................................................................................... 213
USE OF PROCEEDS...................................................................................................................... 229
DESCRIPTION OF THE TRANSACTION DOCUMENTS ......................................................... 230
SELECTED ASPECTS OF ITALIAN LAW ................................................................................. 250
TERMS AND CONDITIONS OF THE OBG ................................................................................ 263
RULES OF THE ORGANISATION OF THE OBG HOLDERS ................................................... 301
FORM OF FINAL TERMS ............................................................................................................ 322
KEY FEATURES OF REGISTERED OBG ( -.
%/01
".
%/ . $0 +) ............... 333
TAXATION IN THE REPUBLIC OF ITALY............................................................................... 335
LUXEMBOURG TAXATION ....................................................................................................... 345
SUBSCRIPTION AND SALE........................................................................................................ 349
GENERAL INFORMATION.......................................................................................................... 353
INDEX OF DEFINED TERMS...................................................................................................... 357
7

RISK FACTORS
.
*$+ +
!
*$+
#
2
*$+ +
)
!
3
2
4
*$+ +
!
3
3
*$+
#
2
.
*$+ +
!
3
!
*$+
#
4
*$+ +
4
*$+
3
*$+ +
3
*$+
)
! 2 #
!
!
#
!
3
!
2
1.
Factors that may affect the Issuer's ability to fulfil its obligations under or in connection
with the OBG issued under the Programme
3
5
0 %
+
6
The UniCredit Group (as defined below in the section headed "
" below) is
subject to liquidity risk, which can be split between funding liquidity risk and market liquidity risk.
Funding liquidity risk is the risk that the bank will be unable to meet its obligations, including
funding commitments and deposit withdrawals, as they fall due. In this context, the procurement of
liquidity for business activities and the ability to access long term financing are necessary to enable
the Group to meet its payment obligations in cash, scheduled or unscheduled, and avoid prejudice to
its current activities and financial situation.
The global financial crisis and resulting financial instability have significantly reduced the levels
and availability of liquidity provided by private placements which led to a significant intervention
of government guaranteed bonds that have been pledged with the European Central Bank to access
open market operations.
The perception of banking industry riskiness remained high even though reduced interbank lending
implies a lower funding liquidity risk. It should be noted that market speculative behaviour, in
particular towards peripheral countries, has been successfully dealt with by government
intervention. Should this government support vanish, the Group would be forced to rely on higher
recourse to the wholesale market, which seems to be feasible in case of a normalisation of the
macroeconomic conditions. Also retail customers are expected to benefit from a more stable
liquidity context. Indeed retail customers are interwoven with the banking system, since they invest
in network bonds as well as place the deposits and other funding sources which grew significantly
in the last period.
8

In this context, the Group has announced, as part of its Strategic Plan (as defined below), its
intention to decrease the proportion of wholesale funding in favour of retail funding. However,
reduced customer confidence could result in the Group's inability to access retail funding and to
increased deposit outflows, which in turn could further limit the Group's ability to fund its
operations and meet its minimum liquidity requirements. This strategy is in line with the expected
requirements of the Basel Committee which favours banks to leverage on more stable funding
sources such as core retail.
UniCredit also borrows from the European Central Bank (the "ECB"). Thus, any adverse change to
the ECB's lending policy, including changes to collateral requirements (particularly those with
retroactive effect), or any changes to the funding requirements set by the ECB, could significantly
affect the Group's results of operations, business and financial condition.
In terms of market liquidity, the effects of the immediate liquidity of the assets held as cash reserves
should be considered. Sudden changes in market conditions (interest rates and creditworthiness in
particular) can impact significantly on the time to sell even for high quality assets such as
government bonds. "Size effects" play an important role for the Group as it is likely that a
liquidation of significant amounts of assets, even if high quality ones, would affect the overall
market conditions. Additionally possible ratings downgrades and the resulting effects on the
securities value as well as the consequent difficulty in ensuring immediate liquidity in unfavourable
economic conditions could also affect the Group's ability to meet its financial obligations as they
fall due.
Finally, it must be noted that the Group, in the management of short term liquidity, adopted metrics
that preserve its stability over a period of three months, while maintaining adequate liquidity
reserves in terms of eligible and marketable securities. As defined in the Strategic Plan, the Group
expects to achieve the objectives of compliance with the liquidity indicators that are going to be
defined by Basel III regulations (i.e. Liquidity Coverage Ratio and Net Stable Funding Ratio) by
2015. The observation period related to the application of the rules, was delayed by one year, from
2013 to 2014, subject to the entry into force of the first part of the legislation in 2015, with a
gradual phase in which will be completed in 2019 (when the Liquidity Coverage Ratio requirement
will be 100%).
(
0 %
+
6
4
!
!
3
The Group's performance is influenced by the financial markets conditions and the macroeconomic
situations of the countries in which it operates. In recent years, the global financial system has been
subject to considerable turmoil and uncertainty and, as at the date of this Prospectus, the short and
medium term outlook for the global economy remains uncertain.
The repricing of sovereign risk following the recent crisis has contributed to keep volatility and
uncertainty high, weighing negatively on the global financial system.
High uncertainty and risk aversion have led to significant distortions in global financial markets,
including critically low levels of liquidity and availability of financing (resulting in high funding
costs), historically high credit spreads, volatile capital markets and declining asset prices. In
9

addition, the international banking system has been imperilled with unprecedented issues, which
have led to sharp reductions in and, in some cases, the suspension of, interbank lending.
The businesses of many leading commercial banks, investment banks and insurance companies
have been subject to significant pressure. Some of these institutions have failed or have become
insolvent, have been integrated with other financial institutions, or have required capital injections
from governmental authorities and supranational organisations. Additional adverse effects of the
global financial crisis include the deterioration of loan portfolios, decreasing consumer confidence
towards financial institutions, high levels of unemployment and a general decline in the demand for
financial services.
Furthermore, the uncertain economic outlook in the countries in which the Group operates has had,
and could continue to have, adverse effects on its operations, financing costs, share price and the
value of its assets and has led to, and could continue to lead to, additional costs relating to
devaluations and decreases in asset value.
All of the above could be further impacted by policy measures affecting the currencies of countries
where the Group operates as well as by political instability in such countries and/or the inability of
the governments thereof to take prompt action to confront the financial crisis.
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The sovereign debt crisis has raised concerns about the long term sustainability of the European
Monetary Union. In the last years, Greece, Ireland and Portugal have requested financial aid from
European authorities and from the International Monetary Fund (the "IMF") and are currently
pursuing an ambitious programme of reforms. Cyprus has also requested financial help. In March
2012, Greece has restructured its debt after inserting retroactively the so called "Collective Action
Clauses". The decision represented a credit event and has triggered credit default swaps (%
).
While the risk of a sharp upward repricing in sovereign credit spreads has significantly
diminished after the ECB launched the "Outright Monetary Transactions" (*-(), it has not
completely faded.
Persistent market tensions might affect negatively the funding costs and economic outlook of some
euro member countries. This, together with the risk that some countries (even if not very significant
in terms of gross domestic product ("GDP")) might leave the euro area, would have a material and
negative impact on the Group and/or on the Group's clients, with negative implications for the
Group's business, results and financial position.
Lingering market tensions might affect negatively the global economy and hamper the recovery of
the euro area. Moreover, the tightening fiscal policy by some countries might weigh on households
disposable income and on corporate profits with negative implications for the Group's business,
results and financial position. This trend will likely continue in the coming quarters.
Any deterioration of the Italian economy would have a material adverse effect on the Group's
business, in light of the Group's significant exposure to the Italian economy. In addition, if any of
the countries in which the Group operates witnessed a significant deterioration in economic activity,
10