The EU bank

EU bank’s first covered bond operation in Italy

The European Investment Bank (EIB) has signed a EUR 250 million finance contract with the UBI Banca group targeting small and medium-sized Italian businesses (SMEs). The transaction technically consists of subscription by the EIB of a covered bond issued by UBI.

This is the first time that the EIB has mounted an operation in Italy via the covered bonds instrument, which was launched on the market in 2007.

This EUR 250 million funding constitutes the first tranche an already approved EUR 500 million EIB loan to UBI Banca earmarked entirely for SMEs.

SME projects mainly in the industry, services and tourism sectors will be eligible for loans of up to EUR 12.5 million.

The funds will be distributed to all members of the UBI group: Banca Popolare di Bergamo, Banca Regionale Europea, Banco di Brescia, Ubi Leasing, Banca Popolare Commercio e Industria, Banca Carime, Banca di Valle Camonica and Banco di San Giorgio.

“This operation will strengthen our relations with the UBI group, the EIB’s customary partner for financing small businesses in Italy” affirmed Dario Scannapieco, EIB Vice-President responsible for financing operations in Italy, Malta and the Western Balkans. He went on to say that “it is also important inasmuch as this is the first time that the EIB has mounted an operation in our country via the covered bonds instrument - a technical innovation that enables us to broaden the range of tools for partnering with the banking sector to finance SMEs, and one which we believe will be widely used in Italy’s credit market”.

“We are also extremely pleased to have launched this innovative operation on the Italian market with the EIB”, added UBI Banca’s CEO, Victor Massiah.  “It provides further confirmation of our Group’s focus on the small business sector – the backbone of our country’s economy”.

EIB

The European Investment Bank supports the strategic and policy objectives of the European Union by granting long-term loans for economically viable investment projects. The EIB’s shareholders are the 27 EU Member States. Italy is one of the four leading shareholders, along with the United Kingdom, Germany and France, each holding a 16.2% stake in the Bank. New EIB loans in 2009 amounted to nearly EUR 80 billion, including EUR 9.7 billion for Italy. At the end of 2009, total outstanding loans in Italy stood at more than EUR 50 billion.

EIB and SMEs

EIB loans for SMEs in Italy supported new investment by 12 500 small businesses in 2009 and by more than 31 000 over the past three years.

UBI Banca Group

The UBI Banca Group – Unione di Banche Italiane (www.ubibanca.it) – operates throughout Italy via nine network banks (Banca Popolare di Bergamo, Banco di Brescia, Banca Popolare Commercio e Industria, Banca Regionale Europea, Banca Popolare di Ancona, Banca Carime, Banca di Valle Camonica, Banco di San Giorgio and UBI Banca Private Investment), an alliance of financial promoters, and product companies specialising in the strategic areas of asset management, bancassurance (life and non-life), leasing, factoring, corporate banking and consumer credit. At 31 December 2009, the UBI Banca Group presented some of the best key figures in the Italian banking system, with a core tier 1 ratio of 7.43%, EUR 97.2 billion of direct funding, around EUR 78.8 billion of indirect funding and outstanding loans of EUR 98 billion. The Group has some 4 million customers, a network of more than 1 900 branches and around 20 000 employees.