for whatever life brings - unicreditfoundation.org€¦ · them to deal with whatever life brings....

2010 Reports and Accounts

For whatever life brings

www.unicreditanduniversities.eu

Printed on certified recycled chlorine-free paper.


Everyone knows that life can be surprising. Many of these surprises are good things.

Some are not so good. That is why people need their bank to be a reliable partner, helping

them to deal with whatever life brings.

Because this year’s report is inspired by real life, its graphics portray some of life’s more

pleasant aspects, as well as a few of its less enjoyable features. Thus, the images present a

range of contrasts, and our cover offers up a kaleidoscope of moments drawn from daily life.

That is simply how life works. From the exciting to the ordinary, from the expected

to the unanticipated, life is always changing and makes demands on all of us.

And UniCredit is here to lend a hand.

Our job is about more than offering products and managing transactions. It is about

understanding the needs of our customers as individuals, families and enterprises.

Our goal is to deliver solutions for the everyday issues that people face. This means

providing them with concrete answers - day by day, customer by customer, need by need.

3UniCredit & Universities · 2010 Reports and Accounts

Governing Bodies

UniCredit & Universities Knight of Labor Ugo Foscolo FoundationNon-profit Organization Italian Presidential Decree no. 255 of 28.3.1967(Official Gazette, no. 118 of 12 May 1967)Registered Office: Via Alessandro Specchi, 16 - 00187 Rome Business Office: Via Santa Margherita, 12 - 20121 MilanTax Code: 80024350581

Board of Directors Dieter Rampl Chairman

Anna Simioni Vice-Chairman

Marco Annunziata Directors Willibald Cernko Federico Ghizzoni Antonella Massari Theodor Weimer

Secretary General

Giannantonio De Roni

Board of Auditors Giorgio Loli Chairman

Claudia Cattani Standing Members Elisabetta Magistretti


Scientific Committee

Scientific Committee Franco Bruni Chairman

Silvia Giannini Members Tullio Jappelli Catherine Lubochinsky Giovanna Nicodano Reinhard H. Schmidt Josef Zechner

6 2010 Reports and Accounts · UniCredit & Universities

Chairman’s Letter

To become a leading European

player in support of the

best students and researchers

is and will remain our

greatest challenge.

”

“


Thanks to its ongoing commitment to support the best European talents, the UniCredit & Universities Foundation achieved excellent results in 2010, fielding more initiatives and providing more financial grants to students and researchers.

The feedback from this surge of activity was overwhelmingly positive, as reflected by the significant increase in the number and the national diversity of applicants for its competitions.

These positive trends were matched by the quality and academic value of the submissions received. This year’s winning research projects were outstanding scientific efforts that made real contributions to their fields of inquiry.

Furthermore, by the number and variety of initiatives launched during the past year, the foundation has signaled its intention to become a leading European player in support of the best students and researchers in economics and finance. Looking ahead, achieving this goal will remain our greatest ambition and our greatest challenge.

To date, we remain encouraged by the significant appreciation expressed for our work by award recipients and the communities in which we operate.

Moving rapidly to build on this support, we have proposed a new series of initiatives and built firm relationships with leading universities and research centers that, like us, aim to promote the study of economics without regard to geographical, political or cultural boundaries. In the future, these partnerships will surely create new and exciting opportunities for young European students and researchers.

At the foundation, we do not see our results as just another positive mark on our record, but rather as an incentive to work longer, harder and better. We do so with the full knowledge that to succeed in the dynamic world of academia, one must relentlessly seek out advanced initiatives and solutions to meet the needs of Europe’s finest young talent.

Finally, I would like to thank all those who enabled the UniCredit & Universities Foundation to fulfill its commitment this year and, in particular, the Board of Directors, the Board of Auditors and the Scientific Committee, whose contributions have been invaluable to our success.

Dieter Rampl

Chairman


Annual Report 11

The Foundation’s Purposes 12

Highlights 13

Management Analysis 14

Activities 18

Main Goals 30

Financial Statements 35

Balance Sheet 36

Report on Operations 37

Notes on the Accounts 38

Annexes 47

Report of the Board of Auditors 49

Contents


The Foundation’s Purposes 12

Highlights 13

Management Analysis 14

Activities 18

Support for Studies 18

Support for Research 22

Other Initiatives 27

Main Goals 30

Annual Report

12

Annual Report

2010 Reports and Accounts · UniCredit & Universities

The Foundation’s Purposes

1TO PROMOTE studies and initiatives designed to deepen knowledge in the academic fields of finance, economics, law, politics and the social sciences.

TO ESTABLISH awards for dissertations or for special academic work in the academic fields of finance, economics, law, politicsand the social sciences.

TO AWARD, annually, oneor more scholarships.

TO PROPOSE and SUPPORTacademic initiatives.

On the basis of Article 2 of the foundation’s statute, the UniCredit & Universities Foundation does not pursue profit and operates with the following purposes:

3

2

4


Highlights

During 2010, the foundation launched 12 initiatives (7 in 2009)

that yielded 34 awards (8 in 2009).

Expenditures related to the launch of all 2010 initiatives

amounted to €1.02 million (€0.66 mln in 2009).

Expenditures can be broken down as follows:

• initiatives in support of studies: 64%

• initiatives in support of research: 33%

• other initiatives: 3%

Expenses for ordinary operations amounted to a total of €1.65

million (€0.85 mln in 2009).

As of the date on which the financial statements were

approved, the network of foundation scholarship students

included a total of 25 students and researchers.

In 2010, the foundation received 522 applications. Since the

start of its operations in January 2009, the foundation has

received 800 applications.

2009 2010

Number of applications received(Unit)

278

522

+88%

2009 2010

Investment in new initiatives(€ million)

0.66

1.02 +55%

2009 2010

Expenses for ordinary operations(€ million)

0.85

1.65

+94%

2009 2010

Number of initiatives(Unit)

7

12

+71%

2009 2010

Number of award recipients(Unit)

8

34

+325%

Breakdown of expenditures

for new initiatives in 2010 (%)

Initiatives in support of research

Other initiatives

Initiatives in support of studies

64

33

3

14

Annual Report


2010: THE FIRST FULL YEAR OF OPERATION

FOR THE FOUNDATION

Six of the 12 initiatives launched this past year are new. These

arose both from existing initiatives, which have subsequently been

refined, and from entirely new projects.

In addition to the introduction of a range of new initiatives, an

important part of the activities performed during the year by the

foundation concerned the creation of a large and sturdy network

of international relationships.

This network is essential to efforts to:

1. reach the best European talent worldwide;

2. start collaborations with the best universities, with the aim of

developing effective new initiatives.

Networking activities included the organization of meetings with

major European universities located both within and outside the

geographic scope of UniCredit’s operations. Within this scope, the

foundation worked to build relationships with:

Management Analysis

In 2010, the foundation’s primary objective was to support the

best European talent in the fields of economics and finance.

This goal was pursued through an increasingly broad and

well-structured range of initiatives.

The most striking aspect of the foundation’s activities was their

European character. Through its support for study and research,

the foundation fully reflects the impressive geographic and cultural

diversity of UniCredit, which fully funds and, through its values,

also inspires the foundation’s daily work. The European scope of

the foundation’s work has been essential to its ability to achieve

its results, which would not have been possible had it remained

focused exclusively on Italy.

The foundation is further distinguished by its intense focus on

innovation, particularly in regard to new initiatives. It believes that

innovation is central to achieving its objectives without burdening

itself with preexisting activities, particularly since the academic

environment is evolving with increasing speed and complexity.

All the winners of 2010 initiatives, with Dieter Rampl (Chairman of the Board of Directors of the UniCredit & Universities Foundation), Franco Bruni (Chairman of the Scientific Committee of UniCredit & Universities Foundation), Giannantonio De Roni and Annalisa Aleati (General Secretary and Scientific Responsible of UniCredit & Universities Foundation).


1. Corvinus University of Budapest;

2. Koç University of Istanbul;

3. Graduate School of Management of St. Petersburg;

4. School of Economics of Warsaw;

5. Warsaw University.

Outside of UniCredit’s geographical scope, collaboration

agreements were signed with some of the most important

European economics schools:

1. Barcelona Graduate School of Economics - University of Pompeu

Fabra;

2. London School of Economics and Political Science;

3. Stockholm School of Economics;

4. Toulouse School of Economics.

These schools were chosen with a view to guaranteeing the

foundation’s ability to provide support to the very best students

from the countries in which UniCredit operates, at the universities

where they most often choose to continue their studies.

This network was developed principally through a series of

meetings that involved both the heads of the departments

of economics and finance and the students themselves.

This format enabled department heads to acquire first-hand

knowledge of the foundation’s work and receive answers to

their questions.

In 2010, the foundation also extended the thematic scope of its

activities, introducing new initiatives in support not only of doctoral

programs, but also of master’s programs and economic research.

This extension was entirely in line with the foundation’s mission

to support the very best talent in Europe, whether students or

young researchers. This past year, the foundation was pleased to

discover that such talent is not exclusively concentrated among

graduates pursuing doctorates, and that equally talented individuals

may be identified among those students who, after attaining an

undergraduate degree, choose to pursue a master’s degree.

The Scientific Committee played an important role in 2010,

providing the Board of Directors with a series of suggestions

designed to assure the foundation’s ability to achieve its objectives

efficiently.

In turn, the Board of Directors carefully appraised these

suggestions and approved initiatives that, in some cases, were

extremely innovative and had the potential to support areas of

study and research that would simply not have been considered

had more traditional methods been proposed.

16

Annual Report


Particular attention was also paid to students and researchers from

Central and Eastern Europe. Specific initiatives targeting this group

secured an unexpectedly high number of participants.

Overall, the foundation achieved a better geographical balance

with respect to participation in its initiatives. In the previous year,

participation was relatively unrepresentative of UniCredit’s actual

geographical reach.

It must be stressed that participation in the foundation’s initiatives

by students and researchers from countries of Central and

Eastern Europe was distinguished not only by the high number of

participants but also by the high quality of the scientific research

presented.

In 2010, the foundation also worked to develop opportunities in

which the knowledge acquired by the winners of scholarships

and fellowships could be shared with the Italian academic world.

To this end, the foundation arranged for the winners of the

Crivelli Fellowships to hold seminars as part of degree courses in

economics at Trieste University (which receives the foundation’s

financial support), and to participate in certain activities during

UniCredit events.

The work of UniCredit & Universities was conducted within the

particularly challenging context of this past year. Probably due

to the still-uncertain economic situation, a reduced number

of students sought to enroll in doctoral or master programs

abroad, thus leading to a corresponding decline in the number of

applications for scholarships.

This phenomenon can be explained in several ways, not least by

the uncertainties that most young graduates face, which may push

them toward a rapid entry into the working world, rather than a

prolonged period of study.

This situation has affected all major countries similarly and, in

many cases, has gone hand-in-hand with a reduction of public and

private funding for study and research.

In this context, the foundation chose to move in a careful manner

against the tide, increasing the number of initiatives and the

financial commitment made in support of its activities.

Great attention was also paid to the foundation’s efficiency, with the

awareness that only by limiting administrative costs could the

intentions of UniCredit be properly fulfilled.

The ratio of administrative costs and total expenses has thus

dropped to 8.8% from the 13% recorded for 2009, thanks both

to a focus on the cost side and an increase in assets allocated to

initiatives.

Main Achievements

In 2010, the UniCredit & Universities Foundation achieved excellent

results both in terms of quantity and quality. In figures, the foundation

has almost doubled the number of initiatives it fielded in 2009, from

seven to 12, yielding a total of 34 winners, up from eight in 2009.

Investment in 2010 initiatives amounted to

€1.02 million (up from €660,000 in 2009).

A breakdown of foundation activities into three

main areas reveals that funds allocated to

supporting studies represented 64% of total

assets, funds allocated to supporting research represented 33%, and

the remaining 3% was allocated to other initiatives.

When assessing the success of the foundation’s activities, the

verified academic results achieved by our scholars must also be

considered. All contests relating to scholarships and fellowships

include regular monitoring of the winners’ subsequent

studies by assigned tutors. The renewal of grants (annual for

scholarships and biannual for fellowships) is always subject to

the achievement of positive evaluations.

In 2010, in line with the positive recommendations of all tutors,

the foundation renewed all of the grants that were due to expire.

This result confirms the high quality of all contest winners and

the seriousness with which they are pursuing their goals and

commitments with the foundation.

Management Analysis (CONTINUED)

2009 2010

General administrative costs over total expenses (%)

13

9


www.unicreditanduniversities.eu Disclosure and Engagement Tools

From the beginning, the foundation was committed to creating a web-based operating model and avoiding most

hard-copy documents.

This was a choice dictated by the need to:

1. act efficiently and quickly both during the launch of initiatives and during application and review processes;

2. limit costs for both the foundation and the applying students and researchers;

3. maintain the same intensity of communication in all countries worldwide, as the foundation’s decision to operate

internationally meant that it had to reach students and researchers from all five continents.

To this end, the foundation has its own website, which is progressively becoming its main

operating platform.

Through the website, the foundation:

1. launches all initiatives;

2. manages all applications, as students and researchers electronically submit all required

application materials;

3. enables members of the Scientific Committee to review the applications;

4. keeps the community that has been created around the website constantly informed on all future initiatives and

events that will be taking place during the year;

5. provides full disclosure of its operations, including the members of its corporate bodies and of the Scientific

Committee, financial statements and more detailed information.

The choice to work primarily via the internet has naturally required supplementing the foundation’s website with

complementary tools, including a Facebook profile and a Twitter page. Thanks to its use of these two social networks,

the foundation has further improved its efficiency, above all during the launch phase of new initiatives.

As the foundation’s website is core to all activities, analysis of its usage patterns has provided key

insights into the dynamics of UniCredit & Universities. In 2010, the number of visitors to the website

almost tripled, to 32,063, up from 10,056 in 2009, with 22,744 new visitors, up from 7,106 in

2009. It recorded 142,468 page views during the year, up from 51,700 in 2009. The changes in the

site’s traffic sources are also significant, as the share of referring websites remains high at 55.7%,

up from 51.4% in 2009, while the share of direct traffic has increased significantly, to 23%, up from 14.3% in 2009.

The website’s usage patterns further confirms the progress that has been made

in terms of the internationalization of the foundation. In 2010, visitors from Italy

comprised only 60% of all traffic, down from 70% in 2009. The second-largest source

of visitors to the foundation’s website has become Germany, with almost 4% of all traffic, followed by Serbia, the

United States and the United Kingdom.

Moreover, in 2010 visitors to the website came from 125 different countries, up from 91 in 2009. The share of

European visitors dropped slightly, to 91.7%, down from 92.7% in 2009. The share of American visitors also

dropped from 5.6% to 3.3%, while the share of visitors from Asia is up from 1.5% to 2.4%. This latter figure is

almost exclusively due to the increase in visitors from Turkey.


Facebook:/UniCredit-Universitiestwitter.com/UniCredit_Univ

18

Annual Report


Activities

1. INITIATIVES

IN SUPPORT OF STUDIES

The Crivelli Europe Scholarships

The Crivelli Scholarships are for students who are studying economics,

banking and/or finance and wish to pursue a doctorate abroad. Starting

in 2010, the scholarships focus on students from any of the 22

countries1 in which UniCredit operates. To underline the new European

scope of this initiative, it has been renamed the “Crivelli Europe

Scholarships.”

This is an initiative that is managed in the best tradition of the Crivelli

Scholarships, which were created in 2002 by UniCredito Italiano. It also

incorporates the positive lessons learned from the 2009 launch of the

Foscolo Europe Scholarship, which enabled the foundation to verify the

existence and scope of the international market for such initiatives as

scholarships.

Consequently, the foundation created a contest to

assign three scholarships - at least one of which must

always go to a female applicant - that is open to all

students from the European countries in which

UniCredit operates.

1. List of the 22 countries that comprise the geographical scope of UniCredit: Austria, Azerbaijan, Bosnia and Herzegovina, Bulgaria, Croatia, the Czech Republic, Estonia, Germany, Hungary, Italy, Latvia, Lithuania, Kazakhstan, Kyrgyzstan, Poland, Romania, Russia, Serbia, Slovakia, Slovenia, Turkey and Ukraine.

THE FOUNDATION’S ACTIVITIES ARE CLASSIFIED

WITHIN THREE MAJOR CATEGORIES:

1. support for studies 3. other initiatives

2. support for research

2

2

1

1

3

3

10

4

5

7

8

9

6

1. Crivelli Fellowship, 22nd milio Calvano, from Harvard to Bocconi, Milanned. - Emilio Calvan Harvar 2. Foscolo Europe Fellowshipwship, 1st ed. - Emiliano Santoro, from Copenhagenhagged. - Emil enrom Coorot

University to Catholic University of Milan.ersity of Milanan. 3. Foscolo Europe Fellowship, 2nd onin, from Southampton University (UK)ned. - MircoMMirco Tonin rom South to Central European University of Budapest.t.t 4. Crivelli Scholarship, 6th ed. - Giulia La Mattina, Bostoa, Boston University.

5. Crivelli Scholarship, 6th ed. - MMarco Di Maggio, MIT. 6. Crivelli Scholarship, 7th ed. - GGiorgia Piacentino, London School of Economics. 7. Crivelli Scholarship, 777thh ed. - R Roberto Robatto, University of Chicago. 8. Crivelli Scholarship, 8th ed. - MiMichela Giorcelli, Stanford University. 9. Crivelli Scholarship, 8th ed. - Stefano Mos Universi of ChiStefano Mosso, University of Chicago.10. Foscolo Europe Scholarship 1st ed. -d. - Audinga Baltrunaite, Stockholm University.t

SCHOLARS’ MAP


In this way, the foundation aims to underline its commitment to

a European scope, by offering identical opportunities to the best

graduates from any of the 22 countries.

The size of the scholarship awards, which include the full payment

of university fees and an annual stipend of €25,000 to cover the

cost of living and related travel, has not been changed.

In 2010, 77 students of 10 different

nationalities applied to the ninth edition

of the Crivelli Europe Scholarship. Given

that 39 students applied for the same

scholarship in 2009, this 97% increase in

the number of applicants was significant.

Moreover, it is important to note that this impressive result was

recorded despite the overall decline in the number of students

applying for scholarships in general in 2010.

The recipients of the ninth edition of the Crivelli Europe Scholarship

were Enrico Cantoni, Ludovica Gazzè and Alessandro

Vecchiato, who have chosen to enroll in doctoral programs in the

United States.

The Leopold Gratz Scholarship

Named in honor of a former mayor of Vienna, in

2010 the second edition of this contest targeted

top students either with a degree in economics

or finance from any Austrian university or looking

to enroll in a master’s or doctoral program at an

Austrian university.

Award recipients will be granted €25,000 for the academic year

2011-2012.

The scholarship is directly and fully funded by Bank Austria’s

Leopold Gratz Foundation. The UniCredit & Universities

Foundation supports this initiative by providing its expertise in

the assessment of applicants. Professor Josef Zechner, who is

a member of the UniCredit & Universities Scientific Committee,

worked with the Leopold Gratz Foundation to screen applicants

this past year. He is a Full Professor of Finance at the University

of Vienna and director of the doctoral program of the Vienna

Graduate School of Finance (VGSF).

The first edition of the Leopold Gratz Scholarship competition

ended on March 31, 2010. The award recipient, Manuel Mayer,

was recognized in Vienna on May 14, 2010. Organized by the

Gratz Foundation at the offices of Bank Austria in Vienna, the

official ceremony was attended by staff representatives and the

members of the UniCredit & Universities Scientific Committee.

UniCredit & Universities’ support for this initiative demonstrates

the degree to which the foundation focuses on local initiatives

within the geographical scope of UniCredit. The foundation

believes that these local initiatives maintain vital traditions and

highlight the close ties that bind Group entities to their local

communities.

The Masterscholarships project To complete the foundation’s range of initiatives in support of

the studies of top European students in 2010, the UniCredit &

Universities Foundation considered it important to support students

who, after graduation, decided to pursue a master’s degree, i.e.,

an interim specialization course between a bachelor’s and a doctoral

degree.

This is a new area for the foundation.

Up until the previous year, support to young

graduates had only been provided to those who

chose to pursue a doctorate abroad for at least

two years.

Thus, with a view to defining the Masterscholarships project,

UniCredit & Universities held a series of meetings in 2010 with four

of the most prestigious schools of economics in Europe:

• Barcelona Graduate School of Economics - University Pompeu Fabra;

• London School of Economics and Political Science;

• Stockholm School of Economics;

• Toulouse School of Economics.

All four schools showed great interest in the project and have played

an active part in defining its content.

From left to right: Giannantonio De Roni, Secretary General of the UniCredit & Universities Foundation; Josef Zechner, member of the Scientific Committee of the UniCredit & Universities Foundation; Manuel Mayer, winner of the 2009 Leopold Gratz Scholarship; Doris Tomanek, representing Bank Austria; Annalisa Aleati, Scientific Responsible of the UniCredit & Universities Foundation, during the prize ceremony of the first edition of the Leopold Gratz Scholarship.

1scholarship

4

scholarships

20

Annual Report


Through the Masterscholarships contest, the foundation offers four

scholarships to top students who wish to enroll in a master’s degree

program in economics or finance for the academic year 2011-12 at

one of the above four schools. The contest is open to all students

from the European countries in which UniCredit operates.

The scholarship covers all university fees plus a monthly stipend to

cover the living costs for the entire duration of study.

The foundation has made agreements regarding this scholarship

directly with the four schools identified above, with provisions for

the candidate screening process to take place in two stages. First,

the school provides the foundation with a short list of candidates,

which is prepared in line with each school’s own strict parameters

for participation in their master’s programs. The foundation then

examines this list and consults with an appointed scientific advisor

before choosing the best candidate.

For the first edition of the Masterscholarships, the Board of Directors

of UniCredit & Universities, after receiving a recommendation from

the Scientific Committee, appointed Professor Michele Polo as

this initiative’s scientific advisor. He is the pro-rector of Bocconi

University of Milan and was a longstanding member of the former

Crivelli Commission. The first edition of the initiative was launched in

December 2010.

Unlike the Crivelli Europe Scholarship, candidates for the

Masterscholarships apply online at the websites of their respective

universities or master’s programs. The recipients of the four

scholarships, whose names will be published by the end of April

2011, will begin their master’s courses in the fall of 2011.

The LUISS School of Government Scholarships

In 2010, the UniCredit & Universities Foundation

decided to offer six scholarships for two master’s

programs organized by the LUISS School of

Government. LUISS aims to train the future

leaders of legislative, administrative, government,

private, research and civil society institutions, both on a national and

international level. The foundation allocated three scholarships to

students seeking a Master’s in European Studies and another three

to students seeking a Master’s in International Public Affairs.

The contest for the six scholarships was opened to top graduates

from all 22 countries in which UniCredit operates.

The scholarships cover the full cost of enrollment, university fees and

housing.

These programs, which began in September 2010 and will end

Activities (CONTINUED)

CEE Best PhD Thesis Award

1 Dermendzhieva Zvezda (Bulgaria)2 Horn Daniel (Hungary)3 Saxa Branislav (Slovakia)4 Elgin Ceyhun (Turkey)5 Rashkova Ekaterina (Bulgaria)6 Fazekas Dora (Hungary)

LUISS School of Government - Rome

Master’s in International Public Affairs7 Ekaterina Burdina (Russia)8 Aynura Ismaylova (Azerbaijan)9 Eleonora Mura (Italy)

Master’s in European Studies10 Dorina Damsa (Romania)11 Petra Tisocki (Hungary)12 Sahizer Samuk (Turkey)

10

8

7

9124

61111

2

51

1113

6

scholarships


in June 2011, are held at the LUISS School of Government’s

headquarters in Rome and are entirely taught in English.

The scholarship recipients come from six different UniCredit

countries.

For the Master’s in European Studies, the winners are:

• Dorina Damsa, from Romania;

• Petra Tisocki, from Hungary;

• Sahizer Samuk, from Turkey.

For the Master’s in International Public Affairs, the winners are:

• Eleonora Mura, from Italy;

• Aynura Ismaylova, from Azerbaijan;

• Ekaterina Burdina, from Russia.

By financing these six scholarships, the foundation confirms its

commitment to supporting top talent from all UniCredit countries.

In particular, the foundation believes it is vital to support the training

of those who will inherit the levers of governance and on whose

preparation the prosperity and future of their communities will

depend.

The CARIM Summer School Scholarships

In addition to scholarship contests for master’s

or doctoral students, in 2010 the foundation

also funded four scholarships for the CARIM

Summer School on Euro-Mediterranean

Migration and Development (European University

Institute, Robert Schuman Centre for Advanced Studies).

The scholarships, which are open to graduates from all UniCredit

countries, were given to four young female students:

• Alina Cibea, from Romania;

• Natasha Yaneva, from Bulgaria;

• Semiha Bekir, from Bulgaria;

• Valentina Mutti, from Italy.

Opening of the CARIM Summer School The following directors are present: Rainer Bauboch, European University Institute; Peter Bosch, Brussels European Commission; Philippe Fargues, Director of CARIM, and Giannantonio De Roni, General Secretary of the UniCredit & Universities Foundation.

4

scholarships

22

Annual Report


THE SIX CONTEST WINNERS ARE

2. INITIATIVES IN SUPPORT

OF RESEARCH

The Foscolo Europe Fellowship

Fellowships are grants provided to the best

young European researchers who have received

a doctorate in economics at universities abroad

and wish to return to a European university to

continue their research. With the Foscolo Europe

Fellowship, UniCredit & Universities finances a two-year research

period, renewable for a further two years, with an annual contribution

of €60,000 paid directly to the fellowship recipient.

Since 2009, the Foscolo Europe Fellowship has targeted researchers

from the European countries in which UniCredit operates. The second

edition of this fellowship, launched in 2010, was won by Mirco Tonin,

an Italian researcher currently at Southampton University. Thanks

to UniCredit & Universities, he will move to the Central European

University of Budapest in the fall of 2011.

The Post-Doc Research Grant

In addition to its European initiatives for students and researchers,

the foundation has also decided to develop projects that are more

locally focused, with a view to providing concrete

support to well-defined categories of top students

or researchers, as necessary.

Therefore, the first edition of the Post-Doc Research Grant was

launched in July 2010 to support the three best research projects in

economics and finance presented by young researchers working at

Italian universities.

The grant recipients, selected at the end of 2010 by the Scientific

Committee of UniCredit & Universities after all candidates were

personally interviewed, are as follows (in alphabetical order):

1. Andrea Colciago from the University of Milan-Bicocca, with a

research project entitled: “Endogenous Market Structures and Labor

Market Dynamics”;

2. Francesco Drago from the Parthenope University of Naples, with

a research project entitled: “Belief Formation, Crime and Economic

Shocks”;

3. Salvatore Piccolo from the Federico II University of Naples,

with a research project entitled: “Corporate Control and Banking

Competition under Non-exclusive Lending”.

The three researchers will each receive an annual grant of €10,000

to finish their projects over a two-year period. They will present their

results to UniCredit’s top management.

The aim of this first edition was to further examine this type of initiative.

Thus, while the scope was limited to Italy, the foundation aspires to

extend this program to other countries with support needs that are

structurally similar to those of Italy.

The CEE Best PhD Thesis Award

While the Post-Doc Research Grant focuses exclusively

on Italian researchers, the first edition of the CEE

Best PhD Thesis Award was launched in 2010 with

a view to rewarding the best papers of economists

and researchers from those Central and Eastern

European countries in which UniCredit operates.2

For this contest, UniCredit & Universities selected the six best theses

in economics, finance, political science and social science written on

subjects concerning European integration. More specifically, two

prizes were awarded to theses on subjects focused on migration, two

prizes to subjects on economic development and demography, and a

further two prizes on unrestricted topics.

The six best theses will each receive €5,000 and will be published in the

Working Papers series of the foundation. Thirty-five applicants from 15

different countries were admitted to the final round of evaluations.


2. See note 1: Italy, Austria and Germany are excluded.

UNRESTRICED

1. Rashkova Ekaterina (Bulgaria)

2. Fazekas Dora (Hungary)

nnaaan

ECONOMIC DEVELOPMENT1. Saxa Branislav

(Slovakia)

2. Elgin Ceyhun (Turkey)

MIGRATION

1. Dermendzhieva Zvezda (Bulgaria)

2. Horn Daniel (Hungary)

1 fellowship

3 grants

6 prizes


The UniCredit Best Paper Award

Unlike any other initiative described thus far, the

UniCredit Best Paper Award - now in its second

edition - focuses only on researchers employed by

UniCredit, at any bank or legal entity of the Group.

With the UniCredit Best Paper Award, the three best papers in the

fields of economics, finance, law and social sciences are awarded

€5,000 each. Winning papers are selected also based upon the

interest of their contents to the Group.

Compared to the 53 applications received in 2009, the foundation

received 87 applications in 2010. While many submissions were

received from Turkey, Romania and Poland, the participation of

German, Russian and Bulgarian colleagues was also significant,

as well of Italian colleagues. Much like last year, the Scientific

Committee appreciated the high quality the papers presented.

At the end of the appraisals process, three works prevailed.

The prize was awarded to (in alphabetical order):

1. Grzegorz Halaj, from Poland;

2. Jan Maruhn and Max Mair, from Germany;

3. Alexander Schätz, from Germany.

The Scientific Committee also awarded special mention to

the following applicants, whose papers were considered to be

particularly interesting:

1. Piotr Kazmierkiewicz from Poland;

2. Bülent Tekçe from Turkey;

3. Daniele Ruspantini and Alessandra Sordi from Italy.

26

1010

8

8

19

19

Nationality of participants in the

UniCredit Best Paper Award contest (%)

29 43

86

14

Italy

Italy

Poland

2009 2010

Turkey

Croatia

Romania

Bulgaria

Other

Other

Germany

Ucraina

Russia

The UWIN Best Paper Award

The UniCredit & Universities Foundation, in cooperation

with the UniCredit Women’s International Network

(UWIN), in 2010 launched the first edition of the UWIN

Best Paper Award.

The contest, open to all young economists and researchers of the 22

countries in which UniCredit operates, aims to reward research focused

on the study of the female condition in Europe, with particular

reference to economic development and labor market topics. Awards

will be presented to the three best papers on the topic of: “Economic

consequences of gender equality in Europe.”

Thanks to the support of UWIN, which has donated €12,500 to the

foundation, the three best submissions will each receive a prize of

€5,000 and will be published in the Working Papers series of the

foundation.

The contest, although included and approved in the foundation’s 2010

activity plan, will end in May 2011. The names of the winners will be

published by mid-July 2011.

The selection process will be handled by a commission of international

experts appointed by the Board of Directors on December 14, 2010,

upon the recommendations of the Foundation’s Scientific Committee.

The members of the commission are:

1. Dr. Matthias Doepke of Northwestern University - Illinois, USA;

2. Prof. Paola Profeta of Bocconi University of Milan;

3. Dr. Barbara Petrongolo of the London School of Economics and

Political Science.

The UNIEAST Research GrantThis is the first edition of this initiative, promoted

in cooperation with Turin University and open to

the best researchers from three Central and Eastern

European countries: Poland, Russia and Turkey. The

project aims not only to consolidate the relationship between UniCredit

and the Piedmont territory but also to confirm the Group’s commitment to

supporting specialized training for the best researchers from Central and

Eastern Europe.

The UNIEAST Research Grant provides three prizes - one for each

selected researcher from the three countries - for a research project

in economics, finance, law, political science or social science, to be

conducted at Turin University within one semester, starting in September

2011.

The winners will be named in June 2011 and will each receive a grant of

€11,500 to cover all travel and housing costs in Italy. UniCredit will also

donate €20,000 in support of this initiative.

3 prizes

3 grants

3 prizes

24

Annual Report



RESEARCH: Foundation Researchers

and Research Projects Underway

Thanks to the initiatives underway, the foundation can presently boast a significant number of researchers,

actively engaged in research thanks to the funding that has been made available to them.

As of December 31, 2010, the UniCredit & Universities Foundation had funded five researchers: Emilio Calvano,

winner of the second Crivelli Fellowship; Emiliano Santoro, winner of the first edition of Foscolo Europe; and

Andrea Colciago, Francesco Drago and Salvatore Piccolo, winners of the first edition of the UniCredit Post-Doc

Research Grant contest. In addition to these, we will shortly be working with the new winner of the second edition

of the Foscolo Europe Fellowship, Mirco Tonin.

These are young economists and researchers who are building a future in the academic world by developing

high-profile research on themes that are often at the cutting edge, whose implications for the economic system

as a whole, and the banking system in particular, may prove to be extremely important.

The following is a brief profile of our researchers and a brief description of the subjects they are exploring.

o,

EMILIO CALVANO Winner of the Second Edition of the Crivelli Fellowship

Emilio Calvano, a young researcher in the field of economics, graduated in Political Economics from Bocconi

with full marks and distinction in 2003.

He holds a PhD from Toulouse University in France. In 2007, he moved to the United States where he

conducted research and taught at Harvard University as Professor Susan Athey’s research assistant. He also

taught in Sweden as Professor Mike Burkart’s research assistant at the Stockholm School of Economics.

Emilio Calvano is an applied theoretical economist whose research mainly focuses on the theory of industrial

organization. His research interests also include the economics of organization, regulatory policy and

competition, and market design.

His current research principally focuses on online advertising markets and in particular on the relationship

between the newer, online information channels and the profitability of older, “off-line” business models. The

intent is to identify the determinants of reduced total revenues in the information industry, which occurred in

tandem with the shift in consumption towards electronic formats.

6 researchers

Relationship between

new, online information

channels and the

profitability of old,

off-line business

models

”

“


EMILIANO SANTORO

Winner of the First Edition of the Foscolo Europe Fellowship

Emiliano Santoro holds a PhD in Economics from Cambridge University . Since September 2008, has been an

Assistant Professor of Economics at Copenhagen University and has also engaged in research as a visiting

researcher at the Pompeu Fabra University of Barcelona.

Since the fall of 2010, thanks to the Foscolo Europe fellowship, Santoro has returned to Italy to conduct his

research at the Catholic University of Milan.

He specializes in monetary economics and the macroeconomics. Within these fields, he is developing his

own research project that focuses primarily on the development of dynamic stochastic general equilibrium

(DSGE) models for the theoretical and empirical analysis of the inter-connection between the banking sector

and the macroeconomy. Additionally, intends to develop a general equilibrium framework for the assessment of

the asymmetric effects of monetary policy on output and inflation.

ANDREA COLCIAGO

Winner of the First Edition of the Post-Doc Research Grant

Andrea Colciago is a Assistant professor in the Department of Political Economics at the University of Milano

Bicocca, where in 2007 he got his Ph.D. in Economics. After his studies, Colciago worked as Economist in

the Research Department of the Bank of Italy. In the last two years, he has worked as a visiting researcher

at the central banks of Finland and Hungary. His work primarily focuses on macroeconomics and dynamic

stochastic general equilibrium (DSGE) models. His post-doctoral research will be devoted to this academic

area.

Colciago will set up a DSGE model with endogenous firms’ entry to study the interaction between the goods’

market structure and the labor market. This will allow to address some recent empirical evidence concerning

the relationship between the dynamic of the number of producers and the flows in-and-out of employment.

Moreover, he will use the model to evaluate the effects of Fiscal and Monetary policy intervention on both

unemployment and business creation.

MIRCO TONIN Winner of the Second Edition of the Foscolo Europe Fellowship

Mirco Tonin is currently lecturer in Economics at Southampton University in Great Britain. He graduated from

Bocconi University of Milan and completed a Ph.D. in Economics at the Institute for International Economic

Studies of Stockholm University.

Thanks to the fellowship offered by the foundation, Tonin will be able to pursue his academic studies and

research at another prestigious European university, Central European University of Budapest. His work has

thus far mainly focused on the labor market. Tonin has already published several papers in international

journals on subjects relating to Labor Economics, often incorporating experimental and behavioral analyses.

At Central European University, thanks to the foundation’s fellowship, Tonin will be able to pursue his project

on relationships between social behavior and employment. He will take an in-depth look at problems linked to

discrimination and benefit from the collaboration of international experts on these subjects.

How labor market

dynamics are affected

by the creation

and destruction of

enterprises

Analysis of

relationships between

social behavior and

employment

The development of

dynamic models of

general economic

equilibrium for

theoretical and

empirical analysis

of links between the

banking sector and the

macroeconomy

”

“

”

“

”

““

26

Annual Report



FRANCESCO DRAGO


Since graduating with a doctorate in Economics from the University of Siena in 2006, Francesco Drago

has been a lecturer at the Parthenope University of Naples. He has been Visiting researchers abroad,

both in Europe - at University College London and the University of Munich - and in the United States

- at Columbia University, the University of California, Berkeley, and the Santa Fe Institute. His research

interests primarily focus on applied microeconomics and behavioral economics, economics and

crime and social interactions.

The research grant awarded by UniCredit & Universities will allow Drago to pursue in greater depth his

studies on interrelations between beliefs formation, crime and economic shocks. During this period, he will

spend time at Harvard University to collaborate with expert colleagues in the field.

SALVATORE PICCOLO


Salvatore Piccolo earned his master’s at the Toulouse School of Economics and, in 2006, a doctorate

from Northwestern University in Illinois. Since 2007, Salvatore Piccolo has been a lecturer at the

economics department of Federico II University of Naples. His research interests focus on industrial

organization and the benefits theory, particularly with regard to regulation and matters relating to

banking systems and corporate finance.

Piccolo’s research project will focus on these core interests, thanks to the support of the foundation.

His topic is extremely current, and he intends to analyze how banks’ relations with customers are

affected by the compensation systems of top bank managers and information exchange agreements

between banks (with a focus on the exclusive loans/multi-bank system), within a context of moral

hazard problems.

RESEARCHERS RESEARCH PROJECTS

Emilio Calvano: winner of the second edition of the Crivelli Fellowship

Relationship between new (online) information channels and the profitability of old (off-line) business models

Emiliano Santoro: winner of the first edition of the Foscolo Europe Fellowship

Development of dynamic models of general economic balance for theoretical and empirical analysis of links between the banking sector and the macroeconomy

Mirco Tonin: winner of the second edition of the Foscolo Europe Fellowship Analysis of relationships between social behavior and employment

Andrea Colciago: winner of the first edition of the Post-Doc Research Grant

The implications for the dynamics of the employment market of the creation and destruction of enterprises

Francesco Drago: winner of the first edition of the Post-Doc Research Grant

The analysis of existing interrelations between belief formation, criminality and economic shocks

Salvatore Piccolo: winner of the first edition of the Post-Doc Research Grant

The implications that the compensation systems of top bank managers and information exchange agreements between banks may have for relations with customers within a context of moral hazard problems

OUR RESEARCHERS AND PROJECTS UNDERWAY

P

H

a

b

h

Interrelations

between belief

formation,

criminality and

economic shocks

How banks’ relations with

customers are affected by the

compensation systems of top

bank managers and information

exchange agreements between

banks within a context of moral

hazard problems

”

“

”

“


3. OTHER INITIATIVES

Funding of Two Bachelor’s Degrees in Economics at the University of Trieste

In 2010, UniCredit & Universities also confirmed its collaboration with

the Faculty of Economics of the University of Trieste, co-funding two

three-year degree programs entirely taught in English: “The Economics

and Management of Innovation” and “The Economics of Financial and

Insurance Markets.”

Both degree programs are open to Italian and non-Italian

students, particularly individuals from the CEE. Collaboration

includes a financial contribution by the foundation to the university

to manage the two courses, as well as the active involvement of

UniCredit & Universities scholars in seminar activities included

in the degree courses. With this initiative, the foundation seeks

to stress its commitment to supporting high-quality instruction

for all students - in every country in which UniCredit operates.

This collaboration with the University of Trieste also speaks to

the foundation’s ability to bridge the divide between old and new

Europe.

The Working Paper Series

The Working Paper Series was launched in 2010 with the aim of

collecting the scientific contributions of all students and researchers

who have received the foundation’s support. This includes both

employees and others unaffiliated with UniCredit, and encourages

a broad circulation of work both within and outside the bank, with

a view to encouraging comments, discussions and suggestions.

Research may focus on subjects relating to the various fields in

which the foundation operates, namely economics, finance, law, and

political and social science. The articles, which are published on the

foundation’s website, are reviewed and selected by the Scientific

Committee on the basis of criteria that assesses techniques used and

the level of the contribution made to the scientific debate.

The first working papers are already online. They were selected

through the first edition of the UniCredit Best Paper Award contest,

which ended in March 2010. In addition to these works, there is a

contribution by Manuel Mayer, winner of the first edition of the Leopold

Gratz Scholarship.

These contributions will soon be augmented by the new works selected

for the second edition of the award, as well as the first edition of the

CEE Best PhD Thesis Award.

As of December 31, 2010, the following works were published in the

Working Paper Series section of the website:

No. 10 - Forward Bias Trading in Emerging Markets - Manuel Mayer

No. 9 - Combining VAR Forecast Densities Using Fast Fourier Transform

- Jakub Rysanek

No. 8 - Modeling of Extremes Application on Electricity Day-ahead Spot

Prices Time Series - Igor Paholok

No. 7 - From Minority Game to Black and Scholes Pricing - Matteo Ortisi

No. 6 - Evidence on the Liquidity Effect in Euro Area Gov. Bond

Markets. A Bayesian VAR Analysis - Stephan Maier

No. 5 - Measuring Prepayment Risk: An Application to UniCredit Family

Financing - Matteo Consalvi, Giovanni Scotto di Freca

No. 4 - A Practitioner Approach to Forecasting Cross- section and

Aggregated Outcomes - Andrea Brasili

No. 3 - The Italian Financial Development and the Regional Impact on

Growth - Elena D’Alfonso

No. 2 - Corporate Growth: The Role of Financial Structure - Silvia

Giannangeli

No. 1 - Pricing Distressed CDOs with Base Correlation and Stochastic

Recovery - Martin Krekel

Luciano Mauro, professor of economics at the University ofTrieste, being interviewed by Andrea Cabrini during the prizeceremony of June 14, 2010.

28

Annual Report


The Awards Ceremony

The 2010 awards ceremony represented an important moment

for the foundation by offering:

1. an opportunity for the foundation chairman, the Board of

Directors, the Scientific Committee and the Board of Auditors

to meet the winners of the previous year’s contests;

2. the possibility of bringing together some of the foundation’s

most important stakeholders, including managers of the

departments in which winners will be working, managers of

other university initiatives supported during the year and the

media;

3. an opportunity to summarize the foundation’s activities and

unveil its new objectives.

The ceremony was held on June 14, 2010, in Milan, in

UniCredit’s Aula Magna auditorium. Attendees included Chairman

Dieter Rampl, Deputy Chairperson Anna Simioni, Chairman of the

Scientific Committee Professor Franco Bruni, Professor Giovanna

Nicodano and Professor Silvia Giannini, members of the Scientific

Committee, and Chairman of the Board of Auditors Giorgio Loli.

During the ceremony, the following individuals received awards:

1. Michela Giorcelli and Stefano Mosso, winners of the eighth

edition of the Giovanna Crivelli Scholarship;

2. Audinga Baltrunaite, winner of the first edition of the Foscolo

Europe Scholarship;

3. Emiliano Santoro, winner of the first edition of the Foscolo

Europe Fellowship;

4. Silvia Giannangeli, Elena D’Alfonso and Martin Krekel,

winners of the UniCredit Best Paper Award;

5. Andrea Brasili, special mention for the quality of work

presented for the UniCredit Best Paper Award;

6. Matteo Consalvi, Alexander Giese, Stephan Maier, Jan

Marhun, Matteo Ortisi, Igor Paholok and Giovanni Scotto di

Freca, special mention for their participation in the Best Paper

Award contest.

During the event, two of the foundation’s scholars currently

pursuing their Ph.D.s in the United States - Roberto Robatto

(University of Chicago) and Marco Di Maggio (Massachusetts

Institute of Technology) - participated by video conference.

They greeted the new award recipients and talked about the

importance of their experience abroad, for which they thanked the

UniCredit & Universities Foundation.


Dieter Rampl, Chairman of the Board of Directors of the UniCredit & Universities Foundation, during the awards ceremony on June 14, 2010.

From left to right: Stefano Mosso, winner of the 2009 Crivelli Scholarship, 8th edition; Michela Giorcelli, winner of the 2009 Crivelli Scholarship, 8th edition; Audinga Baltrunaite, winner of the 2009 Foscolo Europe Scholarship, 1st edition; Emiliano Santoro, winner of the 2009 Foscolo Europe Fellowship, 1st edition.


THE FOUNDATION’S NETWORKAn important part of the activities carried out during 2010 by the

foundation focused on the creation of a extensive, sturdy network of

international relationships. This is fundamental to reaching the most

talented students and researchers worldwide, and to collaborating with the

best universities in implementing important, new initiatives.

The foundation’s network currently consists of two main components:

1. the university network - all relationships with research departments,

master’s programs and universities with which current and potential

collaborations take place;

2. the scholars network - all relationships with students and researchers who

have been awarded and with whom the foundation maintains close ties.

The university network was extended during the year. The departments,

master’s programs and universities with which the foundation collaborates

are primarily those which applicants themselves indicate as their preferred

places for study.

Thus, the foundation collaborates with those universities that are currently the

most popular among the most talented students - and those universities that

best complement the objectives and projects it seeks to support.

In many cases, the first contact with these universities is encouraged by the

scholars associated with the foundation, who, in their own right, become

ambassadors of UniCredit & Universities worldwide.

The foundation is committed to including a significant number of universities

from Central and Eastern Europe, thus encouraging the involvement of

students and researchers from this region in all of its initiatives.

The creation of a university network is key to spreading awareness of the

foundation’s activities, alongside communications that are disseminated via

the internet and social networks.

The university network is complemented by a network of scholars,

which has as many individuals as the number of the foundation’s award

recipients and includes scholars from major European and American

universities.

The foundation maintains close ties with award winners. It provides

them concrete support to overcome any logistical difficulties they might

encounter during their experiences abroad, and involves them in seminars

and teaching activities at events and courses organized by UniCredit

or universities within the foundation’s network. Managing this network

incorporates two key events: the awards ceremony and a Christmas

celebration that was originally a tradition among Crivelli Scholarship

participants. In 2010, it was broadly extended to bring together the

foundation’s awardees and key contacts.

On both of these occasions, students are able to meet the professors of the

Scientific Committee and their tutors in order to discuss progress to date and

share future objectives. They are also able to speak with the foundation’s

management to provide feedback on their personal initiatives.

THE UNIVERSITY

NETWORK

1

2110

8 14 1513

167

418

9

2311

2

3

20

19

5 6

1712

22

MASTER’S SCHOLARSHIPS

1 Barcelona Graduate School of Economics - University Pompeu Fabra

2 London School of Economics and Political Science

3 Stockholm School of Economics

4 Toulouse School of Economics

SCIENTIFIC COMMITTEE

5 Paris 2

6 Goethe University Frankfurt

7 University of Vienna

8 University of Turin

9 University of Bologna

10 Federico II University of Naples

11 Bocconi University of Milan

UNIVERSITY INITIATIVES

12 LUISS School of Government

13 University of Trieste

FELLOWSHIPS

14 Bocconi University

15 Catholic University of Milan

16 Central European Universityof Budapest

OTHER RELATIONSHIPS

17 Koc University Istambul

18 Corvinus Budapest

19 Warsaw School of Economics

20 GSM St. Petersburg University

POST-DOC

RESEARCH GRANTS

21 Federico II Naples University

22 Parthenope Universityof Naples

23 University of Milan-Bicocca

30

Annual Report


For 2011, UniCredit & Universities Foundation has established a number of important objectives with a view to confirming its role in

supporting the academic and research pursuits of the best talent throughout Europe.

First and foremost, the foundation will work to consolidate and further extend its international network of relationships with very important

universities, which will allow it to best meet the needs of students, researchers and, more generally, the international world of academia. This

objective will also help generate proposals for new initiatives of a high scientific profile.

UniCredit & Universities will also work to increase the involvement of scholars in promotional activities, organizing seminars in which they

share their projects and progress with a broader public. This particular objective will confirm the foundation’s commitment to generating

maximum visibility within the academic world of the results obtained by its scholars, rather than limiting an appreciation of the value

generated to the award winners themselves.

To complete the portfolio of its activities proposed in 2010, the foundation will assess the opportunity to extend the scope of its initiatives to

include undergraduate students.

Finally, in 2011, there will be a review of the effectiveness of the fields of involvement in which the foundation has thus far concentrated its

activities and the preferred methods for their implementation.

These objectives can only be achieved through decisions made by the Board of Directors - decisions that will take into account the in-depth

analysis carried out in 2010.

Main Goals


To the Board Members,

We ask you to approve the 2010 Accounts presented herein that show an operating surplus of €120,327, which will be appropriated to increase the

operating reserve.

Secretary General



Balance Sheet 36

Report on Operations 37

Notes on the Accounts 38

Accounting Principles and Valuation Criteria 39

Note on the Balance Sheet and the Report on Operations 40

Annexes 47

A) Breakdown of Securities Portfolio as of December 31, 2010 47

Financial Statements



Assets (Amounts in €)

12.31.2010 12.31.2009

C) Floating assets 2,705,364 1,364,618

II - Receivables 639 -

5) Due from others 639 -

III - Short-term financial assets not classified as fixed assets

990,032 1,003,121

2) Other securities 990,032 1,003,121

IV - Liquid assets 1,714,693 361,497

1) Bank deposits 1,693,556 341,920

2) Cash held at asset management companies

20,937 19,377

3) Cash and cash equivalents on hand

200 200

TOTAL ASSETS 2,705,364 1,364,618

Liabilities (Amounts in €)

12.31.2010 12.31.2009

A) Net equity 839,779 719,452

I - Operating reserve 323,322 202,995

1) Surplus/Deficit on operations in period

120,327 -276,249

2) Available reserve 202,995 479,244

II - Endowment fund 516,457 516,457

D) Payables, with details on each item for amounts due after the subsequent period

1,865,585 645,105

2) Payables for contributions to be disbursed

1,791,098 616,000

2.1) Crivelli Scholarships 671,742 244,000

due within the following period 280,280 61,000

due after the following period 391,462 183,000

2.2) Crivelli Fellowship 173,622 -

due within the following period 60,216 -

due after the following period 113,406 -

2.3) Foscolo Europe Scholarships 97,500 110,000



2.4) Foscolo Europe Fellowship 486,784 252,000



2.5) Prizes 147,500 10,000



2.6) Support to initiatives c/o universities

78,950 -

2.9) Masterscholarships 135,000 -

due within the following period 96,903 -


6) Accounts payable 71,407 13,526

7) Taxes payable 3,080 9,046

12) Other payables - 6,533

E) Accruals and deferrals - 61

1) Accrued liabilities - 61

TOTAL LIABILITIES 2,705,364 1,364,618

Memorandum accounts

12.31.2010 12.31.2009

Commitments by UniCredit for disbursements futures managed by the Foundation

- 504,000

Balance Sheet


Expenses (Amounts in €)

2010 2009

1) Expenses from ordinary operations 1,652,047 846,443


1.2) Crivelli Fellowship 234,000 15,054

1.3) Foscolo Europe Scholarships - 110,000


1.5) Prizes 154,984 10,000

1.6) Supports to initiatives c/o universities

152,600 40,000

1.7) Communication costs 16,705 3,431

1.8) Compensations and expenses for Members of the Scientific Committee

68,758 -


4) Financial expenses and losses 4,371 -

4.4) From other assets 4,371 -

6) General administrative costs 161,480 126,887

6.1) Employees 93,031 68,767

6.2) Other operating expenses 68,449 58,120

TOTAL EXPENSES 1,817,898 973,330

OPERATING SURPLUS 120,327 -

TOTALS 1,938,225 973,330

Revenues (Amounts in €)

2010 2009

1) Revenues from ordinary operations 1,900,000 648,000

1.1) Contributions received 1,900,000 648,000

4) Financial income and gains 10,944 49,081

4.1) From bank deposits 7,503 3,351

4.4) From other assets 3,441 45,730

7) Other Income 27,281 -

Amounts recovered from scholarships and initiatives concluded or not implemented

27,281 -

TOTAL REVENUES 1,938,225 697,081

OPERATING DEFICIT - 276,249

TOTALS 1,938,225 973,330

Report on Operations


Introduction

The UniCredit & Universities Knight of Labor Ugo Foscolo Foundation was constituted in Rome on July 13, 1966, as “Fondazione Cavaliere del

Lavoro Ugo Foscolo, già Presidente del Banco di Roma,” with a restricted equity of 50,000,000 ITL (currently €516,456.90), thanks to subsequent

extraordinary contributions made at the end of 1991 by what was formerly Banco di Roma.

The foundation’s current name came into effect on November 16, 2009, the date on which it received approval of its new articles of association from

the Prefecture of Rome.

It is categorized as a private, non-profit foundation and has been recognized under Italian Presidential Decree no. 255 of March 28, 1967 (Official

Gazette no. 118 of May 12, 1967).

The foundation has the following purpose:

• to promote studies and initiatives aiming to increase awareness of economic, financial, legal, political and social matters;

• annually award one or more scholarships;

• institute prizes for degree theses or specific studies in financial, economic, legal, political and social matters;

• propose and support initiatives in the academic world;

The foundation consists of: the Board of Directors, the Chairperson, the Secretary General and the Statutory Board of Auditors.

Contents and Form of the Financial Statements

The financial statements were drawn up in accordance with the recommendations issued by the Non-profit Enterprises Commission of the National

Board of Chartered and Expert Accountants.

They consist of the Balance Sheet, the Report on Operations and the Notes on the Accounts, and are accompanied by the above Chairman’s Report.

The year 2010, which followed the year in which the foundation’s activities were renewed, saw a significant increase in contributions received, which

has made it possible to support a greater number of scholarships and initiatives. In this context, the comparisons provided, which depict different

situations, are for information only.

The financial year ended with an operating surplus of €120,327. This surplus represented income for the year not yet committed to scholarships and

initiatives, as of December 31, 2010, and will be appropriated to increase the operating fund.

The accounts are audited by the Board of Auditors.

Since the foundation does not conduct commercial business, its income is not subject to VAT or income tax, but it is subject to IRAP (regional business

tax).

Notes on the Accounts



Accounting Principles and Valuation CriteriaIncome and expenses are reported on an accrual basis with the exception of contributions received, which are recorded on a cash basis. Accrual of the

costs of ordinary activities is determined on the basis of the expenses incurred by the spending decisions made by the Board of Directors.

AssetsFloating assetsReceivables are posted at their face value, which coincides with their estimated realizable value.

The item “Short-term financial assets - Other securities” includes securities in which the foundation’s funds are invested for asset management purposes

until used by the institution. These securities are all priced and valued at market value, understood as the price reported on the last significant trading day of the

period, including any accrued income due.

Liquid assets are reported at face value.

Accrued income and prepaid expenses These items are calculated in accordance with the accruals concept and in accordance with the general principle of correlation between costs and income in the period.

LiabilitiesNet equityThe Operating Reserve consists of operating results for the current and previous periods.

The Endowment Fund is recognized at face value and represents the value of contributions made to this end at the time the foundation was founded or with

subsequent deposits.

Payables, with details for each item of amounts due after the following periodPayables are reported at their face value.

Payables for contributions to be disbursed represent the foundation’s commitment for disbursements not yet made to scholarships and initiatives deliberated.

They are divided up according to the type of scholarship or initiative supported.

Accounts payable include amounts owed with respect to invoices or bills received as well as the amount of any invoices or bills to be received for services received

but not invoiced by the end of the year.

Taxes payable include the advance withholding tax on the income of self-employed workers, taxes withheld from scholarship students and the amount of IRAP due.

Other payables represent all remaining payables, which, by their nature, are not included in the previous items, including the substitute tax on asset management

earnings that has accrued and is owed to the asset management company, which acts as withholding agent.

Accrued liabilities and deferred income are calculated in accordance with the accruals concept and the general principle of correlation between costs and

income in the period.

Memorandum accountsThese represent commitments by UniCredit S.p.A., managed by the foundation to cover the expenses deriving from said commitments, which may be

incurred in the years 2010 - 2013.

Expenses Expenses from ordinary operations include all contributions and expenses for scholarships and initiatives approved during the period by the Board of Directors.

Financial expenses and losses represent losses deriving from investments in asset management accounts.

Administrative costs reflect the costs incurred by the foundation during the reference period to conduct its operations.

RevenuesRevenues from ordinary operations represent the donations received during the period.

Financial income and gains represent bank interest and income from investments in asset management accounts and repurchase agreements entered into and

settled during the period.

The item Other Income brings together the remaining revenues, which by nature cannot be included in the previous categories, and includes surpluses recovered on

scholarships and initiatives completed or not implemented.


Financial Statements I Notes on the Accounts

Assets (Amounts in €)

12.31.2010 12.31.2009

C) Floating assets 2,705,364 1,364,618

II - Receivables 639 -

5) Due from others 639 -

Receivables due from others represent the substitute tax credit relating to the negative result of asset management as of December 31, 2010, in

addition to items currently being prepared.

12.31.2010 12.31.2009

III - Short-term financial assets not classified as fixed assets 990,032 1,003,121

2) Other securities 990,032 1,003,121

Other securities include the value of securities (BOT, BTP, CCT and European government securities) held in portfolio. They are booked at the market

value on the last business day of December 2010 and include accrued interest of €8,691. A breakdown of the securities portfolio as of December 31,

2010, is provided in the table in Annex A.

12.31.2010 12.31.2009

IV - Liquid assets 1,714,693 361,497

1) Bank deposits 1,693,556 341,920

2) Cash held at asset management companies 20,937 19,377

3) Cash and cash equivalents on hand 200 200

Bank deposits represent the total of current account balances held at UniCredit S.p.A. These amounts consist of non-binding positions.

Cash held at asset management companies is the cash generated from the asset management relationship indicated under “Other securities.”

Cash and cash equivalents on hand is the balance of petty cash used for current expenses.

12.31.2010 12.31.2009

Memorandum accounts - 504,000

As of December 31, 2010, following deposits made during the year, the commitments of UniCredit S.p.A. were reported to have been repaid.

Note on the Balance Sheet and the Report on Operations


Liabilities (Amounts in €)

12.31.2010 12.31.2009

A) Net equity 839,779 719,452

I - Operating reserveThis amounts to €323,322, consisting of the €120,327 operating surplus for the year and €202,935 in available reserve.

II - Endowment fund This was paid at the time of constitution and increased through subsequent payments made by what was previously the Banco di Roma, until reaching

the current balance of €516,457.

Changes in Net Equity are indicated in the table below.

MANAGEMENT FUND ENDOWMENT FUNDTOTAL SHAREHOLDER

EQUITY

Start of year 202,995 516,457 719,452

Operating result for the period 120,327 - 120,327

Balance as of 12.31.10 323,322 516,457 839,779

12.31.2010 12.31.2009

D) Payables, with details on each item for amounts due after the subsequent period 1,865,585 645,105

Payables for contributions to be disbursed totaled €1,791,098 and represent the foundation’s commitment to scholarships, research grants and

initiatives that have been approved with disbursements to occur in future periods. The following table provides a breakdown of expenses by type and

by disbursement period.



Payables due (Amounts in €)

12.31.2010

WITHIN THE FOLLOWING PERIOD

BEYOND THE FOLLOWING PERIOD TOTALS

Crivelli Scholarships 280,280 391,462 671,742

Amounts for scholarships - 9th edition 37,500 112,500 150,000

University fees - 9th edition 33,488 186,512 220,000

Amounts for scholarships - 8th edition 50,000 25,000 75,000

University fees - 8th edition 53,023 67,450 120,473

Amounts for scholarships - 7th edition 25,000 - 25,000

University fees - 7th edition 81,269 - 81,269

Crivelli Fellowship 60,216 113,406 173,622

Amounts for fellowships - 2nd edition 60,000 105,000 165,000

Insurance - 2nd edition 216 8,406 8,622

Foscolo Europe Scholarships 25,000 72,500 97,500

Amounts for scholarships - 1st edition 25,000 12,500 37,500

University fees - 1st edition - 60,000 60,000

Foscolo Europe Fellowship 75,432 411,352 486,784

Amounts for fellowships - 2nd edition 15,000 225,000 240,000

Insurance - 2nd edition 216 9,784 10,000

Fees for research grants - 1st edition 60,000 165,000 225,000

Insurance - 1st edition 216 11,568 11,784

Prizes 87,500 60,000 147,500

Post-Doc Research Grant 1st edition 30,000 60,000 90,000

CEE Best PhD Thesis Award 1st edition 30,000 - 30,000

UniCredit Best Paper Award 2nd edition 15,000 - 15,000

UWIN Best Paper Award 1st edition 12,500 - 12,500

Supports to initiatives at universities 78,950 - 78,950

LUISS SoG Master’s Programs 58,950 - 58,950

UNIEAST Research Grants University of Turin 20,000 - 20,000

Masterscholarships 96,903 38,097 135,000

Amounts for scholarships - 1st edition 96,903 38,097 135,000

Accounts payable amounted to €71,407 and included amounts owed with respect to invoices to be received and amounts due to UniCredit S.p.A., in

relation to the cost of personnel seconded to the foundation.

Taxes payable totaled €3,080 and included the scholarship students-related advance withholding tax and deductions that were paid to tax authorities

in January 2011, and the balance of IRAP due for 2010.

The item Other liabilities, which as of December 31 2009, represented the payables due to the asset management company for substitute

tax on the asset management earnings accrued and not yet withheld, on December 31, 2010, did not present a significant balance. This is because,

during the 2010 financial year, asset management did not generate earnings, but rather losses.

12.31.2010 12.31.2009

D) Accruals and deferrals - 61

12.31.2010 12.31.2009

1) Accrued liabilities - 61

As of December 31, 2010, the item Accrued liabilities had no significant balance.

Note on the Balance Sheet and the Report on Operations (CONTINUED)


Expenses (Amounts in €)

2010 2009

1) Expenses from ordinary operations 1,652,047 846,443

These can be broken down as follows:


1.2) Crivelli Fellowship 234,000 15,054

1.3) Foscolo Europe Scholarships - 110,000


1.5) Prizes 154,984 10,000

1.6) Supports to initiatives at universities 152,600 40,000

1.7) Communication costs 16,705 3,431

1.8) Compensations and expenses for Members of the Scientific Committee 68,758 -


Doubled up from last year, by virtue of the greater available funds due to the significant increase of contributions received during the year.

The item Crivelli Scholarships amounts to €640,000. It includes the expenses (scholarships and university taxes) sustained for the below-listed editions

of the scholarships in memory of Giovanna Crivelli, assigned by contest. From the ninth edition, authorized and launched during the financial year, the

Crivelli Scholarships have been extended to a European scope, insofar as they are no longer available only to Italian students, but to students from the

22 countries in which UniCredit operates. Also, the number of scholarships envisaged has been increased from two to three. In addition to the expense

of the scholarships launched in financial year 2010, additional costs were incurred for this year, including allocations for the remaining duration of the

scholarships launched in previous years by UniCredit S.p.A. The table below provides a breakdown according to edition and type of expense.

Borse di studio Crivelli 640,000

• 9th edition 370,000




Expenditures for scholarships 275,480





University taxes 364,520




The item Crivelli Fellowship for €234,000, of which €225,000 is for grant money and €9,000 for insurance policies stipulated for scholars, includes

costs incurred during the financial year in addition to the allocation of the maximum expense that may be incurred for the remaining duration of the

fellowship’s second edition, launched in April 2008 by UniCredit S.p.A.. This edition saw the award of one scholarship.

In financial year 2010, no costs were sustained for Foscolo Europe Scholarships, as they were functionally assigned to the Crivelli Scholarships.

The item Foscolo Europe Fellowship includes the maximum expense sustainable for the second edition of the Foscolo Europe Fellowship decided on

during the year, which involved the assignment of one scholarship. The total of €250,000 consists of the grants made to the scholars (€240,000) and

the premiums for insurance policies stipulated for the scholarship student (€10,000).

During financial year 2010, the prizes listed below were awarded, for a total cost of €154,984.

• Post Doc Research Grant 1st edition 90,000

• CEE Best PhD Thesis Award 1st edition 30,000

• UniCredit Best Paper Award 2nd edition 15,000

• UWIN Best Paper Award 1st edition 12,500

• UniCredit Best Paper Award 1st edition 7,484



In financial year 2010, with respect to university initiatives, support of the following activities was approved for a total cost of €152,600:

• LUISS SoG Master’s Programs 95,100

• Bachelor’s degree courses at University of Trieste 20,000

• UNIEAST Research Grants University of Turin 20,000

• Conference on Higher Education Politecnico University of Turin 12,500

• Summer School scholarships at the CARIM Schuman Centre 5,000

Communication costs of €16,705 cover of the cost of digital PR and social networking services rendered in relation to online communications for

scholarship and prize contests, costs sustained in connection with award ceremonies for scholarships assigned during 2010 and for advertising

contest announcements.

The item Fees and expenses for Members of the Scientific Committee for €68,758 includes the charges relating to fees and expenses sustained

by the Members of the Scientific Committee when assessing candidates for the various contests in order to assign scholarships and prizes, as well as

when assessing the work performed by the various scholarship students in order to renew grants.

The Masterscholarships present a cost for the year of €135,000, which includes university taxes and fees. This is a new initiative that involves

a contest for students from the 22 different countries in which UniCredit is present. Scholarships are awarded to attend a master’s program in

economics or finance in one of four top European schools of economics. This edition plans to assign four scholarships.

2010 2009

4) Financial expenses and losses 4,371 -

4.4) From other assets 4,371 -

An anomalous trend in the state securities market in the latter part of the year has resulted in a significant depreciation of some securities held in the

portfolio.

The item From other assets for €4,731 represents, for the financial year 2010, the net loss generated by asset management with a special risk

profile (principally money market investments with a residual bond component). A portion of the cash awaiting distribution by the institution is invested

in these instruments. This loss is linked to a particularly negative market trend seen in the latter portion of the year. In addition to this, there were

other anomalies involving some CCTs held in the portfolio, which, although typically defensive instruments able to reduce portfolio risks in an unstable

market, and although they were close to expiry, suffered significant impairment. As confirmation of the anomalous nature of the events of year-end, the

trends of securities with a duration of less than two years had already returned to “normal” levels during the first two months of 2011.

The loss is posted net of expenses and the tax receivable in relation to the capital loss. It can be broken down as follows:

2010

Impairment assessed -26,249

• Change in portfolio valuation -22,871

• Losses realized on securities sold -3,378

Interest accrued on coupons and other 21,253

Substitute tax 625

2010 2009

6) General administrative costs 161,480 126,887

These are the expenses incurred in the performance of activities aimed at achieving the foundation’s goals. They consist of:

2010 2009

6.1) Payroll (seconded staff) 93,031 68,767

6.2) Other operating expenses 68,449 58,120

Payroll (seconded staff)The foundation does not have its own employees and uses staff seconded from UniCredit at a cost of €93,031.

A comparison with last year is for information only, as, in 2009, staff was not seconded to the foundation for the entire year.



Other operating expenses (€68,449) consisted of the following:

2010 2009

Fees paid to professionals and professional services 21,649 26,349

Exhibitions and events 4,894 -

Taxes and witholding 10,745 8,024

• IRAP (regional business tax) 10,570 7,901

• Revenue stamps and miscellaneous indirect taxes 175 123

Other: 31,161 23,747

• Entertainment expenses 621 143

• Stationery supplies, printed matter and miscellaneous office supplies 154 14

• Travel expenses 886 174

• Rents paid 27,759 23,240

• Miscellaneous (subscriptions, publications, association dues, etc.) 1,741 176

Total 68,449 58,120

Revenues(Amounts in €)

2010 2009

1) Revenues from ordinary operations 1,900,000 648,000

Total contributions received of €1,900,000 were made up of donations from UniCredit Banca di Roma S.p.A., merged by incorporation into UniCredit

S.p.A. on November 1, 2010.

2010 2009

4) Financial income and gains 10,944 49,081

4.1) From bank deposits 7,503 3,351

4.4) From other assets 3,441 45,730

The item From bank deposits, for a total of €7,503, consists entirely of net interest accrued during the year on current accounts. This was an

increase from the previous year due to the increase in liquid funds awaiting allocation by the institution.

The item From other assets for €3,441, represents, for financial year 2010, the proceeds deriving from repurchase agreements. A portion of the cash

awaiting distribution by the institution is invested in these instruments. Income is reported net of expenses and taxes. This was down from the previous

year, because the proceeds deriving from asset management generated a negative result during the course of this year.

In a comparison with last year, there is a net reduction due to the altered market conditions.

2010 2009

7) Other Income 27,281 -

Recoveries on editions of scholarships and initiatives concluded or not implemented 27,281 -

The item Other Income totaled €27,281 and represents, for the year, the recovery of surpluses on scholarships and initiatives completed, as detailed

below.

Recoveries on scholarships and initiatives concluded 27,281

• Crivelli Scholarship - 5th edition 25,480

• Crivelli Scholarship - 6th edition 1,525

• UniCredit Best Paper Award - 1st edition 276



Other Information

As of December 31, 2010, the foundation had no employees, but used the services of two individuals seconded from UniCredit.

The foundation does not hold, nor did it acquire or sell during the year, any shares of UniCredit or its companies. In 2010, the members of the Board

of Directors received no compensation.

Milan, March 15, 2011

Secretary General




A) Breakdown of Securities Portfolio, as of December 31, 2010

(Amounts in €)

TYPE OF SECURITIES

BALANCE ACCRUED INTEREST

CLOSING BALANCEFACE VALUE MARKET VALUE COUNTERVALUE

Bot zero coupon 15.08.2011 92,000 98,9886 91,070 - 91,070

Btp 01.02.12 5% 24,000 102,7500 24,660 496 25,156

Btp 15.10.12 4.25% 25,000 102,5000 25,625 225 25,850

Btp 01.02.17 4% 38,000 99,4700 37,799 627 38,426

Btp 01.02.19 4.25% 41,000 98,4500 40,364 720 41,084

Btp 01.02.20 4.50% 25,000 99,1100 24,777 465 25,242

Btp 01.02.37 4% 30,000 82,8000 24,840 496 25,336

Cct Jul 2013 608,000 97,9610 595,603 3,870 599,473

Cct Dec 2014 TV 76,000 96,0877 73,027 111 73,138

Dbr 04.01.14 4.25% 40,000 108,9400 43,576 1,681 45,257

Total 999,000 981,341 8,691 990,032

Annexes


Report of the Board of Auditors

Sorter pages: UniCredit.

Creative concept: BBH Partners LLP, London.

Cover Illustration: James Taylor, Illustrator c/o Debut Arts, London.

Graphic development and composition: Mercurio - Studi di promozione pubblicitaria, Milan

www.mercurioitaly.it

Printed: Tipografi a Litografi a A. Scotti Srl (Cornate d’Adda)

April 2011

Printed on certified recycled chlorine-free paper.

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