Fabio Innocenzi Group CEO

Transcription

1 Fabio Innocenzi Group CEO Banca Leonardo Conference Rome, 22 November 2007

2 Disclaimer In connection with the proposed business combination, the required information document will be sent to Commissione Nazionale per le Società e la Borsa ( CONSOB ). Investors are strongly advised to read the documents that will be sent to CONSOB, the registration statement and prospectus, if and when available, and any other relevant documents sent to CONSOB, as well as any amendments or supplements to those documents, because they will contain important information. This presentation is being supplied to you solely for your information and may not be further distributed or passed on to any other person or published, in whole or in part, for any purpose. Neither this presentation nor any copy of it may be taken or transmitted into the United States, Canada, Australia or Japan or distributed, directly or indirectly, in the United States, Canada or Australia or distributed or redistributed in Japan or to any resident thereof. The distribution of this presentation in other jurisdictions may be restricted by law or regulation. Accordingly, persons who come into possession of this document should inform themselves of, and observe, these restrictions. To the fullest extent permitted by applicable law, the companies involved in the proposed business combination disclaim any responsibility or liability for the violation of such restrictions by any person. This presentation does not constitute or form part of, and should not be construed as, any offer or invitation to subscribe for, underwrite or otherwise acquire, any securities of Banco Popolare di Verona e Novara or any member of its group, any securities of Banca Popolare Italiana or any member of its group nor should it or any part of it form the basis of, or be relied on in connection with, any contract to purchase or subscribe for any securities in Banco Popolare di Verona e Novara or any member of its group, any securities of Banca Popolare Italiana or any member of its group or any commitment whatsoever. Persons who intend to participate in the proposed tender offers are reminded that any such participation may only be made solely on the basis of the information contained in the respective offer documents to be issued by Banco Popolare di Verona e Novara and Banca Popolare Italiana in accordance with the relevant tender offer and securities laws regulations which may be different from the information contained in this presentation. The information contained in this presentation is not for publication, release or distribution in Australia, Canada, Japan or the United States (within the meaning of Regulation S under the US Securities Act of 1933, as amended (the "Securities Act")). This presentation and the information contained herein are not an offer of securities for sale in the United States and may not be viewed by persons in the United States except for qualified institutional buyers (as defined in Rule 144A under the Securities Act) ( QIBs ). The securities proposed to be offered in Banco Popolare di Verona e Novara have not been and will not be registered under the Securities Act and may not be offered or sold in the United States except to QIBs in reliance on an exemption from, or transaction not subject to, the registration requirements of the Securities Act. The information contained in this presentation is for background purposes only and is subject to amendment, revision and updating. Certain statements in this presentation are forward-looking statements under the US federal securities laws about Banco Popolare di Verona e Novara and Banca Popolare Italiana and their combined business after completion of the proposed business combination. Forward-looking statements are statements that are not historical facts. These statements include financial projections and estimates and their underlying assumptions, statements regarding plans, objectives and expectations with respect to future operations, products and services, and statements regarding future performance. Forward-looking statements are generally identified by the words expects, anticipates, believes, intends, estimates and similar expressions. By their nature, forward-looking statements involve a number of risks, uncertainties and assumptions which could cause actual results or events to differ materially from those expressed or implied by the forward-looking statements. These include, among other factors, the satisfaction of the conditions of the offering, changing business or other market conditions and the prospects for growth anticipated by the Banco Popolare di Verona e Novara s and Banca Popolare Italiana s management. These and other factors could adversely affect the outcome and financial effects of the plans and events described herein. Forward-looking statements contained in this presentation regarding past trends or activities should not be taken as a representation that such trends or activities will continue in the future. Banco Popolare di Verona e Novara and Banca Popolare Italiana do not undertake any obligation to update or revise any forward-looking statements, whether as a result of new information, future events or otherwise. You should not place undue reliance on forward-looking statements, which speak only as of the date of this presentation.

3 Performance highlights Performance of ex-bpvn is progressing well in spite of the difficult operating environment. Ex-BPI results impacted by structural re-engineering. Merger integration well on track, with full confirmation of synergies. Management of low-yielding assets under close review (Bipielle Net already sold). Downsizing of the risk profile of former BPI well under way (closure of Kamps risk)

4 Agenda 4 Section 1: Update on merger & integration Section 2: Other topical issues Section 3: Banco Popolare consolidated nine-months 2007 results Questions & Answers Appendices Performance details

5 Section 1 Update on merger & integration

6 Migration activities in progress: IT migration plan well under way Creation of Holding system and trasformation of co-operative into Scarl SpA Completion of Holding Treasury integrated (August 07) Group data base Already done Already done Analysis of data and differences Development of data migration Test After BP Crema launch Test BPL After launch Test after launch phase of other Banks (30 April 07 ) (31 July 07 ) Migration of BP Crema 7 September 07 Migration of BPL IT system 2 November 07 Migration of Migration of CR LuPiLi Caripe (1 February BP Mantova 08) BP Cremona (29 February 08) 31 March 2007 Launch of Holding and New SpA 7 September 2 November 31 (1 July 2007) December

7 Integration projects: results achieved since September Nov. Successful Big Bang migration of Banca Popolare di Lodi onto the Group s IT system Cost and productivity alignment synergies 01 Nov. Completion of preparatory activities for the sale of Ducato products on the networks of ex-bpvn Revenue synergies 01 Oct. Merger of Aletti Merchant into Efibanca Cost synergies 7

8 IT migration of Banca Popolare di Lodi Successful Big Bang on 2 Nov 2007 (~540 branches) Banca Popolare di Lodi has been fully operational with all procedures since Monday 5 November The migration of BPL was achieved less than two months after the migration of Banca Popolare di Crema Big-bang approach that has involved all procedures at all of the bank s branches Evidence of seamless operations already in the first two days after the migration Pre - Migration Post - Migration Monday Tuesday Monday Tuesday Monday Tuesday # of operations on CAs made in the branches # of operations on Deposits New openings of Current Accounts No impact on business operations with customers 8

9 IT migration of ex-bpi network: progress overview About 22,000 training days as of end-oct for BPL and BP Crema employees Ex-BPI networks Number of branches Cumulative # of branches migrated Banca Popolare di Crema is fully operational on 10 Sept % the Group s IT system 05 Nov. 07 Banca Popolare di Lodi is fully operational on the % Group s IT system 1 month in advance 01 Feb. 08 IT migration of CR LuPiLI and BP Mantova % 29 Feb. 08 IT migration of BP Cremona and Caripe % 9

10 Achievement of synergies Synergies achieved in September 2007 are well on track Synergies 70m Results achieved Phasing of total synergies E 2008E 2009E 2010E (6 months) Revenue/realignment synergies Cost synergies 40m /09/07 8.1m related to the internalisation of profitability margins from the sale of Banca Aletti structured products on the networks of former BPI and from the channelling of the ex-bpi trading book via Banca Aletti 10.6m from the renegotiation of the pricing of bancassurance products Cost synergies driven so far by other administrative expenses and depreciations In Q4, further cost synergies from other administrative expenses and depreciations are expected for a total of about 20m, to which personnel-related cost synergies will be added 10

11 Personnel: adherence to incentivised exit scheme Adherence to the scheme higher than business plan objectives 510 Adherence to the incentivised exit scheme as at 06 Nov Turnover without substitution 1, Personnel Synergies Exit phasing 300 Incentivized exits Objectives in accordance with the industrial plan Adherence as at 06/11/07 Q H

12 Integration projects: next steps Next integration steps Nov 07 - Dec 07 Completion of the centralisation of the Back Office functions into specialized poles Merger of Bipielle ICT into SGS Group operating machine Centralisation of Asset Management (integration of SGR and SGR Alternative management arms) Unification of the depositary banking activities of Gestielle mutual funds of BPL and BPV under Banco Popolare to be completed Cost synergies Cost synergies Cost synergies and productivity alignment synergies Cost synergies Feb 08 - Mar 08 Completed the migration Banks ex BPI on the IT system - Cr LuPiLi and BP Mantova (01/02/2008) - Caripe and Cremona (29/02/2008) 1 month in advance Cost synergies and productivity alignment synergies 12

13 Bancassurance: Executive Summary Formation of a Leading Bancassurance Platform Consolidating the bancassurance platform of the third largest distribution network in Italy (ca. 2,200 branches) Leveraging product expertise and production platform of FondiariaSAI Group (Life and Pensions) and Aviva Italia (Protection) as two of the leading providers for insurance products in Italy Insurance products become a core part of value creation in retail banking Long-Term Strategic Partnerships Long-term strategic partnership agreements with joint ownership of the insurance companies (1) cements mission to become one of the premier insurance providers in Italy Partners committed to product range innovation and development within the partnerships while building on an integrated support platform dedicated to both networks and clients Realisation of Franchise Value Diversification of the business mix to capture new value creation opportunities stemming from the cross-selling of insurance products in bundle with banking products Banco Popolare shares the upside of the development of the insurance franchise through 50% of profits earned by the joint ventures Transactions have allowed Banco Popolare to book app. 620m capital gain (1) Management control by insurance partners through the appointment of the CEO 13

14 Life and Pension JV Key Transaction Terms Key Terms Banco Popolare has entered into a bancassurance distribution agreement for Life and Pension insurance with Fondiaria-SAI Group (FonSAI) and sold a 50% stake in BPV Vita (the JV ) to FonSai for a consideration of 530m BPV Vita will become the sole provider of life and pension products for Banco Popolare The company will use the Asset Management services of Aletti and the insurance services of FonSAI Strategic long-term bancassurance agreement which can be renewed by mutual agreement of the parties, exclusive as of 1 January 2008 (1) Shareholders agreement Life penetration target Life technical reserves/indirect customer funds: 10% in 2010 Permits FonSAI full consolidation of the company (2) Includes put and call option arrangements (at appraisal value) in the event of a termination Attractive economics for Banco Popolare Capital gain of approximately 450m Commission structure in the line with market best practice Novara Vita Life Bancassurance Structure Banco Popolare Acquisition in % 50% BPV Vita + Novara Vita EV of Novara Vita to be integrated in 1H 2008 FonSAI EV of 238m in 2006 (incl. Novara Vita) FonSAI is #3 insurance group in Italy with GWP of ca. 10bn, AuM of ca. 25bn, 8 m clients as of FonSAI operates mainly in non-life business and is the leader in the Italian motor insurance sector with a 20% market share. It has a proven track-record in the deployment of partnerships, especially in the bancassurance business with Cariparma and BPM (life), Capitalia and BPM (nonlife). Fonsai has a long standing relationship with Banco Popolare, started with the partnership in Banca Popolare di Novara through Novara Vita and Novara Assicura. (1) Outstanding distribution agreements with AVIVA and AURORA will remain in place until their natural expiration (2) Management control by insurance partner through the appointment of the CEO 14

15 Protection JV Key Transaction Terms Key Terms Banco Popolare has entered into a bancassurance distribution agreement for Protection insurance with Aviva Italia (Aviva) and will sell a 50% stake in Novara Assicura to Aviva for a consideration of 250m Novara Assicura will become the sole provider of protection insurance products for Banco Popolare The JV will execute a number of strategic in-house functions The management of the JV s reserves will be provided by Banco Popolare through Banca Aletti Strategic long-term bancassurance partnership which can be renewed by mutual agreement of the parties, exclusive as of 1 January 2008 Shareholders agreement Protection penetration target CPI on new mortgages loan: 20% (30%) in 2008 (in 2012) CPI on new personal loans: 80% (85%) in 2008 (in 2012) on retail banking networks and 57% (64%) in 2008 (in 2012) on Ducato network Permits Aviva full consolidation of the company (1) Includes put and call option arrangements (at appraisal value) in the event of a termination Attractive economics for Banco Popolare Pre tax capital gain of approximately c. 240m (c. 160m after tax) Protection Bancassurance Structure Banco Popolare Portfolio % 50% Novara Assicura Novara Assicura to purchase the portfolio of policies distributed by Aviva on the basis of 2007 agreement Aviva Italia Aviva is #7 insurance provider in Italy with GWP of 4.1bn and 30% CAGR over the last 15 years and is #1 insurer in the UK, the most advanced market in Europe Aviva PLC operates over 30 bank partnerships with leading financial institutions around the world such as UniCredit Group, ABN Amro and Royal Bank of Scotland Aviva Italy is an experienced in operating Italian bancassurance networks through agreements with BPI/Ducato, UniCredit, Banca delle Marche, BPU as well as other operators Strong growth potential in the CPI segment (1) Management control by insurance partners through the appointment of the CEO 15

16 Section 2 Other topical issues

17 Capital management of the Business Plan Overview of Tier 1 capital ratio under Basel I Capital strengthening initiatives Share Buybacks ( ) ~ 6.1% Tier PF Basle I 1 Capital generated from retained earnings² Sale of equity stakes Sale of real estate assets Issuance of hybrid capital/ RMBS Capital management via reduction of RWA, CDS, Bancassurance JV Total Payout Ratio on Recurrent Net Income: ~50% Tier 1 Capital to finance organic growth in RWAs ~ 6.4% Tier E PF Basle I 17

18 Capital management: Capital position outlook Estimated impact of Basle II on the Group s Tier-1 capital ratio To be adopted in % 7.4% 6.6% -0.6% 6.0% Further benefits are expected from the adoption of Basle II Advanced, starting from 2010 Tier-1 ratio Basle I Elements to be deducted pursuant to new supervisory guidelines Tier-1 ratio current regulation Estimated Impact of Foundation Model (i) Tier-1 ratio Basle II Foundation (i) Foundation method, with new rating models for corporate loans of form BPVN Group; standard Basle II model for loans of former BPI Group 18

19 Flexibility in capital strengthening Participations Real estate Branch network optimization RWA management Capital Management targets confirmed: Core Tier 1 ratio > 5% Tier 1 ratio > 6% Total capital ratio > 10% as pro-forma end

20 Downsizing of ex-bpi risks 26 th June 2007, closing of Magiste exposure: MAGISTE - Banco Popolare will receive 26m as partial payment of its total exposure ( 202m) and waives about 176m (which have already been written down in 2005 and 2006). - Magiste group will waive the right to all claims or revocatory actions against Banco Popolare Group.. CLOSED Zero impact on P&L ANTONVENETA LITIGATIONS 28 th June 2007, BPI settled its legal position in Antonveneta legal proceedings: - The Antonveneta capital gain of about 94m (already written down in 2005) has been confiscated by public prosecutors. CLOSED Zero impact on P&L KAMPS 6 th November 2007, Banco Popolare and Barilla Group settled all legal controversies about Kamps financial exposure: - BP will sale the stake indirectly held in Kamps for 434m to a company fully controlled by Barilla. - Barilla Group will reimburse to Banco Popolare two loans facilities for a total amount of 70m. - BP will grant to Barilla Group a 13-year loans for 506m. CLOSED Zero impact on P&L 20

21 Liquidity & Derivatives: no concerns Liquidity Derivatives Loans to deposits ratio: 0.95 as at 30/09/2007 Net positive short-term interbank exposure since September (between 1bn- 3bn) No significant maturity of former issues in 2008 (about 800m in the first half) Customer monthly derivatives net MTM evolution floating from about 85m to 105m since December 2006 until September 2007 No risk exposure to public administrations (Plain vanilla contracts with positive MTM for customers) Growth in direct customer funding of about 8% from 30/09/2007 to 12/11/

22 Key delivery highlights Integration focus: Successful Big Bang migration (60% of total branches of former BPI as of Nov. 2007). Risk focus: Closure of all controversies with Barilla/Kamps. Adherence of 880 employees to the redundancy scheme. FOCUS ON DELIVERY 22

23 Section 3 Banco Popolare consolidated nine-month 2007 results

24 24 Group pro-forma profitability highlights (i) Includes the contribution of BPI also in FY2006 and in the first two quarters of 2007 Pro-forma Recurrent Pro-forma Stated m 9M M 2006 % change 9M M 2006 % change Total operating revenues Net interest income Divid.+profit (losses) from eq. inv. Net non-interest income 3, , , , , , % +9.8% % -3.9% 3, ,702.7 (115.9) 1, , , , % +7.9% n.s. +0.3% Operating costs (1,824.0) (1,725.3) +5.7% (1,809.9) (1,727.3) 4.8% Operating margin Net value adjust. for loans and similar Other net value adjustments (ii) Net provisions for risks and liabilities Inc. from the disp. of eq. part. + invest. Inc. before tax from contin. op. 1,268,5 (252,8) (54) (42.7) ,256.0 (211.1) (52.8) % 19.8% (1.2) -95.7% -19.1% % 1,217.3 (290.1) 1,337.2 (60.0) (61.6) , % 382.9% (4.7) n.s % Impairment of goodwill and equity inv. (36.3) (8.3) 337.3% 0-0 (50.8) ,348.6 Integration costs (after tax) (142.1) 0 n.s. (4.7) 549.7% 5.2% Net income of the period % % (i) (ii) Aggregate figures. Net value adjustments on financial operations, goodwill and participations

25 Group quarterly pro-forma recurrent profitability (i) 25 m Q3 07 Q2 07 Q1 07 Q4 06 Q3 06 Q2 06 Q1 06 Total operating revenues: , , , , ,003.7 Net interest income of which: core customer banking business (ii) Profits (losses) from companies carried at equity Net non-interest income (0.6) Operating costs Net financial result Q3/Q2: Banco Popolare Recurrent -13.2% Banco Popolare Stated +7.3% Peer Group -23.5% (624.9) (597.1) (602.0) (610.5) (582.5) (586.6) (556.2) Operating margin Net value adjustments for loans (68.6) (117.1) (67.1) (143.4) (63.0) (95.5) (52.5) Net provisions for risks and liabilities (5.9) (27.7) (9.1) (49.5) (5.9) (31.1) (15.8) Income before tax from continuing operat Net recurrent income of the period (i) All quarterly 2006 figures are restated on a homogeneous basis to account for changes in the area of consolidation. (ii) Q NII of the core banking business excludes, above all, about - 23m related to the Group s capital management, i.e. the payment of the extraordinary dividend of ex-bpi ( 1.5bn) and the issue of preference shares.

26 Appendix 26

27 Focus on Group Q results Key non-recurrent items to be booked in Q concern the capital gain from the JV with Aviva in protection and from the Borsa Italiana/LSE merger, for total of about 367m pre-tax ( 285m post-tax). 27 m Q3 Recurrent Q3 Stated Non-recurrent Comments Total operating revenues Net interest income Divid. + profit (losses) from equity inv. Net non-interest income m reimbursements from customers on closure of litigations 1.1m sale of shares in Lumson (Aletti Merchant) 0.1m sale of other AFS and reimbursement of HTM securities Operating costs (624.9) (624.9) 0 Operating margin Net value adjust. for loans and similar (69.1) (69.1) Net provisions for risks and liabilities (5.9) (11.9) (6.0) Impairment of goodwill and equity inv. 0 (35.2) (35.2) Provisions on guarantees for loans sold by Bipielle SGC Impairment on the stake in Banca Italease, written down to per share of which: share price warrant price (official closing prices as of 12/11/07) Inc. from the disp. of eq. part. + invest. Inc. before tax from continuing oper. Integration costs (after tax) Net income of the period (114.7) (114.7) m capital gain from the sale of a 50% stake in BPVita (JV with Fondiaria SAI), corresponding to 450.3m post- tax; 8.0m other revenues from the sale of real estate assets and investments 70.1m solidarity Allowance 26.4m incentivised exits 12.8m merger premium 0.7m interim staff & training 4.7m other administrative expenses Personnel-related expenses Total pre-tax integration costs in 9M07 amount to 216m, hence representing 72% of the total ( 300m)

28 Group volumes: customer loans & funds 28 m 30/09/07 A 30/06/07 B 31/12/06 30/09/06 % change C A/B % change A/C Group customer loans (gross) 85,636 82,380 73,933 76, % +12.2% Direct customer funds 90,185 88,904 82,712 79, % +13.8% Indirect customer funds 109, , , , % -10.6% o/w: retail customers o/w: institutional customers 84,647 87,970 86,044 83, % +1.4% 24,375 25,232 33,704 38, % -36.8% o/w AUM 47,904 48, % -2.0% - mutual funds , % +1.3% - managed accounts (i) , % -7.6% - life technical reserves , % +3.5% o/w: Assets under admin , % -16.4% Total customer funds 199, , , , % -1.0% Note: All data are period-end. (i) Includes funds of funds

29 Commercial banks: customer lending 29 /m TOTAL COMMERCIAL BANKS (i) (2,135 branches) BPVERONA + CREBERG (770 branches) 70,000 65,000 60,000 59,135 60, % 65, % 66,908 37,000 36,000 35,000 34,000 33,000 32,734 33, % 35, % 36,147 55,000 32,000 31,000 50,000 45,000 30/09/ /12/ /06/ /09/ ,000 29,000 28,000 30/09/ /12/ /06/ /09/2007 BPN (400 branches) BPL + CR LUPILI + OTHER (ii) ( branches) 12,000 11,500 11,000 10, % 10, % 11,295 20,000 19,000 18,000 17,362 17, % 19, % 19,466 10,000 9,500 9,000 8,500 9,039 9,367 17,000 16,000 15,000 8,000 30/09/ /12/ /06/ /09/ ,000 30/09/ /12/ /06/ /09/2007 (i) Indicated branch numbers refer to 30/09/2007 (ii) Other includes BP Cremona (72 branches), BP Crema (44 branches), BP Mantova (9 branches) and Caripe (55 branches)

30 Commercial banks: customer net interest income 30 m Customer net interest income: y/y trend +10.7% 1,550 1,400 Customer net interest income: quarterly trend m +8.9% +2.7% M M 2007 Q3 06 Q4 06 Q1 07 Q2 07 Q3 07 BP Group customer spread 4.25% 3.25% 2.25% 1.25% 3.41% 3.37% 3.38% 3.47% 3.48% 3.43% 2.30% 2.16% 2.06% 1.99% 1.98% 1.87% 1.11% 1.21% 1.32% 1.48% 1.50% 1.56% 3.42% 1.79% 1.63% 0.25% 1mth Q1 06 Q2 06 Q3 06 Q4 06 Q1 07 Q2 07 Q3 07 Euribor: 2.52% 2.77% 3.09% 3.51% 3.75% 4.01% 4.33% Customer spreads (i) Total avg. customer spread of which: Average asset spread Average liability spread 9M bps 188bps 156bps 9M bps 217bps 121bps % chg +6bps -29bps +35bps FY bps 212bps 128bps Total customer spread Asset spread Liability spread

31 Commercial banks: trend in average customer spreads 31 BPV-SGSP + CB BPN BPL + CR LUPILI+ OTHER +16bps +9bps -11bps 307 bps 323 bps 353 bps 362 bps 388 bps 377 bps M M M M M M 2007 Liability spread Asset spread

32 Commercial banks: quarterly recurrent customer revenues 32 /m TOTAL RETAIL BANKS (i) +9.1% BPV + CREBERG +8.1% Q06 2Q06 3Q06 4Q06 1Q07 2Q07 3Q Q06 2Q06 3Q06 4Q06 1Q07 2Q07 3Q07 BPN BPL + CR LUPILI (ii) + OTHER (iii) +17.2% +5.9% Q06 2Q06 3Q06 4Q06 1Q07 2Q07 3Q Q06 2Q06 3Q06 4Q06 1Q07 2Q07 3Q07 (i) Branches as of 30/09/2007 (ii) CRLuPiLi stands for Cassa di Risparmio di Lucca, Pisa e Livorno (iii) Other includes BP Cremona (72 branches), BP Crema (44 branches), BP Mantova (9 branches) and Caripe (55 branches)

33 Group quarterly recurrent net non-interest income 33 m Q3 07 Q2 07 Q1 07 Q4 06 Q3 06 Q2 06 Q1 06 Net commission income: Management, brokerage and advisory services Net financial result: Net result of trading and hedging of financial assets/liabilities valued at FV Dividends from ex participations Other net operating income Total recurrent net non-interest income

34 Group recurrent operating costs 34 m Operating cost: y/y trend +5.7% Operating cost: quarterly trend +7.3% +4.7% 1, , ,027 1, Average headcount 9M M , ,964 Q306 Q406 Q107 Q207 Q307 Personnel costs Other admin. costs Value adjustments on tangible and intangible fixed assets Personnel cost net of the interest rate effect for the actuarial calculation of severence fund liabilities (TFR): Q2 2007: 384.5m Q3 2007: 385.6m Other administrative costs well under control. +0.3% (i) Employees based on IAS, which includes, in addition to employees on the payroll, also temporary staff and employees with a training period or project contract.

35 Group recurrent provisions for credit risks (i) 35 Memo m 9M M 2006 FY 2006 Gross value adjustments on impaired loans Gross value adjustments for time factor Gross value adjustments for performing loans Net value adj. for guarantees and commitments = Total gross provisions (A) Write-backs on impaired loans Write-backs for time factor Write-backs on performing loans Net write-backs for guarantees and commitments = Total write-backs (B) Total net provisions (A-B) (i) Includes provisions for guarantees and commitments; FY 2006 data excluding Leasimpresa.

36 Group recurrent cost of credit risk 36 m Total gross provisions (i) excluding provisions for time factor (A) Write-backs excluding provisions for time factor 9M M Total net provisions (B) (i) Gross customer loans (C) 85, ,321.5 Gross provisions as a % of period-end gross customer loans (A/C) Net provisions as a % of period-end gross customer loans (B/C) (ii) (ii) 61 bps 41 bps 62 bps 29 bps (i) (ii) 9M 2006 data are restated excluding Leasimpresa provisions Annualised

37 Group impaired loans 37 m Gross impaired loans +12.5% +6.6% excluding Coppola exposure ,836.1m , % -9.1% +37.6% 4,314.9m , Increase due to the entry in July 2007 of 240m related to Coppola exposure +6.9% 1. 2, , /12/ /09/ NPLs 2. Watchlist 3. Restructured loans 4. Overdue positions (i) (i) Overdue positions are included in accordance with Bank of Italy guidelines and concern all positions that have continously been overdue/past due for more than 180 days.

38 Group credit quality ratios and new NPL flows 38 NPL ratio 3.0% 2.5% 2.0% 1.5% 1.0% 0.5% 0% 2.73% 2,60% 2.59% 1.14% 1,08% 1.08% 31/12/ /06/ /09/2007 Gross NPL loan ratio Net NPL ratio Watchlist loan ratio 2.0% 1.5% 1.53% 1.19% 1.54% 1.21% 1.87% 1.53% Excluding Coppola, gross and net watchlist loan ratios are 1.59% and 1.25%, respectively 1.0% 31/12/ /06/ /09/2007 Gross watchlist loan ratio Net watchlist ratio

39 Commercial banks: focus on asset quality (30/09/2007) 39 of which: key commercial banking networks BANCO POPOLARE BPV-sgsp + Creberg BPN BPLodi + CR Lu Pi Li + OTHER (i) Gross customer loans ( m) 85, , , ,655.0 Net customer loans ( m) 83, , , ,400.7 Gross NPLs ( m) 2, Net NPLs ( m) Gross NPL ratio 2.6% 2.0% 2.2% 3.4% Net NPL 1.1% 1.1% 1.3% 1.0% Recurrent: Gross credit provisions ( m) Net credit provisions ( m) Recurrent: Gross cost of credit risk (bps) (ii) Net cost of credit risk (bps) (ii) (i) (ii) Other commercial banks includes BP Crema, BP Cremona, BP Mantova and Caripe Annualised; including time factor for Banco Popolare.

40 Ex-BPI: Retail commercial performance* 40 Residential Mortgages Inflows Network Consumer Credit inflows m M07 +70% YoY 813 1,157 1,071 m M07 +74% YoY Q 2Q 3Q 4Q 777,545 Current Accounts More than 1,100 C/A net opening per month 787, Q 2Q 3Q 4Q Bancassurance Life and Structured bonds Inflows m M % YoY FY06 9M Q 2Q 3Q 4Q *The network includes: BPL, CR LUPILI, BP CREMA, BP CREMONA, CARIPE, BP MANTOVA

41 Pipeline of IR initiatives work in progress 18 January February March March 2007 April- May May May May May June June July September September October October October November November November November 2007 July - December January 2008 Place London London Milan London Milan Verona/Lodi LondonVerona/Lodi Verona/Lodi Lodi Paris Verona London Verona/Lodi Verona/Lodi Lisbon Paris Verona Verona/Lodi Verona Napa Valley London London Lisbon Tokyo London Amsterdam Verona Verona London Rome Event HSBC - Italian Regional Banking Conference UBS - Italian Financial Services Conference Press release and conference call on FY 2006 results Morgan Stanley - European Banks & Financials Conference Roadshows and conference calls in Italy and abroad Annual General Meeting of Shareholders (FY 2006 results) Press release on the approval of Q results Conference call on Q results BPVN & BPI Borsa Italiana/Exane BNP Paribas - Italian large and mid caps conference Deutsche Bank - Top of the Pops - 2nd edition Goldman Sachs conference "Competing in a consolidating world Press release on the creation of the new Banco Popolare Group Banco Popolare: Q results Conference Call JP Morgan West Coast International 1x1 Conference Merrill Lynch Conference Borsa Italiana/Nomura Italian Conference Borsa Italiana/ABN Amro Italian Conference Press release on Q results Banco Popolare: Q results conference call Kepler Mid Financials Conference Banca Leonardo Italian Banking Conference Roadshows and conference calls in Italy and abroad Pro-active + Open + Consistent London STRENGTHENING HSBC OF Italian VALUE Regional PERCEPTION Banking Conference 1 February 2008 Milan UBS - Italian Financial Conference

42 Key Contacts for Investors and Analysts 42 TOM LUCASSEN Head of Investor Relations Office: Elena Segura Office: Chiara Leoni Office: Vania Farinati Office: Elisa Mazzocco Office: Francesca Romagnoli Office: Fabio Pelati Office: