MAIN POINTERS EMERGING FROM STAR CONFERENCE PRESENTATION. DOWNGRADE TO ACCUMULATE ON STOCK PERFORMANCE.

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1 Banca truria Italy - Banking ACCUMULAT (prev. BUY) TARGT 16.4 March 6, 2006 Price : 1,803 BCI Index: N 71 BUSINSS PLAN UPDAT MAIN POINTRS MRGING FROM STAR CONFRNC PRSNTATION. DOWNGRAD TO ACCUMULAT ON STOCK PRFORMANC. Banca truria (PL) has presented its business plan update, setting definitely higher-thanexpected net profit targets for 2006 ( 44 mn vs. 37 mn) and substantially in line for 2007 ( 47 mn vs. 45 mn corresponding to Adj. RO in excess of 9%). The main difference between the business plan and our forecast is 2% higher annual total income growth (12%) and we believe a better outlook for Loan Loss Provisions (our estimates stand at 65 bps). PL also announced sale to Banca Lombarda of its financial advisor network consisting of 185 professionals with total collections of 670 mn for goodwill of 28 mn. The multiple on total assets (some 4%) is slightly higher than the average of the latest deals (around 3%). The news is positive in our view, as hidden value has emerged from an asset from which PL would have been unlikely to extract value, given issues of size, economy of scale, and business model. Disposal is expected to fund expansion of PL s branch network - with some 7 branches (4% of the total) added to the present structure by the end of 2006, on top of the 3 already opened at the beginning of this year. PL also presented the strategic guidelines for three product factories whose business should be developed over the next few years, i.e. leasing, P&C insurance, and personal loans. We believe these activities contribution to BP targets will, however, be minor as major expertise is required to develop such businesses profitably (particularly in the case of personal loans and P&C). Since our upgrade at the beginning of last September PL stock has performed quite decently (+12% abs and +2% rel) and the market is now pricing in a corporate action with 70% probability (vs. 20% incorporated previously). We believe that such an event remains the major catalyst on the stock - which is trading at a P/BV multiple of 1.69x. We expect an M&A deal to materialize by the end of 2006 because we believe PL will take part in a broader process of consolidation of the co-operative banking sector, which could be triggered by a corporate action on Banca Popolare Italiana. Given the limited upside potential remaining vs. our target price ( 16.4), we are downgrading PL from Buy to ACCUMULAT. STOCK DATA PRIC PRFORMANC Bloomberg Code PL IM 1M 3M 12M 52-week range Absolute Daily Volumes (mn) 373,000 Rel. to BCI Index Giovanni Razzoli, CFA g.razzoli@eurosim.it CAPITALISATION FORCASTS/VALUATION 12/ /2006 Market Cap. 723 mn ADJ. PS ( cents) Core Tier1 (%) 8.9 ADJ. P/ Free Float 100% P/BV Shares Outstanding (mn) 47 ADJ. RO (%) IMPORTANT DISCLOSURS APPAR AT TH BACK OF THIS RPORT

2 Banca truria March 6, UPDAT OF TARGTS PL has presented its business plan update, setting definitely higher-than-expected net profit targets for 2006 ( 44 mn vs. 37 mn) and substantially in line for 2007 ( 47 mn vs. 45 mn corresponding to Adj. RO in excess of 9%). The main difference between the business plan and our forecast is 2% higher annual total income growth (12%) and we believe a better outlook for Loan Loss Provisions (our estimates stand at 65 bps). Management did not provide any detail on volume growth but we would expect an upgrade of BP targets - especially as far as lending growth is concerned following 2005 strong performance (+14% YoY). The old targets would imply only modest 5% growth. We have therefore upgraded our 2006 loan growth from 4.7% to 7% and net profit by 5% to 39 mn. Our 2006 estimates remain 13% lower than company targets probably because of a more bearish stance for LLPs. BUSINSS PLAN TARGTS VS OUR STIMATS ( mn) CAGR Our est. Company T Our est. Company T Our est. Company T Interest income % 11.0% Non-interest income % 14.0% Total income % 12.1% Operating costs % 7.3% Operating profit % 22.1% Net profit % 45.0% Customer loans 4,783 5,118 4,998 5,425 5, % 5.4% Adj. RO 5.3% 8.0% 9.0% 9.2% 9.4% - - Tier 1 ratio (%) 8.9% 8.9% 9.8% 8.8% 9.7% - - Cost/income ratio (%) 69% 60.6% 65.3% 58.5% 63.2% - - Implied multiples (x) Adj. P/ P/BV Source: Company data & uromobiliare SIM estimates PL also presented the strategic guidelines for three product factories whose business should be developed over the next few years, i.e. leasing, P&C insurance, and personal loans obviously exploiting the bank s captive base (350k mass customers and 8,700 small businesses). We believe these activities contribution to BP targets will, however, be minor as major expertise is required to develop such businesses profitably (particularly in the case of personal loans and P&C). Together with the development of the new product factories, PL has also introduced a more tightly meshed branch network organisation. This groups PL branches (165 today) into 11 districts which should enjoy a certain degree of commercial independency from headquarters. DISPOSAL OF FAs NTWORK PL also announced sale to Banca Lombarda of its financial advisor network consisting of 185 professionals with total collections of 670 mn for goodwill of 28 mn. The multiple on total assets (some 4%) is slightly higher than the average of the latest deals (around 3%). The news is positive in our view, as hidden value has emerged from an asset from which PL would have been unlikely to extract value, given issues of size, economy of scale, and business model. IMPORTANT DISCLOSURS APPAR AT TH BACK OF THIS RPORT BANCA TRURIA DISPOSAL OF FAs NTWORK: DTAILS OF TH TRANSACTION ( mn) FAs (#) 185 Average Assets per FA 5.6 Total Direct Collection 135 Total Indirect Collection 539 Mortgages 129 Goodwill paid 28 Goodwill / Total Collection (%) 4.1% Goodwill / Indirect Collection (%) 5.2% Source: Company data & uromobiliare SIM estimates

3 Banca truria March 6, Disposal is expected to fund expansion of PL s branch network - with some 7 branches (4% of the total) added to the present structure by the end of 2006, on top of the 3 already opened at the beginning of this year. By the end of 2007 PL expects to increase its network to 190 branches. VALUATION AND CONCLUSIONS Since our upgrade at the beginning of last September PL stock has performed quite decently (+12% abs and +2% rel) and the market is now pricing in a corporate action with 70% probability (vs. 20% incorporated previously). We believe that such an event remains the major catalyst on the stock - which is trading at a P/BV multiple of 1.69x. TARGT PRIC SNSITITIVY ANALISYS AT DIFFRNT M&A PROBABILITY LVLS (2005) Probability Target Price ( ps) Implied PBV (x) Implied PNAV (x) Potential Upside 0% % 10% % 20% % 30% % 40% % 50% % 60% % 70% % Source: Company data & uromobiliare SIM estimates We expect an M&A deal to materialize by the end of 2006 because we believe PL will take part in a broader process of consolidation of the co-operative banking sector, which could be triggered by a corporate action on Banca Popolare Italiana. Given the limited upside potential remaining vs. our target price ( 16.4), we are downgrading PL from Buy to ACCUMULAT. IMPORTANT DISCLOSURS APPAR AT TH BACK OF THIS RPORT

4 Banca truria March 6, MAIN FIGURS ( mn) 2003 % 2004 % 2005 % 2006 % 2007 % Interest Margin Change 3% 2% 16% 12% 8% Net Fees Change 10% 7% 2% 6% 5% Total Income Change 15% 3% -2% 16% 7% Operating costs Change 2% 5% 5% 2% 3% Gross Op. Profit Change 46% -1% -15% 48% 13% Net Income Change 339% 36% -25% 75% 21% Client Loans (bn) 3,508 4,168 4,783 5,118 5,425 Change 3% 19% 15% 7% 6% AUC (bn) 1,833 1,595 1,696 1,729 1,764 Change -7% -13% 6% 2% 2% AUM (bn) 1,208 1,409 1,559 1,666 1,747 Change 19% 17% 11% 7% 5% PR SHAR DATA (PS and DPS in cent) ps Change 339% 36% -30% 64% 21% Adj ps Change 244% 16% -18% 68% 21% NAVPS DPS MARKT RATIOS BRAKDOWN OF TOTAL INCOM Net interest income Net commissions Other income FFICINCY & RISKS Trading activ ities Div idends C/I ratio (%) NPLs ratio (%) P Adj P PNAV Yield (%) 1.2% 1.8% 2.2% 2.6% 2.9% OTHR DATA Adj. RO (%) NPLs (%) Coverage (%) Provisions (bp) Core Tier 1 (%) Loans / Deposits (%) 117 N/A Life Premiums n.a. n.a. n.a. n.a. n.a. Change n.a. n.a. n.a. n.a. n.a. Branches mployees 1,705 1,805 1,815 1,842 1,886 Source: Company data & uromobiliare SIM estimates 6,000 5,000 4,000 3,000 2,000 1,000 0 VOLUM TRND Client loans Client deposit IMPORTANT DISCLOSURS APPAR AT TH BACK OF THIS RPORT

5 Banca truria March 6, This publication has been prepared by Giovanni Razzoli, CFA. In the past uromobiliare SIM has published studies on Banca truria. DISCLAIMR uromobiliare SIM is distributing this publication to some 500 qualified operators today and will distribute it to unqualified operators via Borsa Italiana website as from May 5, uromobiliare SIM intends to provide continuous coverage of the financial instrument forming the subject of the present publication, with a semiannual frequency and, in any case, with a frequency consistent with the timing of the issuer s periodical financial reporting and of any exceptional event occurring in the issuer s sphere of activity. The information contained in this publication is based on sources believed to be reliable. Although uromobiliare SIM makes every reasonable endeavour to obtain information from sources that it deems to be reliable, it accepts no responsibility or liability as to the completeness, accuracy or exactitude of such information uromobiliare SIM has adopted internal procedures able to assure the independence of its financial analysts and that establish appropriate rules of conduct for them. However, it is pointed out that uromobiliare SIM SpA is an intermediary licensed to provide all investment services as per Italian Legislative Decree no. 58/98. Given this, uromobiliare SIM might hold positions in and execute transactions concerning the financial instruments covered by the present publication, or could provide, or wish to provide, investment and/or related services to the issuers of the financial instruments covered by this publication. Consequently, it might have a potential conflict of interest concerning the issuers, financial issuers and transactions forming the subject of the present publication. uromobiliare S.I.M. S.p.A. performs, or has performed in the last 12 months, the role of Member of underwriting syndicate in the capital increase operation of BANCA POP DLL'TRURIA LAZIO As on today s date it has been ascertained that, as regards the listed companies covered by the present publication, the Credem group (to which uromobiliare SIM belongs) does not have relationships of control or major shareholdings, either direct or indirect, with/in the same. However, Credem group could provide them with corporate finance services, could have issued financial instruments linked to the issuers stock and could have directors who are members of the issuers corporate bodies. In addition, it is pointed out that, within the constraints of current internal procedures, uromobiliare SIM s directors, employees and/or outside professionals might hold long or short positions in the financial instruments covered by this publication and buy or sell them at any time, both on their own account and that of third parties. The purpose of this publication is merely to provide information that is up to date and as accurate as possible. The publication does not represent to be, nor can it be construed as being, an offer or solicitation to buy, subscribe or sell financial products or instruments, or to execute any operation whatsoever concerning such products or instruments. uromobiliare SIM does not guarantee any specific result as regards the information contained in the present publication, and accepts no responsibility or liability for the outcome of the transactions recommended therein or for the results produced by such transactions. ach and every investment/divestiture decision is the sole responsibility of the subject receiving the advice and recommendations, who is free to decide whether or not to implement them. Therefore, uromobiliare SIM and/or the author of the present publication cannot in any way be held liable for any losses, damage or lower earnings that the subject using the publication might suffer following execution of transactions on the basis of the information and/or recommendations contained therein. The estimates and opinions expressed in the publication may be subject to change without notice. MOST RCNT RCOMMNDATIONS: Date Rec. Comment 15 September 2005 BUY (prev. HOLD) improved risk/reward profile 7 October 2005 BUY IMPORTANT DISCLOSURS APPAR AT TH BACK OF THIS RPORT