Consolidated Annual Report 2007

CONSOLIDATED ANNUAL REPORT 2007

A. Palladio, Palazzo Thiene (XVI century) - Historical headquarters of the Banca Popolare di Vicenza Società Cooperativa per azioni - Member of the Italian bankers association an italian interbank deposit protection fund - Parent of the Banca Popolare di Vicenza Bank- ing Group Registered office: I-Vicenza - Via Btg. Framarin, 18 - Tax Code 00204010243 - Vicenza Business Register 1858 Bank listing n. 1515 - Capital stock as of 31.12.2007 € 261,656,497.500 Banking Group 5728.1

CONSOLIDATED ANNUAL REPORT 2007

Translation from the Italian original which remains the definitive version. INDEX

Corporate officers 3 Individual and consolidated financial ratios 4 Consolidated report on operations 7 Report by the Board of Statutory Auditors 48 Balance sheet 50 Income statement 52 Statement of changes in equity 54 Statement of cash flows 58 Explanatory notes to the consolidated Financial statements 61 Attachments: Remuneration of independent auditors 309 Financial statements of consolidated companies 311 Independent Auditors’ Report 371 Balance Sheet in Euro and Us Dollars 374 Income statement in Euro and Us Dollars 376 Branch network 377

2 3 CORPORATE OFFICERS

BOARD OF DIRECTORS

Chairman * Giovanni Zonin Deputy Chairmen * Giovanni Bettanin * Marino Breganze Managing Director * Divo Gronchi Director and Secretary * Giorgio Tibaldo Director Paolo Bedoni Alessandro Benetton Mario Bonsembiante Giovanni Fantoni * Zeffirino Filippi Franco Miranda Gianfranco Pavan Paolo Sartori * Fiorenzo Sbabo Maurizio Stella Paolo Tellatin * Ugo Ticozzi * Giuseppe Zigliotto

BOARD OF STATUTORY AUDITORS

Chairman Giovanni Zamberlan Acting Auditors Giacomo Cavalieri Laura Piussi Alternate Auditors Giuseppe Mannella Marco Poggi

BOARD OF ARBITRATORS

Chairman Gianfranco Corà

Acting Arbitrators Gian Paolo Boschetti Pierantonio Maule

Alternate Arbitrators Altegrado Zilio

General Manager Samuele Sorato Deputy General Manager Franco Tonato Deputy General Manager Mauro Micillo Deputy General Manager Emanuele Giustini

* Members of the Executive Committee.

3 INDIVIDUAL AND CONSOLIDATED FINANCIAL RATIOS

5 BANCA POPOLARE DI VICENZA GROUP

Balance Sheet (in thousands of Euro)Costi 31/12/2007 31/12/2006 Net total assets 27,254,619 23,750,074 Net total loans 22,880,288 18,865,621 Equity 2,742,882 2,335,115

Balance Sheet (in thousands of Euro)Costi 31/12/2007 31/12/2006 Direct deposits 19,483,539 17,379,154 Loans and advances to customers 20,839,193 17,129,972

Income statement (in thousands of Euro)Costi 31/12/2007 31/12/2006 Net interest income 589,836 521,163 Net interest and other banking income 877,166 881,430 Net income from financial and insurance activities 735,722 761,583 Net income (loss) for the year 113,731 144,502

Financial ratios (%)Costi 31/12/2007 31/12/2006 Net income (loss) for the year / Equity 4.15% 6.19% Net income (loss) for the year / Net total assets 0.42% 0.61% Net income from financial and insurance activities / Net total assets 2.70% 3.21% Equity / Net total assets 10.06% 9.83% Equity / Net total loans 11.99% 12.38%

5 BANCA POPOLARE DI VICENZA PARENT COMPANY

Balance Sheet (in thousands of Euro)Costi 31/12/2007 31/12/2006 Net total assets 21,411,027 17,536,287 Net total loans 17,629,767 13,997,441 Equity 2,783,607 2,347,771

Balance Sheet (in thousands of Euro)Costi 31/12/2007 31/12/2006 Direct deposits 13,884,771 12,393,895 Loans and advances to customers 14,912,681 12,035,469

Income statement (in thousands of Euro)Costi 31/12/2007 31/12/2006 Net interest income 355,272 312,919 Net interest and other banking income 582,679 590,637 Net income from financial activities 470,473 496,554 Net income (loss) for the year 110,090 120,025

Financial ratios (%)Costi 31/12/2007 31/12/2006 Net income (loss) for the year / Equity 3.95% 5.11% Net income (loss) for the year / Net total assets 0.51% 0.68% Net income from financial activities / Net total assets 2.20% 2.83% Equity / Net total assets 13.00% 13.39% Equity / Net total loans 15.79% 16.77%

6 BANCA POPOLARE DI VICENZA BANKING GROUP Consolidated Report on Operations during 2007

The year 2007 will probably be remembered for the subprime mortgage crisis and its major repercussions on international financial markets and the real economy, which showed visible signs of slowing in the last part of the year. In Europe, the tension on markets translated into a genu- ine crisis of liquidity and confidence, which continues, causing interbank rates to reach a level not seen in the recent past. The Italian economy, after emerging from a long period of stagnation in 2006, gradually lost momentum in 2007, with a marked slowdown towards year end.

Despite this troubled context, the Banca Popolare di Vicenza Group has confidently pursued its growth strategy and objectives, based on the guidelines announced by the Board of Directors at the end of 2006. In fact, the Plan for 2007-2008 envisaged a sharp acceleration in the growth process, both by internal and external means. In terms of internally-led growth, Group banks were involved throughout the year in carrying out the ambitious program of new branch openings. Banca Popolare di Vicenza opened up 25 new branches, located in the regions of Veneto and Friuli and in the strategically important regions of Emilia Romagna and Lombardy. Cariprato carried on diversifying and strengthening its network in provinces adjoining its traditional stronghold in the province of Prato, opening 12 new branches. Lastly, Banca Nuova opened 3 branches in the region of Lazio (in Rome, Frosi- none and Latina), serving to strengthen this bank’s presence even more in this region. Internally- led growth has resulted in the opening of 40 new branches for the Group as a whole, meaning that the branch network is 7.6% larger than it was in 2006.

In terms of externally-led growth, an important strategic and business alliance was made between Banca Popolare di Vicenza and Cattolica Assicurazioni in January, becoming fully effective from September 2007 after obtaining all the required approvals from the Supervisory Authori- ties; this alliance is designed to create a strategic partnership in the provision of insurance, banking and financial services, with each of the partners retaining their respective independence. In particular, the agreement between Cattolica Assicurazioni and Banca Popolare di Vicenza, with an initial duration of five years and automatic renewal for a further five, has involved (a) the Par- ent Bank taking an 8% interest in Cattolica Assicurazioni, by subscribing to the first tranche of a reserved capital increase (at 31 December 2007 the Parent Bank’s interest was 11.8% while the Group’s was 12.7% as a result of having bought shares directly on the market), and (b) agreements to dispose of interests in certain “product companies”, allowing the pooling of respective specialist skills in the life and pensions business, the loss insurance business, asset management services for institutional and private customers and the placement of banking products. The agreement with Cattolica Assicurazioni has also required the various companies involved in the partnership to enter into commercial agreements relating to the distribution of life and loss insurance products, to asset management and to the sale of banking products through a new credit mediation company called Cattolica-BPVI Mediazione Creditizia S.p.A., in which BPVI and Cattolica each have a 50% stake. Externally-led growth also received a big boost towards the end of 2007 after acquiring 61 branches in the provinces of Brescia (37 branches) and Bergamo (24 branches) from UBI Banca. This operation has allowed the Group to strengthen its presence in Lombardy, thereby creating a continuous link in this area sitting between the provinces of Verona and Milan. The acquisition of these 61 branches has also made it possible to reach in advance the target contained in the Growth Plan for 2007-2008 of 624 branches by the end of 2008, while also pursuing the Plan’s other goals which entail expanding into highly attractive areas and diversifying risk by extend- ing operations outside the Group’s traditional markets. Based on the provisional balance sheets of these branches at 31 December 2007, their total loans and deposits amount to 2,050 million euro, of which 470 million euro in direct deposits, 892 million euro in indirect deposits and 688 million in loans. The acquisition became effective on 31 December 2007, having obtained the necessary approvals from the Supervisory Authorities. The Group also took up a number of interesting opportunities in terms of equity investments, amongst which the acquisition of an initial 38.88% interest (47.44% at 31 December 2007) in 7 Farbanca S.p.A., a company specialized in offering banking services to the pharmacy sector. This operation, designed to strengthen the Group’s position in the health-care sector, will make it possible to reap important synergies with Farmanuova, a company 30% owned by Banca Nuova which operates in Sicily by providing loans to pharmacies and other recognized health-care operators. Other strategically important initiatives on this front have included the agreement made at year end to sell the entire 47.96% interest in Linea S.p.A., no longer deemed strategic, to Compass S.p.A. (Mediobanca Group) for 194 million euro, valuing the company at 405 million euro. The Group will nonetheless continue to have a presence in the consumer credit sector by distributing Linea’s products and through Prestinuova, a wholly-owned subsidiary specializing in loans secured against “one-fifth of salary”. The need to have an appropriate level of capital adequacy in relation to the Group’s recent expansion and to support its future development plans, has resulted in the preparation of a capital strengthening program, recently approved by the Parent Bank’s Board of Directors and designed to ensure continuous and complete observance of the various supervisory ratios at a group level. This program has involved issuing around 200 million euro in lower tier 2 subordinated bonds, which were placed with institutional investors in December 2007. Also in this regard, the Parent Bank’s Board of Directors voted on 15 January 2008 to request the next Stockholders’ Meeting to approve a new authority, after cancelling the previous one given in 2005 to the extent not exercised, for the Board to increase capital stock for cash by up to 62,250,000 euro at par in one or more blocks for a maximum period of three years from the date of the resolution. Other capital strengthening measures already taken in 2007 included the virtually full conversion (97%) in January of the bond known as “Banca Popolare di Vicenza 3.a Emissione 2003-2009 Convertibile Subordinato”. This conversion strengthened the Group’s capital by 291 million euro (split between “Capital stock” and “Additional paid-in capital”), while giving investors a total return of over 14%, including the coupon maturing on 31 December 2006. The success of this operation led the Parent Bank’s Board of Directors, in its meeting on 6 February 2007, to decide, under the authority granted by the Extraordinary Stockholders’ Meeting on 13 No- vember 2004, to issue another subordinated convertible bond under the name “Banca Popolare di Vicenza 13.a Emissione 2007-2015 Subordinato Convertibile” for a total amount of over 250 million euro. This bond was fully subscribed at the end of July 2007, being almost 3 times over- subscribed, confirming once again the stockholders’ high level of consideration for and confidence in the bank. A capital increase for new stockholders was carried out in the last part of the year for a total value of 145 million euro, all of which subscribed.

Lastly, major efforts were devoted during the year to strategically important projects for revising the organizational structures and operating systems of the business units, and the systems for managing and controlling risks, also by taking advantage of the opportunity offered by the significant changes currently taking place in the regulatory environment. Of particular note were the projects for defining and carrying out the necessary measures to make the Group’s banks and companies compliant with Basel II and MiFID (Market in Finan- cial Instruments Directive). The mission and organizational model of the Finance desk was defined as a result, while the organizational structure of the head office market units was revised. Standard & Poor’s and Fitch Ratings, both rating agencies, confirmed their positive rating, reflecting their belief that the Group’s good results achieved in the recent past will continue in the medium term, despite the slight expected deterioration in performance as a result of carrying out the described expansion plan.

Starting from October 2007 the Parent Bank underwent a general inspection by the Bank of Italy. This inspection ended in March 2008 and the Bank of Italy will publish its related Inspec- tion Report in coming months.

8 9 Group structure

The principal actions involving equity investments during 2007 are described below, some of which were mentioned earlier.

Partnership agreement with Cattolica Assicurazioni

The agreement between Banca Popolare di Vicenza and Cattolica Assicurazioni has involved Cattolica acquiring 50% of Berica Vita for 20.9 million euro (valuing the company at 41.8 million euro) and 50% of Vicenza Life for 23.2 million euro (valuing the company at 46.4 million euro). With regard to loss cover, the agreement required BPVI to acquire 50% of ABC Assicura, the Cattolica Group’s loss insurer, for 5.2 million euro (valuing the company at 10.4 million euro). In terms of asset management services, BPVI acquired 50% of Verona Gestioni SGR for 20.5 million euro (valuing the company at 41.0 million euro), while Cattolica acquired 50% of B.P.Vi Fondi SGR for 29 million euro (valuing the company at 58 million euro). Having obtained all of the required approvals from the supervisory authorities, the process of making the strategic partnership in the field of insurance, banking and financial services fully op- erative was completed on 5 September 2007. In particular, as envisaged in the Final Agreements, all of the requisite paperwork was signed to pool their respective specialist skills in the life and pensions business, the loss insurance business and in asset management services for institutional and private customers. As already mentioned, the agreement with Cattolica Assicurazioni has also required the various companies involved in the partnership to enter into commercial agreements relating to the distribution of life and loss insurance products, to asset management and to the sale of banking products through a new credit mediation company called Cattolica-BPVI Mediazione Creditizia S.p.A., in which BPVI and Cattolica each have a 50% stake. After registering this company with the Bank of Italy, this company started operating in December 2007.

Acquisition of equity investment in Farbanca S.p.A.

Following the acquisition by Banca Nuova of a 30% interest in Farmanuova S.p.A. during 2006, the Group strengthened its presence in the health-care sector in July 2007 when BPVI acquired a 38.88% interest (19.33% from Intesa San Paolo and 19.55% from Cassa di Risparmio di Cento) in Farbanca S.p.A., for 18.7 million euro. This operation strengthens the Group’s position in the health-care sector and will make it possible to reap important synergies with Farman- uova, a company which operates in Sicily by providing loans to pharmacies and other recognized health-care operators Farbanca is an on-line bank formed in 1998 by a group of pharmacists, mainly in Emilia Ro- magna, to offer banking services to pharmacies. At 31 December 2007, this company had around 30 employees, about 206 million euro in net loans to customers, of which 89% were made to pharmacies in 11 regions, and total funding of about 91 million euro. Net income for the year was over 1.5 million euro, reporting an increase of more than 50% on 2006. Following the 38.88% initial investment, other shares were acquired in this company during the year, taking the total interest to 47.44% at 31 December 2007.

Acquisition of a controlling interest in Nuova Merchant S.p.A.

In May 2007, BPVI acquired 80% of Nuova Merchant S.p.A. for 1.2 million euro. This merchant bank is dedicated to supporting and developing business projects in central and southern 8 9 Italy. As a consequence, the Bank holds a direct and indirect, 100% interest in Nuova Merchant (20% was already held by Banca Nuova). The subsidiary’s stockholders voted in December 2007 to increase capital stock for cash in order to strengthen its capital and financial position. This capital increase has required BPVI and Banca Nuova to make investments of 480 thousand euro and 120 thousand euro respectively.

Acquisition of Monforte 19 S.r.l.

In May 2007 BPVI purchased 100% of Monforte 19 S.r.l., a company which owns a prestigious building in Via F. Turati, Milan, which has served as offices for Solvay Société Anonime, its current tenant, since 1928. BPVI has invested 13.1 million euro in equity, as well as refinancing 29.4 million euro of the company’s debt.

Commencement of operations by NEM 2 Sgr S.p.A.

On 24 April 2007 the Supervisory Authorities authorized NEM Sgr S.p.A., a company formed at the end of 2006 as part of the joint venture between Nordest Merchant and 21 Investimenti, to provide collective asset management services through the creation and management of speculative funds. As stated in its program of activities, in May 2007 the Board of Directors of NEM 2 Sgr launched “Fondo NEM Mezzanine”, a closed-end mutual fund for accredited investors, whose assets, fixed at 40 million euro, will be invested in mezzanine financing, designed to provide financial support to businesses, especially unlisted ones operating in Italy, as part of extraordinary financing measures.

Sale of interest in Linea S.p.A.

At the end of 2007, the lapse of the strategic interest behind the Group’s joint acquisition with Banco Popolare of control of this company and the appearance of an attractive sale opportunity, led BPVI to make an agreement on 24 December 2007 to sell its 47.96% interest to Compass S.p.A. (Mediobanca Group) for 194 million euro, valuing this company at 405 million euro. Banco Popolare made a similar agreement in relation to its interest. The transfer of the controlling interest in Linea, subject to authorization from the competent authorities, will be completed during 2008. The BPVI Group will nonetheless continue to have a presence in the consumer credit sector by distributing Linea’s products and through Prestinuova, a wholly-owned subsidiary specializing in loans secured against “one-fifth of salary”.

10 11 Scope of consolidation

At 31 December 2007 the Banca Popolare di Vicenza Banking Group was comprised as follows: – Banca Popolare di Vicenza S.C.p.A. - Parent Bank – Banca Nuova S.p.A. – Cassa di Risparmio di Prato S.p.A. – Farbanca S.p.A. – B.P.Vi. Fondi SGR S.p.A. – Nordest Merchant S.p.A. – NEM SGR S.p.A. – NEM 2 SGR S.p.A. – Nuova Merchant S.p.A. – BPV Finance (International) Plc – Servizi Bancari S.p.A. – PrestiNuova S.p.A. – Immobiliare Stampa S.p.A. – Verona Gestioni SGR S.p.A.

The consolidated financial statements of the Banca Popolare di Vicenza Group as of 31 Decem- ber 2007 therefore comprise, as required by IAS 27, the financial information reported by the Parent Bank and its direct and indirect subsidiaries and associated companies: 1) consolidated line-by-line: – Banca Popolare di Vicenza S.C.p.A. - Parent Bank – Banca Nuova S.p.A. – Cassa di Risparmio di Prato S.p.A. – Farbanca S.p.A. – B.P.Vi. Fondi SGR S.p.A. – Nordest Merchant S.p.A. – NEM SGR S.p.A. – NEM 2 SGR S.p.A. – Nuova Merchant S.p.A. – BPV Finance (International) Plc – Servizi Bancari S.p.A. – PrestiNuova S.p.A. – Immobiliare Stampa S.p.A. – Verona Gestioni SGR S.p.A. – Monforte 19 S.r.l.

2) measured using the equity method: – Berica Vita S.p.A. – Vicenza Life Ltd – 21 Investimenti Partners S.p.A. – Magazzini Generali Merci e Derrate S.p.A. – Farmanuova S.p.A. – SEC Servizi S.C.p.A. – ABC Assicura S.p.A. – Interporto della Toscana Centrale S.p.A. – Otto a Più Nuovi Investimenti SGR S.p.A.

10 11 The Banca Popolare di Vicenza Group’s scope of consolidation at 31 December 2007 includes a number of changes since 31 December 2006, particularly as a result of the agreement made with Cattolica Assicurazioni. In particular, this has involved: • the first-time consolidation of Verona Gestioni SGR S.p.A. (line-by-line) and ABC Assicura S.p.A. (equity method); • consolidating Berica Vita S.p.A. and Vicenza Life Ltd at equity after selling 50% of both these companies (previously consolidated line-by-line).

After BPVI purchased 80% of Nuova Merchant S.p.A., this company has been consolidated line-by-line (previously consolidated at equity) Farbanca S.p.A. and Monforte 19 S.r.l. have also been consolidated for the first time, both on a line-by-line basis. In compliance with the requirements of IFRS 3, these companies have been consolidated for income statement purposes from their acquisition date or until their disposal date.

With reference to Linea S.p.A., following the agreement made on 24 December 2007 to sell the entire 47.96% interest to Compass S.p.A. (Mediobanca Group), the related equity investment has been reported under “Non-current assets and disposal groups held for sale” in compliance with IFRS 5.

Temporary investments held as part of merchant banking activities and insignificant interests have been excluded from the scope of consolidation, even though the holdings exceed 20% of capital, and are classified as “financial assets available for sale” (note that insignificance relates to the effect of exclusion on the financial and operating structure of the consolidated financial statements, with regard to potential line-by-line consolidations, and on the components of equity, with regard to potential measurement using the equity method).

The balance sheets and income statements used for consolidation purposes (line-by-line, proportional, equity method) are those approved by the Boards of Directors of the individual companies as of 31 December 2007. These statements have been adjusted, where necessary, to align them with proper and consistent accounting policies adopted by the Group. The investments in Interporto della Toscana Centrale S.p.A.1 and Magazzini Generali e Derrate S.p.A. have been reported using the equity method with reference to their 2006 financial statements, while the holdings in 21 Investimenti Partners S.p.A. and Otto a Più Nuovi Investimenti SGR S.p.A. have been carried at equity with reference to their preliminary results at 31 December 2007, not yet approved by their respective Boards of Directors.

The financial statements of companies consolidated line-by-line whose reporting formats differ from those established in Circular 262 of 22 December 2005, which completes the adoption of IAS/IFRS by the banking sector, have been reclassified for consistency with the accounting policies adopted by the Parent Bank.

1 Although the interest in the company’s equity exceeds the carrying amount of the investment, the company has report losses in recent years and, for the sake of prudence, its carrying amount has not been adjusted. 12 13 The scope of consolidation as of 31 December 2007 is summarized below:

LINE-BY-LINE BANCA POPOLARE DI VICENZA CONSOLIDATION S.C.p.A.

99.59% 99.99% BPV Finance Banca Nuova S.p.A. (International) Plc 88.67%

PrestiNuova S.p.A. 6.33% 50% Verona Gestioni SGR S.p.A.

CariPrato S.p.A. 79% 100% Immobiliare Stampa S.p.A.

20% Nuova Merchant S.p.A. 80% 100% Monforte 19 S.r.l.

Nordest Merchant S.p.A. 80% 20% 100% Servizi Bancari S.p.A.

1 0 0 % NEM SGR S.p.A. 50% B.P.VI Fondi SGR S.p.A.

1 0 0 % NEM DUE SGR S.p.A.

Farbanca S.p.A. 47.44% 0.10%

1.66% SEC Servizi S.C.p.A. 47.04% CONSOLIDATION AT 1.02% EQUITY

1.00% 49% Berica Vita S.p.A. 50% Vicenza Life Ltd

20% Interporto della Toscana 20% Otto a Più Nuovi Investimenti S.p.A. SGR S.p.A.

30% 21 Investimenti Farmanuova S.p.A. 20% Partners S.p.A.

50% Magazzini Generali, Merci 25% ABC Assicura S.p.A. e Derrate S.p.A.

12 13 Overview of the macroeconomic situation

The following is a brief summary of the main events influencing the market conditions in which the Group operated during 2007. Reference should be made to the report on operations presented together with the Parent Bank’s financial statements for a more detailed analysis of the macroeconomic scenario in Italy and abroad, as well as for an analysis of developments in the banking market.

Macroeconomic conditions in 2007 were influenced by the following dynamics:

• The international economic and financial scenario in 2007 was heavily influenced by the US property crisis associated with subprime mortgages and by its negative repercussions on financial markets and economic growth. The US economy reported a sharp fourth-quarter slowdown in GDP (+0.6% versus +4.9% in the third quarter), taking the annual average to +2.2%, its lowest level since 2002. The consequent contraction in American consumption is a cause for concern in Europe and also in Italy, especially because of the consequences for exports (the US market accounts for around 7.55% of Italy’s total exports), which were already heavily penalized by the euro’s steep rise against the dollar to a rate of over 1.50. A second key feature of the international scenario is the big increase in primary energy and food prices, due to many factors, amongst which the soaring oil price and strong demand by emerging countries. Despite signs of a slowing in world economic activity, the vigorous expansion by emerging economies, like China and India, does not appear to be waning.

• As for the Euro area, estimated fourth-quarter GDP growth was slower than in previous quarters (+2.2% versus +2.7% in the third quarter), while for the year as a whole average GDP growth was 2.6% compared with 2.9% in 2006. The most recent economic data con- firms a slowdown in industrial output, reflecting expectations for a worsening in the economic situation, especially as a result of a contraction in capital spending, weaker foreign demand, the rising euro, the steep hikes in energy prices and instability on financial markets. Euro-zone consumer prices rose by an average of 2.1% in 2007, with an accelerating trend towards year end, when December’s inflation rate reached 3.1%.

• The downturn in the US economy, the strengthening of the euro, the recent inflationary trends and the consequent negative impact on the growth in consumption are also having a negative impact on the Italian economy. Italy’s GDP is estimated to have risen by 1.5% in 2007 (compared with +1.9% in 2006), which is still below the European average and reflects the country’s continued difficulty in terms of boosting consumption and industrial output. The higher price of food and energy has produced a sharp increase in inflation in Italy as well. The annual inflation rate rose to 2.6% in December (national general index), reaching +3.0% in January 2008, the highest level since July 2001. Price inflation in Italy is nonetheless, for the time being, lower than in other European countries: the harmonized consumer price index for European comparison purposes reported a rate of +2.8% for Italy in December compared with +3.1% for the euro-zone as a whole (in January the harmonized index for Italy rose to +3.1% versus a European average of +3.2%). Despite all this, the Italian economy does present some positive aspects. These include a reduction in the trade deficit, thanks to the growth in exports to European countries (+5.3% in November on the prior year, while -4.6% to countries outside the European Union), taking the trade deficit to 53 million euro, down from 932 million euro in 2006, and a growth in jobs (+1.8% in the third quarter of 2007) with around half of the increase benefiting from higher export demand. But the real positive surprise of 2007 was the public sector deficit. Based on the latest figures published by ISTAT (Italy’s central statistics office), the public sector budget deficit 1.9% of GDP in 2007, compared with 3.4% in the corresponding period of 2006, the 14 15 lowest level since 2000. This positive result reflects a growth in receipts and lower spending, while total public sector debt went below 105% of GDP, from 106.8% a year earlier.

• Turning to the economic situation in the areas in which the Group operates, the principal indicators for the Veneto region’s economy continued to improve, unlike in the rest of Italy. Fourth-quarter industrial output increased by 1.9% on the same period the year before. This expansion was reported in virtually all sectors of economic activity, particularly those of “rub- ber and plastics”, “electric and electronic machines” and “paper, printing and publishing”. The positive results reported in the last quarter of the year appear to be particularly attributable to a recovery by small businesses (with less than 10 employees), whose output grew by 1.4% having dropped by 2.0% in the previous quarter. Large and medium enterprise also performed well, even if at a slightly less robust pace than in the first nine months, probably indicating a period of stabilization rather than slowdown. Other economic indicators were also positive, such as sales which grew by 2.5% in the fourth quarter, albeit at a slightly slower pace than in the first nine months. The improvement in the economic situation also benefited employment: the number of jobs increased by 0.6%, thanks to the positive contribution of small enterprise, where the number of employees grew by 1.3% due to a visible increase in foreign labour. Instead, the textiles, clothing and footwear sector reported another negative quarter in terms of jobs, losing -2.3% in the fourth quarter; similarly, the rest of manufacturing industry (including the gold sector) lost 2.6% jobs.

• With regard to the province of Vicenza, manufacturing industry enjoyed a moderate fourth- quarter recovery, with all the principal economic indicators reporting positive year-on-year results (industrial output +1.6%, sales +2.3%, employment +1.7%). The recovery in output, orders and sales appears to be driven both by medium and large enterprise and those with less than 10 employees. In terms of individual sectors, manufacturing did well, representing the driving force of the Vicenza economy throughout 2007, as did the textiles-clothing and tanning sector, which nonetheless continues to lose jobs as a result of restructuring with a shift to higher value-added products using less labour. The difficulties experienced for over three years in the gold and jewellery sector continued in 2007, with forecasts for another contraction in the first half of 2008 in terms of output, sales and jobs.

• In Friuli Venezia Giulia the uptrend beginning at the start of 2006 stabilized about mid-way through 2007 and then slowed in the last part of the year, even though the overall picture is generally positive especially compared with the national one. In fact, the fourth-quarter economic indicators reported year-on-year growth, but at a lower rate than in the third quarter. In particular, industrial output reported a slight fall, going from +4% in the third quarter to +3.5% in the fourth quarter. Exports were also slower (down from +7.3% to +3.1%) although still encouraging, while domestic sales increased (from +3% to +4.8%), helping keep overall sales at about the same level as in the previous survey (+4.6%). As regards the most important sectors of the regional economy, “mechanical” industry performed in line with the general trend discussed above, while the “wood” industry showed a few signs of distress, both in terms of output and sales. In terms of the region’s individual provinces, all the economic indicators for Udine were lower than the regional average, while Pordenone confirmed itself as the driver of Friuli’s economy. Businesses are forecasting a stable economic situation in the first half of 2008, reflecting the spread of less optimistic expectations about the future.

• The Tuscan economy followed the unstable trend of the national economy: in fact, the first half reported a good recovery in the economic cycle, while the second half of the year saw a general slowing in growth. Industrial output grew by just over 1% for the year, with second- half growth visibly lower than in the first half. This slowdown reflects growing difficulty in selling the region’s output both domestically and abroad. Exports were hurt by the stronger euro, making products less price competitive. Domestic demand also showed signs of weak-

14 15 ening, with fewer orders originating from the domestic market. The overall situation in 2007 was very similar to that at the end of 2006, with regional GDP growing by 1.7%. The manufacturing sector reported the most evident slowdown, especially because of continued difficulties for some of its important sectors like the fashion one. The textiles and clothing sectors, as well as those of hides, leather and footwear all reported a contraction on the prior year. Instead, the mechanical, chemicals and pharmaceuticals sectors continued to grow, confirming the gradual transformation of the Tuscan economy that has been taking place for a number of years. In terms of size, large enterprise continued to drive regional output, while the hard times for small enterprise did not yet appear to be over. The number of jobs grew by 2.8% year-on-year in the third quarter, corresponding to around 43 thousand jobs, thanks to the significant contribution to growth by the legal immigrant population. The unemployment rate declined from 4.3% a year ago to 3.6%, which was lower than the national average. The Prato district was in difficulty, reporting negative trends both in industrial output and sales.

• The Sicilian economy was relatively more depressed than the national one. In fact, regional GDP is estimated to have grown below the national average. The causes of this downturn include ongoing caution in household consumer expenditure. The most dynamic sectors in 2007 were agriculture, manufacturing and construction. The growth in value added of the service sector was lower than the regional average in the past two years. The renewable energy sector was particularly robust: apart from an increase in the number of wind turbines for generating electricity, there has been growing demand for the installation of photovoltaic systems both by private individuals and firms. There are still signs of crisis in the textile-clothing sector, which continues to suffer from strong competition by Chinese and East European firms and not even the relocation of certain factories to North Africa has allowed a full recovery in competitiveness. Stagnant consumption, caused by lower purchasing power by Sicilian households, and the expansion of mass retailers, principally in the Catania area, have worsened the crisis in the retail trade. The information on Sicilian firms reported by the Chambers of Commerce reveals that there were 0.2% fewer active businesses during 2007 than in the prior year. This goes against the trend reported in the previous three years. In terms of individual provinces, the number of businesses was higher in Enna, Palermo and Messina but lower elsewhere. The latest available figures relating to the first half of 2007 reported a drop in the number of tourists, after three years of growth. In fact, the number of tourists in Sicily decreased by 1.7% on the year before, although the number of person-days was largely the same. This trend reflects a decrease in the number of Italian tourists, even if the number of foreign tourists continued to increase.

• As regards monetary policy, central banks had to deal with an extremely difficult situation in 2007, having to take delicate decisions in a contradictory environment, in which economic slowdown was accompanied by renewed inflationary pressures; the ECB adopted a prudent stance, based on countering the strong inflationary pressures as far as possible: in fact, the refinancing rate on repurchase agreements was kept at 4%.

• Greater concerns about US growth, confirmed in the fourth-quarter GDP figures, and the stock market crisis led the FED to react decisively on several occasions in the last quarter of 2007 and particularly in January 2008, by reducing the benchmark Fed Funds rate from 5.25% in August 2007 to 3% at the end of January 2008. The Federal Reserve is hope that by easing US monetary policy, it will encourage moderate economic growth and support exports, helped by further depreciation of the dollar, and stimulate renewed consumption by making it easier for households to access credit.

16 17 • As far as equity markets are concerned, 2007 was a mixed year for the Italian Stock Ex- change. Trading continued to increase, both in terms of the number of contracts and their value, as did the number of listed companies, which reached a record level of 344 companies, but overall performance was down, with the market losing 7% after 4 years of growth. This negative result, in contract with that of other major European markets (Standard & Poor’s 500 +3.5%, Dax30 in Frankfurt +22.3%, Cac40 in Paris +1.3%, FTSE in London +3.8%) mainly reflected the Italian market’s heavy concentration in the banking sector (45% versus 30% in industry and 25% in services).

• The growth in bank lending continued apace in 2007; at the end of 2007 total lending by Ital- ian banks was 9.9% higher over the year; this nonetheless high rate was slightly down both on previous months and on the end of 2006 (+10.9%). The growth in lending continued to reflect demand for long-term loans (+11.8% year-on- year, the same as in December 2006) and, but less so, for short-term loans (+6.6% year-on- year compared with +9.3% in December 2006), which nonetheless reported a slowdown in December relative to other months of the year.

• The quality of lending by the banking system continued to be high, as witnessed by the ratio of net non-performing loans to total net lending, which was 1.1%, very similar to that reported at the end of 2006. Even gross non-performing loans grew at a very low rate of just 0.5%, down from +3.9% at the end of 2006.

• The growth in funding by Italian banks (deposits, repurchase agreements and bonds) started to slow in the second half of the year, mostly due to a decline in deposits, so that by December 2007 the year-on-year increase was 6.6% compared with +8.5% at the end of 2006. The bond component continued to grow apace, reporting +12.1% at the end of 2007, while certificates of deposit continued to decline (-11%). Funding from abroad continued to be very dynamic, growing by around 23% year-on-year: in December funding from abroad accounted for 30% of total funding (including foreign funding) compared with 27% at the end of 2006.

• As for indirect funding, the overall amount of securities in the custody of Italian banks (both under management schemes or held directly by customers) was slightly higher in December 2007 (+0.8%), although this growth was lower than that reported at the end of 2006 (+3.8%). Investors demonstrated a clear preference for government securities and bank bonds at the expense of equities and mutual funds. With regard to asset management, 2007 was a particularly difficult year for the mutual funds sector with the difficulties emerging in 2006 getting worse; at the end of 2007 fund assets had shrunk by 5.8% on a year earlier to around 570 billion euro, as well as reporting a net outflow of over 53 billion euro compared with an outflow of 18 billion euro in 2006. This was largely due to a major flight from bond funds (-46 billion euro) and from equity funds (-24 billion euro), penalized by high fees and performance well below the related benchmarks. Instead, liquidity, flexible and hedge funds all reported a small increase in 2007, even if the latest figures for December show a net outflow (with withdrawals exceeding new investment) for them as well (except for hedge funds). Lastly, the October figures for asset management by Italian banks indicate a negative trend of around -12%, in deterioration relative to the -2.7% at the end of 2006.

• As a result of the ECB’s monetary policy interventions and the changed conditions on interbank markets following the subprime mortgage crisis, there was a continued general rise in lending and funding bank rates, particularly where lending rates were concerned with a slight widening of the spread. Bank lending rates saw a rise in the weighted average rate on total lending to households and non-financial companies from 5.39% at the end of 2006 to 6.17% in December 2007

16 17 (+78 basis points), while market rates (3-month Euribor) rose by 96 basis points. The higher growth in market rates (3-month Euribor) relative to bank lending rates caused the spread to be eroded over the year, amounting to 1.5 percentage points in December 2007, down about 20 basis points from 1.7 percentage points at the end of 2006. Funding rates also reported an accelerating trend since the start of the year. The rates for euro deposits applied to households and non-financial companies rose from 1.45% at the end of 2006 to 2.06% in December 2007, up 61 basis points. The average rate paid on bonds increased at a slightly faster pace, rising from 3.56% at the end of 2006 to 4.28% in Decem- ber 2007 (+57 basis points). The spread on deposits climbed throughout the year, going from 2.3% at the end of 2006 to 2.6% in December 2007 (up around 30 basis points).

• As a result of these trends, the spread calculated by ABI (the Italian Banking Association) between the average lending rate and average rate paid on deposits from households and non- financial companies was marginally higher at 3.07 percentage points in December 2007, up from 3.04 percentage points at the end of 2006.

Results of Operations

The macroeconomic background and sector performance underlying the Group’s activities are analyzed in more detail in the Report on operations attached to the individual financial statements of the Parent Bank.

Comments on the consolidated balance sheet

The consolidated financial statements as of 31 December 2007 have been prepared under IAS/IFRS, as required by Decree 38 dated 28 February 2005 and consistent with the approach taken in 2006. For the purposes of consistent comparison of the Group’s figures for deposits and loans in 2007 with those of the prior year, the amounts reported below do not include the deposits and loans of the UBI Group branches acquired on 31 December 2007. In addition, for a clearer understanding of the changes in loans to customers and in deposits from customers, the following information does not include the “operating” receivables and payables that, as required by Bank of Italy Circular 262 dated 22 December 2005, are classified in the “Due to customers” and “Loans and advances to customers” captions.

Deposits and funds under management

Funds under management, comprising direct deposits, subordinated bonds and indirect deposits, excluding those relating to the branches acquired from the UBI Group, amounted to 36,653 million euro at 31 December 2007, up 8.5% since 31 December 2006. If the direct and indirect deposits of the ex-UBI branches are included, the annual increase would rise to 12.6%.

18 19 (in thousands of Euro) 31/12/2007 31/12/2006 Change (+/-) %

Direct deposits (excluding ex-UBI branches) 19,014,003 17,379,154 1,634,849 9.4 Indirect deposits (excluding ex-UBI branches) 17,639,088 16,387,786 1,251,302 7.6

Total funds under management (excluding UBI branches) 36,653,091 33,766,940 2,886,151 8.5

Direct deposits of ex-UBI branches 469,536 – 469,536 n.s. Indirect deposits of ex-UBI branches 891,986 – 891,986 n.s.

Total funds under management by UBI branches 1,361,522 – 1,361,522 n.s.

Total funds under management 38,014,613 33,766,940 4,247,673 12.6 Given the changes in the scope of consolidation since the previous year, described earlier, the “insurance policies” of Berica Vita and Vicenza Life reported in 2006 have now been reclassified from direct deposits to indirect deposits; in addition, again for the sake of consistent comparison with 2007, bonds issued by the Parent Bank and subscribed by these insurance companies have been added back to direct deposits in 2006; this is because as from 2007 these bonds are no longer being eliminated upon consolidation now that both companies are being equity-accounted rather than consolidated line-by-line. The two components of funds under management (excluding the branches acquired from the UBI Group) increased at a broadly similar rate (+9.4% for direct deposits and +7.6% for indirect deposits), outperforming the banking industry in general. Direct deposits also benefited from bonds issued in the year on international financial markets under the EMTN program, while indirect deposits benefited from the partnership agreement made with the Cattolica Assicurazioni Group during the year.

18 19 Direct deposits

Direct deposits (excluding the branches acquired from the UBI Group) amounted to 19,014 million euro at 31 December 2007; the increase of 9.4% on the year before compared with industry growth of around +7%. If the direct deposits of the ex-UBI branches are included, the annual increase would rise to 12.1%.

(in thousands of Euro) 31/12/2007 31/12/2006 Change (+/-) %

Current accounts and unrestricted deposits 8,155,774 7,614,368 541,406 7.1 Current accounts and restricted deposits 25,178 15,153 10,025 66.2 Repurchase agreements and other payables 1,073,459 860,514 212,945 24.7 Bonds 7,827,330 6,682,313 1,145,017 17.1 Certificates of deposit and other securities 301,101 372,529 -71,428 -19.2 sub-total 17,382,842 15,544,877 1,837,965 11.8

Liabilities for assets sold but not derecognized 1,631,161 1,834,277 -203,116 -11.1

Total direct deposits (excluding ex-UBI branches) 19,014,003 17,379,154 1,634,849 9.4

Direct deposits of ex-UBI branches 469,536 – 469,536 n.s.

Total direct deposits 19,483,539 17,379,154 2,104,385 12.1 As already mentioned, for the sake of consistent comparison between the two periods, direct deposits in 2006 have been adjusted to exclude the “insurance policies” of Berica Vita and Vicenza Life, which as from 2007 form part of indirect deposits after changing the way in which these insurance companies are consolidated. Conversely, bonds issued by the Parent Bank and subscribed by these insurance companies have been added back to the 2006 figure, because as from 2007 they are no longer being eliminated upon consideration.

The changes in the different types of direct deposit confirm the trends in progress for a number of years. On the one hand, customers continued to shy away from more traditional forms of deposit (certificates of deposit and other securities: -19.2%), while on the other, the rise in interest rates reawakened private and corporate customer interest in “repurchase agreements” which climbed by 24.7%. “Current accounts and unrestricted deposits” were also higher, rising by 7.1%, while “restricted deposits” soared by 66.2%. However, it was lively demand for bonds that drove the overall growth in direct deposits and that fully made up for the decline in other technical forms. In fact, bonds issued by the Group increased by over 1.1 billion euro (+17.1%) to 7,827 million euro at 31 December 2007, corresponding to over 40% of total direct deposits. In detail, the Group made twelve bond issues during 2007 for a total of 1,815 million euro, all as part of the EMTN (European Medium Term Notes) program(), launched in December 2003 and renewed at the start of 2007 for a total of 4.5 billion euro; two issues forming part of this program reached maturity during the year and 20 21 were repaid for a total of 600 million euro. Lastly, the subordinated convertible bond known as “BPVI 3.a emissione 2003-2009” was converted at the start of 2007 into the Parent Bank’s shares worth over 291 million euro.

“Liabilities for assets sold but not derecognized” reported a natural decrease of 11.1% over the year. These relate to the “Berica 5 Residential Mbs” securitization arranged in 2004 and the “Berica 6 Residential Mbs” securitization arranged at the start of 2006 which, as discussed in the section on loans, have been “reinstated” in the balance sheet, as required by IAS 39.These represent the notes issued by the vehicle company that are backed by securitized home mortgages; the decrease in these notes reflects their repayment.

20 21 Indirect deposits

The good performance of direct deposits was matched by equally satisfying results for indirect deposits which, excluding those relating to the branches acquired from the UBI Group, rose by 7.6% over the year to 17,639 million euro, thereby outpacing average growth for the industry at large. If the indirect deposits of the ex-UBI branches are included, the annual increase would rise to 13.1%. In particular, while assets under administration rose by 16.8% and pension assets stayed generally the same, assets under management contracted by 5.7%.

(in thousands of Euro) 31/12/2007 31/12/2006 Change (+/-) %

Mutual funds 3,612,404 3,519,679 92,725 2.6 Wealth management 798,518 952,700 -154,182 -16.2 Personal asset management 664,389 908,486 -244,097 -26.9 Pension premiums 1,822,993 1,808,220 14,773 0.8 Shares 2,081,195 2,494,355 -413,160 -16.6 Other securities 4,924,385 3,637,260 1,287,125 35.4 Treasury shares 3,735,204 3,067,086 668,118 21.8

Total indirect deposits (excluding ex-UBI branches) 17,639,088 16,387,786 1,251,302 7.6

Indirect deposits of UBI branches 891,986 – 891,986 n.s.

Total indirect deposits 18,531,074 16,387,786 2,143,288 13.1 assets under management (excluding ex-UBI branches) 5,075,311 5,380,865 -305,554 -5.7 retirement savings (excluding ex-UBI branches) 1,822,993 1,808,220 14,773 0.8 assets under administration (excluding ex-UBI branches) 10,740,784 9,198,701 1,542,083 16.8 As already mentioned, for the purposes of consistent comparison between the two periods following the changes in the scope of consolidation during the year, indirect deposits in 2006 include the “insurance policies” of Berica Vita and Vicenza Life, which were previously classified in direct deposits.

Looking at the various forms of administered assets, there was a 5.8% increase in “treasury shares” (most of whose increase refers to the conversion of the “BPVI 3.a emissione 2003-2009” bond and the issue of shares reserved for new shareholders towards year end) and a 35.4% rise in “other securities” (which benefited from the partnership agreement made in the year with the Cattolica Assicurazioni Group), while other “shares” went down by 16.6% mainly as a result of last year’s negative international stockmarket performance.

With regard to assets under management, “mutual funds” were 2.6% higher while “wealth management” and “personal asset management” contracted by 16.2% and 26.9% respectively. The downturn in assets under management reflects the general disappointment of investors with this sector, which struggles to perform in line with expectations. Pension premiums were generally stable (+0.8%).

22 23 Loans to customers

Once again confirmed in 2007, the trend in loans to customers the strong growth experienced over the past few years, testifying to the Group’s continued, wide-ranging efforts in support of households and businesses in the areas where it operates.

(in thousands of Euro) 31/12/2007 31/12/2006 Change (+/-) %

Ordinary current accounts 4,099,660 3,126,308 973,352 31.1 – Mortgage loans 8,175,362 6,438,608 1,736,754 27.0 – Syndicated loans 1,650,489 1,419,290 231,199 16.3 – Import/export loans 1,299,338 1,198,788 100,550 8.4 – Other loans 2,876,882 2,766,274 110,608 4.0 – Debt securities 38,284 13,993 24,291 173.6 – Repurchase agreements 7,936 2,381 5,555 233.3 – Net non-performing loans 300,462 271,694 28,768 10.6

sub-total 18,448,413 15,237,336 3,211,077 21.1

– Assets sold but not derecognized 1,702,650 1,892,636 -189,986 -10.0

Total net loans (excluding ex-UBI branches) 20,151,063 17,129,972 3,021,091 17.6

Net loans of ex-UBI branches 688,130 – 688,130 n.s.

Total net loans 20,839,193 17,129,972 3,709,221 21.7 22 23 Net of adjustments, loans to customers (excluding the branches acquired from the UBI Group) increased by 17.6% on the prior year to 20,151 million euro at 31 December 2007.This increase was higher than the industry as a whole, which reported a 10% year-on-year growth in lending. If the loans of the ex-UBI branches are included, the annual increase would rise to 21.7%.

In terms of individual lending products, “mortgage loans” continued to grow apace, rising 27% to 8,175 million euro, now representing over 40% of total lending. All the other lending products reported increases on the prior year: “ordinary current accounts” (+31.1%), “syndicated loans” (+16.3%), “import/export loans” (+8.4%), “other loans” (+4%), “debt securities” (+173.6%) and “repurchase agreements” (+233.3%). There was a natural 10% decline in “assets sold but not derecognized”, reflecting the periodic repayment of the underlying securitized loans.

Turning to the quality of the Group’s loan portfolio, 2007 reported a slight improvement in the risk and coverage parameters relative to the prior year.

Excluding loans relating to the ex-UBI branches, impaired loans to customers (net of provisions, and including any impaired “Assets sold but not derecognized”) increased by an absolute amount of 81.3 million euro (+12.9%) at 31 December 2007, but reported’s slight decline as a percentage of total net loans.

Looking at the situation in more detail, despite a contraction in exposures overdue by more than 180 days (-19.5%), there was an increase of 37.8 million euro in non-performing loans (+13.6%), of 32.6 million euro in watchlist loans (+13.6%) and of 31.5 million euro in restructured loans (+355.4%).

Turning to the credit risk parameters, the ratio of net non-performing loans to net loans to customers (excluding the loans relating to the ex-UBI branches and including those represented by “Assets sold but not derecognized”) amounted to 1.57% at 31 December 2007, down from 24 25 1.62% at 31 December 2006. The ratio of net impaired loans to net lending improved from 3.69% at the end of 2006 to 3.54% in 2007. With regard to the other coverage parameters, meaning the ratio between provisions and gross exposure, the coverage of total impaired loans increased from 31.2% in 2006 to 32.6% at 31 De- cember 2007, mainly due to the higher provisions against non-performing loans, whose coverage ratio climbed from 41.9% in the prior year to 44.5% in 2007. Lastly, the “general provision” for “performing” loans amounted to 103.1 million euro at 31 De- cember 2007, providing coverage of 0.53%, just above that in 2006 (0.50%).

Consolidated equity and regulatory capital

The Group’s equity, including net income for the year pertaining to the Parent Bank, amounted to 2,742.9 million euro at 31 December 2007, reporting an increase of 407.8 million euro on the prior year.

(in thousands of Euro) 31/12/2007 31/12/2006 Change (+/-) %

Capital stock 261,656 230,868 30,788 13.3 Additional paid-in capital 1,963,297 1,557,856 405,441 26.0 Equity instruments 13,630 12,054 1,576 13.1 Valuation reserves 66,081 153,719 -87,638 -57.0 Reserves 324,487 236,116 88,371 37.4

Equity 2,629,151 2,190,613 438,538 20.0 Net income for the year pertaining to the Parent Bank 113,731 144,502 -30,771 -21.3

Total equity 2,742,882 2,335,115 407,767 17.5

24 25 The increase of 30.8 million euro in “capital stock” and of 405.4 million euro in “additional paid- in capital” is almost entirely due to the new shares issued at the start of the year after owners of the “BPVI 3.a Emissione 2003-2009” convertible bond exercised the option to convert, and to the capital increase reserved for new shareholders of the Parent Bank carried out towards year end.

“Equity instruments” of 12.1 million euro at 31 December 2006 related to the equity component embedded in the above convertible bond, which under IAS 32 was separated out on first-time adoption of IAS/IFRS; this amount was reclassified at the start of the year to other distributable reserves after bondholders exercised their option to convert. The amount reported at 31 December 2007 all relates to the equity component embedded in the new “BPVI 13.a Emissione 2007-2015” convertible bond, placed by the Parent Bank in July, and reported separately in accordance with IAS 32.

The reduction of 87.6 million euro in the “valuation reserves” mainly reflects the change in the reserve for the fair value measurement of “financial assets available for sale”. The “valuation reserves” also include the reserves arising from the valuation of land, buildings and works of art at fair value on the first-time adoption of IAS/IFRS, together with the reserves relating to monetary revaluation laws.

The increase of 88.4 million euro in other “reserves” reflects 79.1 million euro in allocations of prior year net income to the Group’s reserves, 12.1 million euro for the aforementioned equity component embedded in the “BPVI 3.a Emissione 2003-2009” convertible bond which after conversion was reclassified to distributable reserves, and a decrease of 2.8 million euro for other changes. These “reserves” include reserves formed from earnings and the positive and negative reserves associated with the transition to IAS/IFRS not classified in other equity accounts. They also include the former “reserve for general banking risks” recorded pursuant to Decree 87/92 which, in accordance with IAS, has been reclassified to equity.

Details of movements in the year in the Parent Bank’s shares can be found in the corresponding section of the individual Report on Operations.

The amount of the Group’s capital is adequate and provides reliable coverage of business risks, while satisfying the minimum requirements established by the Supervisory Authorities. Consolidated regulatory capital is made up as follows:

31/12/2007 31/12/2006 Change (+/-) %

Tier 1 capital 1,529,611 1,608,260 -78,649 -4.9 Tier 2 capital 906,738 714,135 192,603 27.0 Items to be deducted -29,442 -74,214 44,772 -60.3

Regulatory capital 2,406,907 2,248,181 158,726 7.1 Tier 3 capital 25,762 – 25,762 n.s.

Regulatory capital including Tier 3 2,432,669 2,248,181 184,488 8.2 As for the minimum regulatory requirements on a consolidated basis, the capital adequacy ratio is 11.42% (compared with the required minimum of 8%), while the total capital ratio (ie. the ratio between regulatory capital and total risk-weighted assets) is 9.38% (10.34% at 31 December 2006).

26 27 Cash flow statement

The following table summarizes the cash flow statement for 2007 and 2006 presented in the consolidated financial statements at 31 December 2007 and prepared on the basis of IAS/IFRS.

(in thousands of Euro) 31/12/2007 31/12/2006 Change (+/-) %

Cash and cash equivalents at the beginning of the year 155,504 142,150 13,354 9.4 Net liquidity generated (absorbed) by operating activities 134,409 120,984 13,425 11.1 Net liquidity generated (absorbed) by investing activities (470,904) (65,226) (405,678) 622.0 Net liquidity generated (absorbed) by funding activities 367,937 (42,404) 410,341 n.s.

Net liquidity generated (absorbed) in the year 31,442 13,354 18,088 135.5

Cash and cash equivalents at the end of the year 186,946 155,504 31,442 20.2

Net liquidity generated by operating activities amounted to 134.4 million euro in 2007 (121 million euro in 2006) and is the product of: – liquidity of -3,547.1 million euro absorbed by financial assets (-1,812.7 million euro in 2006) of which -4,347.8 million euro for increased loans to customers (-1,513.9 million euro in 2006, which benefited from the disposal of receivables under the “Berica 6 Residential MBS” securitization). – liquidity of 3,254.2 million euro generated by financial liabilities (1,311.2 million euro in 2006); – liquidity of 427.3 million euro generated by operations (622.5 million euro in 2006).

With reference to liquidity generated by financial liabilities, deposits from banks increased by 1,178.4 million euro, amounts due to customers by 606.8 million euro, debt securities in issue by 650 million euro and financial liabilities at fair value by 868.3 million euro. Net liquidity absorbed by investing activities amounted to -470.9 million euro in 2007 (-65.2 million euro in 2006). In particular: – liquidity generated by investing activities amounted to 79.4 million euro (9.1 million euro in 2006), of which 73 million euro from the sale of equity investments; these include the sale of 50% of the shares held in the insurance companies Berica Vita and Vicenza Life and in the fund management company BPVi Fondi, under the partnership agreement with the Cattolica Assicurazioni Group; – liquidity absorbed by investing activities amounted to -550.3 million euro (-74.3 million euro in 2006), of which -481.4 million euro related to goodwill paid to acquire 61 branches from the UBI Banca Group (net of the cash held by such branches of 6.6 million euro).

Lastly, net liquidity generated by funding activities amounted to 367.9 million euro in 2007 (-42.4 million euro in 2006), as follows: – liquidity of 436.2 million euro generated by issuing new shares (15.8 million euro in 2006); – liquidity of -68.3 million euro absorbed by paying dividends (-58.2 million euro in 2006).

26 27 Comments on the consolidated income statement

Consolidated net income for 2007 amounted to 113.7 million euro, down 21.3% on the prior year, which had benefited from an extraordinary amount of over 54.2 million euro, net of tax, for “significant non-recurring transactions”, namely the sale of all the shares held in BNL, the sale of Italease SpA and the early redemption of the “Exchangeable BNL” bond. This year’s post-tax extraordinary items amounted to 38.8 million euro, all of which due to the sale of 50% of the shares held in the insurance companies Vicenza Life and Berica Vita and in the fund management company BPVi Fondi under the partnership agreement with the Cattolica Assicurazioni Group. This result is nonetheless positive in view of the difficult and more competitive environment in which the Group had to operate, following the downward trend in financial markets in the year and the signs of trouble in the economy emerging in the second half of the year.

The resistance displayed by net interest and other banking income reflects the solidity of the Group’s fundamentals and its ability to generate earnings from its core business. This caption amounted to 877.2 million euro at 31 December 2007, just 0.5% below 2006 which had however benefited from the extraordinary contribution of “significant non-recurring transactions”.

For the purposes of understanding trends in the principal performance indicators during the year and appreciating the contribution of the various areas of the Group’s operations to net income, the different margins for 2007 are discussed below and compared with those in 2006.

The amounts included in the tables presented in the following commentary are stated in thousands of euro and the totals, determined from the whole amounts, have been rounded.

Net interest income

Captions 31/12/2007 31/12/2006 Changes (in thousands of Euro) (+/-) %

10. Interest income and similar revenues 1,256,160 951,220 304,940 32.1 20. Interest expense and similar charges (666,324) (430,057) (236,267) 54.9

30. Net interest income 589,836 521,163 68,673 13.2

Net interest income of 589.8 million euro was up by 13.2% on 2006; this reflects the increase in volumes and the spread management policies adopted by Group banks in a context of generally rising bank rates.

This is the result which most characterizes full year performance and which, together with net fee and commission income, forms the basis of net interest and other banking income.

28 29 Net interest and other banking income

Captions 31/12/2007 31/12/2006 Changes (in thousands of Euro) (+/-) %

30. Net interest income 589,836 521,163 68,673 13.2 40. Fee and commission income 304,508 298,738 5,770 1.9 50. Fee and commission expense (39,092) (42,479) 3,387 -8.0

60. Net fee and commission income 265,416 256,259 9,157 3.6 70. Dividend and similar income 38,824 29,159 9,665 33.1 80. Net trading income (16,329) 8,212 (24,541) n.s. 90. Net hedging gains (losses) – 2,058 (2,058) -100.0 100. Gains (losses) on disposals/repurchases of: 6,264 63,246 (56,982) -90.1 a) loans and advances (1) 10 (11) n.s. b) financial assets available for sale 4,538 70,359 (65,821) -93.6 d) financial liabilities 1,727 (7,123) 8,850 n.s. 110. Net change in financial assets and liabilities at fair value (6,845) 1,333 (8,178) n.s.

120. Net interest and other banking income 877,166 881,430 (4,264) -0.5

Net interest and other banking income amounted to 877.2 million euro, just 0.5% below 2006 which had benefited from the extraordinary contribution of the “significant non-recurring transactions” discussed below.

Net fee and commission income was 3.6% higher at 265.4 million euro. This result should nonetheless be assessed on the basis of the fact that it was achieved despite a general squeeze on margins from banking services and despite customers’ general disillusion with asset management products, the contribution of whose fees was significantly lower.

Dividend and similar income amounted to 38.8 million euro, up 33.1% on the prior year, mainly because of a number of short-term investments in equities close to their ex-div date.

Net trading income reported a loss of 16.3 million euro (compared with a profit of 8.2 million euro in 2006), while net hedging gains (losses) were zero with no transactions of this type being carried out in the year (+2.1 million euro in 2006).

Gains on disposals of financial assets available for sale (caption 100 b) decreased by 93.6% from 70.4 million euro in 2006 to 4.5 million euro in 2007. This decrease is mainly due to the presence in 2006 of “significant non-recurring transactions”, such as the profit of 10.9 million euro on the sale of Italease S.p.A. and the profit of 55.1 million euro arising on the sale of the Parent Bank’s entire holding of shares in BNL.

Gains on repurchases of financial liabilities (caption 100 d) amounted to 1.7 million euro compared with losses of 7.1 million euro in 2006, which included the costs associated with the “Ex- changeable BNL” convertible bond issued by the Parent Bank, which had been redeemed early during the course of the prior year.

28 29 The net change in financial assets and liabilities at fair value was a negative 6.8 million euro, compared with a positive 1.3 million euro in 2006; this year’s figure was penalized by the negative result of valuing investments relating to insurance contracts valued using the fair value option.

Comparison of net interest and other banking income reported in 2007 with the prior year shows increased contributions from net interest income (67.2% versus 59.1%), net fee and commission income (30.3% versus 29.1%) and dividend and similar income (4.5% versus 3.3%). Instead, gains (losses) on disposals/repurchases of financial assets and liabilities (caption 100) made a significantly lower contribution, down from 7.2% in the prior year to just 0.7% in 2007. Net trading income also made a smaller contribution (-1.9% versus +0.9%), as did net hedging gains (losses) (0% versus +0.2%) and the net change in financial assets and liabilities at fair value (-0.8% versus +0.2%).

Net income from financial and insurance activities

Captions 31/12/2007 31/12/2006 Changes (in thousands of Euro) (+/-) %

120. Net interest and other banking income 877,166 881,430 (4,264) -0.5 130. Net impairment adjustments to: (146,291) (116,650) (29,641) 25.4 a) loans and advances (135,843) (102,155) (33,688) 33.0 b) financial assets available for sale (10,022) (14,323) 4,301 -30.0 d) other financial transactions (426) (172) (254) 147.7

140. Net income from financial activities 730,875 764,780 (33,905) -4.4 150. Net premium income 241,177 430,447 (189,270) -44.0 160. Other insurance income (charges) (236,330) (433,644) 197,314 -45.5

170. Net income from financial and insurance activities 735,722 761,583 (25,861) -3.4

Net income from financial and insurance activities was 735.7 million euro compared with 761.6 million euro in 2006, down 3.4%.

Net impairment adjustments to loans and advances amount to 135.8 million euro, compared with 102.2 million euro in the prior year, up 33%, also as a result of increased coverage of impaired loans due to attentive and prudent policies of credit risk evaluation.

Net impairment adjustments to financial assets available for sale came to 10 million euro, compared with 14.3 million euro in 2006 (-30%). In this regard, the interest held in Hopa S.p.A., an investment holding company, was written down by another 6.9 million euro during the year, thus establishing a prudent carrying value for this investment of 0.50 euro per share ahead of changes in its operating strategy.

Net impairment adjustments to other financial transactions amounted to 426 thousand euro (172 thousand euro in 2006) and, once again, were not significant. 30 31 Net income from insurance activities was 4.9 million euro compared with a loss of 3.2 million euro in 2006.The contraction in the absolute amounts of insurance business reflect the new method of consolidating Berica Vita and Vicenza Life, after 50% of them was sold at the start of September under the partnership agreement with the Cattolica Assicurazioni Group, meaning that only 8 months of their results have been included in the 2007 consolidated figures.

Operating costs

Captions 31/12/2007 31/12/2006 Changes (in thousands of Euro) (+/-) %

180. Administrative costs: (586,427) (539,651) (46,776) 8.7 a) payroll (348,452) (322,061) (26,391) 8.2 b) other administrative costs (237,975) (217,590) (20,385) 9.4 190. Net provisions for risks and charges (41,092) (16,909) (24,183) 143.0 200. Net adjustments to property, plant and equipment (17,401) (16,166) (1,235) 7.6 210. Net adjustments to intangible assets (3,752) (5,277) 1,525 -28.9 220. Other operating charges/income 60,074 52,223 7,851 15.0

230. Operating costs (588,598) (525,780) (62,818) 11.9

Operating costs rose by 11.9% on the prior year to 588.6 million euro.

Analysis of the various types of cost reveals that payroll costs increased by 8.2% on 2006 to 348.5 million euro, mainly because of new recruits to staff the new branches opened and the payment of backdated payrises after renewing the national payroll contract, while other administrative costs climbed by 9.4% to 238 million euro, mostly due to costs associated with the Group’s expansion.

Net provisions for risks and charges increased by 143% from 16.9 million euro in the prior year to 41.1 million euro in 2007, most of which due to the situation on financial markets and the possible negative repercussions for customer lending.

Net adjustments to property, plant and equipment increased by 7.6% from 16.2 million euro in 2006 to 17.4 million euro in 2007, while those to intangible assets decreased by 28.9% from 5.3 to 3.8 million euro.

Other operating charges/income amounted to 60.1 million euro, up 15% from 52.2 million euro in 2006. The cost/income ratio2 was 64.8% compared with 60.1% in 2006 which benefited from the extraordinary contribution of the “significant non-recurring transactions” mentioned earlier.

2 This indicator reports administrative costs (caption 180) plus net adjustments to property, plant and equipment and intangible assets (captions 200 and 210) as a proportion of net interest and other banking income (caption 120) plus other operating charges/income (caption 220). 30 31 Profit (loss) from current operations before tax

Captions 31/12/2007 31/12/2006 Changes (in thousands of Euro) (+/-) %

240. Profit (loss) from equity investments 46,911 6,494 40,417 622.4 250. Net gains (losses) arising on fair value adjustments to property, plant and equipment and intangible assets 172 102 70 68.6 260. Adjustments to goodwill (660) (1,040) 380 -36.5 270. Gains (losses) on disposal of investments 645 640 5 0.8

280. Profit (loss) from current operations before tax 194,192 241,999 (47,807) -19.8

Profit (loss) from current operations before tax amounted to 194.2 million euro, down 19.8% with respect to 2006.

Profit (loss) from equity investments amounted to 46.9 million euro, mostly relating to the profit realized on selling 50% of the shares held in the insurance companies Berica Vita and Vicenza Life and in the fund management company BPVi Fondi under the partnership agreement made during the year with the Cattolica Assicurazioni Group, as already discussed in detail.

Net gains (losses) arising on fair value adjustments to property, plant and equipment and intangible assets came to 172 thousand euro, compared with 102 thousand euro in 2006.

Adjustments to goodwill amounted to 660 thousand euro, compared with 1,040 thousand in the prior year. Gains (losses) on disposal of investments amounted to 645 thousand euro, staying in line with the prior year.

32 33 Net income for the year pertaining to the Parent Bank

Captions 31/12/2007 31/12/2006 Changes (in thousands of Euro) (+/-) %

280. Profit (loss) from current operations before tax 194,192 241,999 (47,807) -19.8 290. Income taxes on current operations (76,652) (93,856) 17,204 -18.3

300. Profit (loss) from current operations after tax 117,540 148,143 (30,603) -20.7

320. Profit (loss) from current operations after tax 117,540 148,143 (30,603) -20.7 330. Minority interests (3,809) (3,641) (168) 4.6

340. Net income (loss) for the year pertaining to the parent bank 113,731 144,502 (30,771) -21.3

Income taxes amounted to 76.7 million euro (with a tax rate of 39.5%), compared with 93.9 million euro in 2006 (with a tax rate of 38.8%). This amount includes the impact on deferred tax assets and liabilities of changing the rates of IRES (Italy’s corporate income tax) and IRAP (Italy’s regional business tax), under the 2008 Finance Law. In addition, the Parent Bank took up the option allowed by the same 2008 Finance Law to pay final tax on differences between the book value and tax base of assets arising from deductions made for tax but not in the accounts up until 31 December 2007 (known as the “Form EC” release).

Following the above provision for taxation, profit (loss) from current operations after tax came to 117.5 million euro, down 20.7% on 2006.

Net income pertaining to minority interests in subsidiary companies amounted to 3.8 million euro (3.6 million euro in 2006), while net income for the year pertaining to the Parent Bank was 113.7 million euro (144.5 million in 2006).

32 33 Reconciliation of equity and net income of the Parent Bank with the related consolidated amounts

The following table reconciles equity and net income reported in the Parent Bank’s statutory financial statements for 2007 with the corresponding figures in the consolidated financial statements.

(in thousands of Euro) Equity Net income

Parent Bank 2,783,607 110,090

Companies consolidated line-by-line -67,411 -7,614

Companies carried at equity 18,428 9,561

Other effects 8,258 1,694

Consolidated financial statements 2,742,882 113,731 Consolidated net income for the year pertaining to the Parent Bank of 113.7 million euro was 3.6 million euro higher than that reported in the Parent Bank’s individual financial statements.

Consolidated equity pertaining to the Parent Bank of 2,742.9 million euro was 40.7 million euro lower than that reported in the Parent Bank’s individual financial statements. The changes in consolidated equity are detailed in a schedule attached to the consolidated financial statements.

For a better understanding of the reconciliation between the Parent Bank’s results and the consolidated results pertaining to the Parent Bank, the following table analyzes the nature of the reconciling items.

(in thousands of Euro) 31/12/2007

Parent Bank’s net income 110,090 share of net income in the statutory financial statements 45,971 reversal of dividends recorded on a cash basis -41,826 elimination of intercompany securities -1,553 reversal of effects of securitized loans 3,094 elimination of intercompany gains 317 other effects -2,362

Consolidated net income 113,731

34 35 Performance of the Group’s principal companies

Highlights from the 2007 balance sheets and income statements of the Group’s principal companies are presented and discussed below. Reference should be made to the Parent Bank’s report on operations for a more detailed analysis.

We consider it important to provide information concerning the principal aggregates of each of the Group’s banking subsidiaries, thereby putting them into perspective within the Group as a whole, while providing an overall summary of the Group’s banking activities.

Intercompany transactions and balances have not been eliminated from these figures.

1 (in thousands of Euro) BPVI B. NUOVA CARIPRATO FARBANCA BPVI GROUP2

Loans to customers 14,912,681 2,520,259 3,193,363 205,996 20,839,193

Direct deposits 13,884,771 2,887,134 2,651,748 65,022 19,483,539

Indirect deposits 15,107,995 1,333,499 2,063,865 25,715 18,531,074

Equity 2,783,607 205,003 288,805 35,830 n.s.

Net income for the year 110,090 10,037 12,232 1,554 n.s.

Number of outlets3 448 126 92 1 667

Number of branches 429 106 92 1 628

Number of employees4 3,354 850 980 28 5,430

1 including the ex-UBI branches. 2 the Group’s figures refer to the consolidated financial statements and not to the sum of the companies presented above 3 the number of outlets includes bank branches, money shops and private banking outlets 4 at 31.12.2007

Banca Popolare di Vicenza S.c.p.A.: Parent Bank

Banca Popolare di Vicenza has 448 units at 31 December 2007, organized at three levels:10 Ar- eas, 56 Zones, 429 branches, 1 money shop and 18 private banking outlets. During 2007 25 new branches were opened and 61 branches were acquired from UBI Banca, in the provinces of Bergamo (24 branches) and Brescia (37 branches).

Among the other traditional distribution channels, the number of ATMs continued to grow, rising by 6% over the year to 402 at year end (excluding those of the 61 branches acquired from UBI); most of this increase was due to the opening of new branches in the year. An intense campaign was continued in support of POS services, viewed as a valid way of securing customer loyalty.

Excluding the 219 staff in the 61 branches acquired from the UBI Group, headcount was 3,135 at 31 December 2007, 167 more than at the end of 2006 (+5.6%). The new staff were mostly 34 35 employed in the Commercial Network and only partly in Head Office. The strengthening of the Commercial Network formed part of the expansion plan, while the new staff recruited to Head Office helped reinforce some of the functions overseeing the Bank’s operational governance.

Funds under management, comprising direct deposits, subordinated bonds and indirect deposits, excluding those relating to the branches acquired from the UBI Group, amounted to 27,631 million euro at 31 December 2007, up 9.2% since 31 December 2006. If the direct and indirect deposits of the ex-UBI branches are included, total funds under management would amount to 28,993 million euro, with an annual increase of 14.5%.

The two components of funds under management (excluding the branches acquired from UBI Banca) increased at a broadly similar rate (+8.2% for direct deposits and +10.1% for indirect deposits), outperforming the banking industry in general. Once again in 2007, the trend in loans to customers confirmed the strong growth experienced over the past few years, testifying to the continued, wide-ranging efforts in support of local households and businesses.

Net of adjustments, loans to customers (excluding the ex-UBI branches) increased by 18.2% on the prior year to 14,225 million euro at 31 December 2007.This increase was higher than the industry as a whole, which reported a 10% year-on-year growth in lending. If the loans of the ex- UBI branches are included, the annual increase would rise to 23.9%, taking the total to 14,913 million euro.

In terms of individual lending products, mortgage loans continued to grow apace, rising 28.9% to 4,978 million euro, now representing over one third of total lending.

There were also increases on the prior year for all the other lending products: ordinary current accounts +19.3%, syndicated loans +18.8%, import-export loans +8.5%, other loans +19.7%, debt securities +59% and repurchase agreements +225.6%.

Turning to the quality of the loan portfolio, 2007 reported a slight improvement in the risk and coverage parameters relative to the prior year.

Excluding loans relating to the ex-UBI branches, impaired loans to customers (net of provisions, and including any impaired “Assets sold but not derecognized”) increased by an absolute amount of 51.5 million euro (+11.6%) at 31 December 2007, but reported’s slight decline as a percentage of total net loans.

Looking at the situation in more detail, despite a contraction in exposures overdue by more than 180 days (-25.5%), there was an increase of 21.4 million euro in non-performing loans (+10.7%), of 18 million euro in watchlist loans (+10.7%) and of 31.6 million euro in restructured loans (not present in 2006).

With regard to the other coverage parameters, meaning the ratio between provisions and gross exposure, the coverage of total impaired loans increased from 29.8% in 2006 to 31.9% at 31 De- cember 2007, mainly due to the higher provisions against non-performing loans, whose coverage ratio climbed from 37.7% in the prior year to 42.5% in 2007.

36 37 The “general provision” for “performing” loans amounted to 75.7 million euro at 31 December 2007, providing coverage of 0.55%, just above that in 2006 (0.54%).

As far as the income statement is concerned, the Parent Bank reported 110.1 million euro in net income for 2007, 8.3% down on the prior year which had benefited from an extraordinary amount of over 54.2 million euro, net of tax, for “significant non-recurring transactions”, namely the sale of all the shares held in BNL, the sale of Italease SpA and the early redemption of the “Exchangeable BNL” bond.

This year’s post-tax extraordinary items amounted to 40.7 million euro, all of which due to the sale of 50% of the shares held in the insurance companies Vicenza Life and Berica Vita and in the fund management company BPVi Fondi under the partnership agreement with the Cattolica Assicurazioni Group.

This result is nonetheless positive in view of the difficult and more competitive environment in which the Group had to operate, following the downward trend in financial markets in the year and the signs of trouble in the economy emerging in the second half of the year.

Net interest income of 355.3 million euro was up by 13.5% on 2006; this reflects the increase in volumes and the spread management policies adopted by the Bank in a context of generally rising bank rates.

This is the result which most characterizes full year performance and which, together with dividends from equity investments, forms the basis of net interest and other banking income.

The resistance displayed by net interest and other banking income reflects the solidity of the Bank’s fundamentals and its ability to generate earnings from its core business. This caption amounted to 582.7 million euro at 31 December 2007, just 1.3% below 2006 which had however benefited from the extraordinary contribution of “significant non-recurring transactions”.

Comparison of net interest and other banking income reported in 2007 with the prior year shows increased contributions from net interest income (61% versus 53%), net fee and commission income (30% versus 29.3%) dividend and similar income (11.7% versus 10.3%) and net change in financial assets and liabilities at fair value (-0.4% versus -1.2%).. Instead, gains (losses) on disposals/repurchases of financial assets and liabilities (caption 100) made a significantly lower contribution, down from 8.2% in the prior year to just 0.9% in 2007. Net trading income also made a smaller contribution (-3.2% versus +0.1%), as did net hedging gains (losses) (0% versus +0.3%).

Net income from financial activities was 470.5 million euro compared with 496.6 million euro in 2006, down 5.3%.

Operating costs rose by 12.8% on the prior year to 364 million euro.

The cost/income ratio3 was 60.8% compared with 55.3% in 2006 which benefited from the extraordinary contribution of the “significant non-recurring transactions” mentioned earlier. Profit (loss) from current operations before tax amounted to 149.1 million euro, down 14.4% with respect to 2006.

3 This indicator reports administrative costs (caption 150) plus net adjustment to property, plant and equipment and intangible assets (caption 170 and 150)as a proportion of net interest and other banking income (caption 120) plus other operating charges/income (caption 190). 36 37 Profit (loss) from equity investments amounted to 42.6 million euro, mostly relating to the profit realized on selling 50% of the shares held in the insurance companies Berica Vita and Vicenza Life and in the fund management company BPVi Fondi under the partnership agreement made during the year with the Cattolica Assicurazioni Group, as already discussed in detail. After tax, net income (loss) for 2007 came to 110.1 million euro, compared with 120 million euro in 2006 (-8.3%).

Banca Nuova S.p.A.

Banca Nuova is 99.59% owned by Banca Popolare di Vicenza and has its roots in Central and Southern Italy. It increased its local presence in 2007 by opening three new branches and three new outlets. Its commercial network had 126 outlets as of 31 December 2007 (106 bank branches, 16 money shops and 4 private banking outlets), all located in Central and Southern Italy; of these 91 (79 branches, 10 money shops and 2 private banking outlets) are located in Sicily. The size of the Fi- nancial Promoter network stayed the same as the prior year with 152 consultants, reflecting the recruitment of 24 highly qualified professionals and termination of 24 non-key consultants.

Significant events involving the subsidiary during 2007 included the start of operations by Far- manuova S.p.A., after being formed on 29 September 2006 in Palermo with a capital stock of 1 million euro. Capital stock was subscribed as follows:30% by Banca Nuova as the company’s technical partner, while the remaining 70% was taken up in equal proportions by 82 health sector operators (pharmacists, clinics and others). Effective 23 January 2007, the UIC (Italian Exchange Office) registered the company as a financial intermediary pursuant to art. 106.1 of Decree 385 dated 1 September 1993.

Banca Nuova contributed its “One-fifth of Salary” line of business to PrestiNuova S.p.A. on 1 January 2006.At 31 December 2006, this company was 93.33% owned by Banca Nuova with the remaining 6.67% held by Banca Popolare di Vicenza. On 22 February 2007, Banca Popo- lare Sant’Angelo di Licata became a shareholder in PrestiNuova S.p.A. after subscribing to a reserved capital increase of 947,370.00 euro plus additional paid-in capital of 473,685.00 euro, corresponding to 5% of capital stock. As a result, the company’s capital stock is now held as follows: Banca Nuova (88.67%), Banca Popolare di Vicenza (6.34%) and Banca Popolare Sant’Angelo (5%).

At 31 December 2007, the bank had 850 employees, of whom 5 have fixed-term contracts and 21 are part-timers. This is 9 more than the figure of 841 reported at the end of 2006, reflecting 47 new recruits and 38 leavers. The workforce is analyzed as follows: 225 persons in Head Office (26.5% of the total) and 625 in the Commercial Network (73.5%).

Banca Nuova continued to develop in 2007. Total funds under management amounted to around 4,221 million euro at year end, having increased by more than 468 million euro (+12.5%) over the year, reflecting a big increase in direct deposits, which climbed by 20.2% to over 2,887 million euro, and a slight fall in indirect deposits, which shrank by 1.2% to 1,333 million euro. The growth in direct deposits is particularly due to the increase in current accounts, up 25.2% to 1,787 million euro at 31 December 2007, and in bonds, up 39.1% to 630 million euro.

Loans to customers rose by 9.5%, with an increase in absolute terms of about 218 million euro; this reflects the growth in overdraft lending, in debt securities and above all in mortgages.

In detail, overdraft lending increased by 13 million euro (+4.2%) and mortgages by 276 million

38 39 euro (+23.7%);in contrast, import-export loans were down by over 7 million euro (-23.9%), syndicated loans by more than 11 million euro (-16.9%) and other loans by over 51 million euro (-11%).

With reference to the indicators of credit risk, the ratio of net impaired loans to net lending (including those loans represented by “Assets sold but not derecognized”) went from 3.48% in 2006 to 3.49% at 31 December 2007, while the ratio of net non-performing loans to net lending improved from 1.71% in 2006 to 1.67% in 2007. As for the subsidiary’s results, it reported net income of over 10 million euro in 2007, an increase of 16.9% on the previous year, thanks to improvement in all its principal profit margins. In particular, net interest and other banking income was 16.2% higher at 136.9 million euro, largely thanks to a 17% increase in net interest income to 91.8 million euro. Despite higher net impairment adjustments to loans and advances and other financial transactions, net income from financial activities increased by 14.4% to 126.2 million euro. Profit from current operations before tax improved by 22.4% to 22.1 million euro despite a large increase in net provisions for risks and charges.

Net income for the year came to 10 million euro, reporting an increase of over 1.45 million euro (+16.9%).

Cariprato S.p.A.

Cariprato, 79% owned by Banca Popolare di Vicenza, continued to grow in line with the bank’s business plan for 2005/2007, by opening 12 new branches. Over the past five years, Cariprato’s local network has increased from 53 branches at the end of 2002, concentrated in the provinces of Prato, Florence and Pistoia, to 92 at present, which are spread all over Tuscany. The network’s expansion has involved considerable effort: investment in fitting out the branches, recruitment of new staff and reallocation of existing personnel to cover the needs of the new branches, adoption of organizational models suitable for effectively managing more complex, structured distribution activities. The results of Cariprato in 2007 were affected by the region’s general economic climate, which continued to present many causes for concern in several sectors. These problems inevitably im- pacted the quality of credit in 2007: in fact, the bank’s financial statements report an increase in the level of provisions. This has led to closer monitoring of credit and a focus on achieving the best balance between growth and quality of lending, while still increasing business. The bank’s income statement has inevitably suffered the effects. At 31 December 2007, the bank had 980 employees, of whom 94 with part-time contracts. Dur- ing the year 59 new staff were hired, while 17 people left. The increase of 42 since the end of 2006 has mostly been for strengthening the commercial network.

Total funding increased by 2.2% from 4,614.9 million euro to 4,715.6 million euro. Direct deposits from customers amounted to 2,651.7 million euro, up 6.4% with respect to the prior year; of particular note were bonds, which increased by 13.3%, and repurchase agreements, which grew by 30.7%. Indirect deposits fell to 2,063.9 million euro, reflecting the negative performance of asset management, which lost -6.2%. Loans to customers rose by about 462.6 million euro from 2,730.8 to 3,193.4 million euro, up 16.9% which compares with industry growth of 10%. Short-term loans rose 12.93% to 935 million euro, while long-term loans, including those securitized with Berica 6, climbed 18.5% from 1,855 to 2,198 million euro, compared with industry growth of 11.4%. At the end of 2007, 30% of performing loans were short term, while 70% were repayable over the long term.

Net impaired loans (non-performing, watchlist and restructured loans, together with those over-

38 39 due or overdrawn for more than 180 days) totaled 122.6 million euro (an increase of 16.1 million euro on 2006). In particular, non-performing loans amounted to 52.4 million euro (+33.7% with respect to 2006), while watchlist loans totaled 49.2 million euro, up 17.1% on 2006. Amounts overdue and/or overdrawn and restructured loans totaled 21.1 million euro, a decrease with respect to 24.5 million euro in the prior year (-13.9%). Adjustments to impaired loans, which are discounted in accordance with IAS, totaled 46.9 million euro. The ratio of net non-performing and watchlist loans to total net loans came to 3.8%, in line with 2006. Net non-performing loans accounted for 1.6% of total net loans. After reviewing performing loans on the basis of past statistics/trends and using internal rating systems, these have been written down by 17.4 million euro, corresponding to 0.56% of the total. In terms of the results achieved, net interest income from customers rose by 9.72% on 2006 to 109.4 million euro; interest income from customers increased by 30.50% from 140.6 million euro in 2006 to 183.51 million euro in 2007 (+30.50%), while the cost of funding rose by a significantly higher percentage, also because more funds were raised on the interbank market. As a result net interest and other banking income was 10.7% higher than in 2006 at 156.3 million euro, reflecting a growth in core business after expanding the bank’s presence in the region. Tuscany’s adverse economic situation caused a number of problems to emerge, producing an increase in net impairment adjustments to loans and financial assets related to the year 2006. The increase in payroll and other administrative costs reflects the territorial expansion involving new branch openings. Consequently, profit from current operations before tax decreased by 23.01% to 24.4 million euro. Net income for the year was 25.03% lower than in 2006 at 12.2 million euro.

PrestiNuova S.p.A.

The core business of PrestiNuova comprises “lending secured against one-fifth of salary/pension” and loans repaid by withholdings from salary/pension, especially to the employees in the public sector. In the future, this business will be complemented with the offer of other forms of “consumer” credit provided by Banca Popolare di Vicenza Group. In fact, PrestiNuova was set up to rationalize and enhance the Group’s existing business in the consumer credit sector, especially after Banca Nuova made a three-year agreement in 2004 with INPDAP (Italy’s social security agency for public-sector employees) for the disbursement of loans to pensioners as well, with repayment automatically deducted at source. This agreement, which expired in the first half of 2007, was renewed during the second half of the year. Our agreement (which involves managing loans secured against/repaid from pensions and the disbursement of specific consumer loans and mortgages) has ranked the temporary business group (PrestiNuova, Banca Popolare di Vicenza, Banca Nuova and Cassa di Risparmio di Prato) as one of the leading banks and financial institutions partaking in the overall convention. This is placing the bank in a position of privilege as well as offering it important opportunities for development.

After the INPDAP agreement expired, the space available in local INPDAP offices was with- drawn from 1 June 2007. For the purposes of keeping the commercial team active in this area, space has been allocated in a number of group bank branches, particularly in areas where there was most demand for this type of service.

At 31 December 2007, PrestiNuova had 53 employees.

At 31 December 2007 “Loans secured against one-fifth of salary”, representing all of the company’s lending, amounted to 313.4 million euro, net of adjustments, compared with 283.5 million euro at 31 December 2006 (+11%).

40 41 In terms of the results, net interest income was 9.6% higher than the year before at 8.8 million euro, accounting for 88.8% of net interest and other banking income. Net fee and commission income accounted for 11.2% of net interest and other banking income, most of which commission passed back to the company from insurance companies in relation to life and job-loss insurance policies taken out by customers to secure the loans received. Net interest and other banking income was 6.1% down on the prior year at 10 million euro, mostly reflecting the loss of business in the period from May to September after no longer being able to operate out of INPDAP offices. The relocation of the commercial network to corners within group bank branches started to bear fruit in the last quarter of the year. Administrative costs were 3.7% lower at 4.7 million euro, of which 3 million euro related to payroll costs (+2.1%) and 1.7 million euro to other administrative costs (-12.7%). Profit from current operations before tax came to 4.9 million euro. The cost/income ratio, serving as an overall indicator of operating performance, was 49.7% in 2007 compared with 47.4% in the previous year. After deducting 2.2 million euro in tax (corresponding to a tax rate of 44.2%), net income for the year came to 2.8 million euro compared with 3 million euro in 2006.

Farbanca S.p.A.

In July 2007, Banca Popolare di Vicenza purchased interests of 19.33% and 19.55% in Farbanca S.p.A. under separate agreements with Intesa San Paolo S.p.A and Cassa di Risparmio di Cento S.p.A. respectively, making it the controlling shareholder, as defined in the company’s articles of association.

Farbanca is an on-line bank formed in 1998 by a group of pharmacists, industry association representatives and industry professionals, to offer banking services to pharmacies.

The initial investment (38.88% with a book value of 18.7 million euro) was subsequently increased during 2007, reaching 47.44% at 31 December 2007 with a carrying value of 22.8 million euro.

Farbanca reported a good performance in 2007. Volumes increased by 5.6%, benefiting from a growth in direct deposits (+10.2%), which more than made up for the 4.4% drop in indirect deposits. Loans to customers increased by 18%, especially thanks to long-term loans. Net income for the year jumped by 50.6% on the prior year to 1.5 million euro.

BPV Finance (International) Plc

This Irish-registered company is 99.99% owned by Banca Popolare di Vicenza and operates out of Dublin’s International Financial Services Centre. The carrying amount of this investment is 103.4 million euro. BPV Finance specializes in proprietary trading, and carries out its business by investing in securities of Italian and international companies, with a special emphasis on the foreign subsidiaries of Italian companies. More specifically, the company’s portfolio, which has a generally high rating, mostly consists of corporate debt securities, mainly issued by banks and financial institutions, and by asset backed securities. Consequently, BPV Finance was affected by the crisis hitting world financial markets in 2007, reporting a decrease not only in net income from 6.6 million euro in 2006 to 2 million euro in 2007, but also in equity, after its valuation reserves went down by around 32.8 million euro.

40 41 B.P.Vi Fondi Sgr S.p.A

During 2007 Banca Popolare di Vicenza reduced its initial 100% holding in this company by selling 50% to Cattolica Assicurazioni during the month of September. Accordingly, Banca Popo- lare di Vicenza held 50% of B.P.Vi Fondi at the end of December 2007, with a carrying value of 5.3 million euro.

This sale formed part of the partnership agreement with Cattolica Assicurazioni, which also entails the proposed merger of B.P.Vi Fondi SGR and Verona Gestioni SGR S.p.A., the fund management company formerly belonging to the Cattolica Assicurazioni Group, in which Banca Popolare di Vicenza took a 50% interest under the same agreement.

B.P.Vi Fondi acts as the asset manager for the entire Banca Popolare di Vicenza Group and sup- ports the placement of business by the provision of training and information to the sales network.

At 31 December 2007 the company had 1.8 billion euro in assets under management; net income for the year was 1.8 million euro, 30.1% down on the figure of 2.6 million euro reported in 2006.

Verona Gestioni SGR S.p.A.

On 5 September 2007 Banca Popolare di Vicenza acquired 50% of Verona Gestioni SGR S.p.A., a manager of funds on a collective and individual basis, from Cattolica Assicurazioni for 20.6 million euro.

As established under the agreement with Cattolica Assicurazioni, the process of merging B.P.Vi Fondi SGR and Verona Gestioni SGR S.p.A. has been started in 2008; this process is designed to create a single business with around 6 billion euro in assets under management.

The company reported net income of 2.3 million euro in 2007, 26.6% more than the year before.

Nordest Merchant S.p.A

This company, 80% owned by Banca Popolare di Vicenza and reported in its financial statements at a carrying value of 3.3 million euro, is the Group’s merchant bank. Its main business is the provision of extraordinary finance to small and medium enterprises, particularly involving acquisition financing, corporate finance and mergers and acquisitions, also through its two wholly-owned managers of closed-end and speculative investment funds (NEM Sgr and NEM Sgr).

The company reported net income for 2007 of 430 thousand euro.

NEM SGR S.p.A.

This wholly-owned subsidiary of Nordest Merchant S.p.A. carries out collective asset management activities by promoting, launching and managing closed-end mutual funds. The company reported net income for 2007 of 299 thousand euro.

NEM 2 SGR S.p.A.

This company, formed in October 2006 as a wholly-owned subsidiary of Nordest Merchant

42 43 S.p.A, carries out collective asset management by promoting, launching and managing speculative mutual funds and particularly mezzanine funds. NEM 2 SGR has been operating since May 2007, after launching “NEM Mezzanine”, a closed-end speculative mutual investment fund.

The company reported net income for 2007 of 333 thousand euro.

Nuova Merchant S.p.A.

This wholly-owned subsidiary of Banca Popolare di Vicenza (of which 80% acquired directly in 2007 on top of the 20% already held by Banca Nuova S.p.A.) provides support and development services for business projects in Central and Southern Italy. Nuova Merchant reported a loss of 265 thousand euro in 2007.

Servizi Bancari S.p.A.

This wholly-owned subsidiary of Banca Popolare di Vicenza provides back office and IT services to the Group’s companies.

Servizi Bancari reported net income of 2 million euro in 2007.

Immobiliare Stampa S.p.A

This wholly-owned subsidiary of Banca Popolare di Vicenza, with a carrying value of 195.9 million euro, manages the real estate portfolio of Banca Popolare di Vicenza and provides it, along with Cariprato and Banca Nuova, with real estate services, as well as carrying out administrative activities relating to the management of group properties leased to third parties and of third- party properties leased by group companies.

G.C. Immobiliare S.r.l., a company acquired in December 2006, was absorbed by Immobiliare Stampa with effect from 1 January 2007. The property belonging to this company has been recorded at a value of 3.3 million euro, of which 0.9 million euro corresponding to the book value reported by the merged company and 2.3 million euro for the merger deficit allocated to the property itself.

The subsidiary closed 2007 with net income of 3.2 million euro.

Monforte 19 S.r.l.

Banca Popolare di Vicenza purchased 100% of Monforte 19 S.r.l. in May 2007. This company owns a prestigious building in Milan, currently leased to Solvay Société Anonime and serving as the tenant’s Italian headquarters. This subsidiary had a book value of 13.7 million euro at 31 December 2007, and its acquisition has also involved Banca Popolare di Vicenza refinancing its debt by 29.4 million euro.

The company closed 2007 with a loss of 1.1 million euro.

42 43 Rating

In May 2007 the Bank’s management held its usual meetings with the rating agencies of Standard & Poor’s and Fitch Ratings, who both confirmed their positive ratings of the Bank.

Ratings Standard & Poor’s Fitch Ratings

Long term A- A- Short term A-2 F2 Outlook Stable Stable

In particular, Standard & Poor’s underlined the improvement in the BPVI Group’s performance in 2006, with the achievement of a satisfactory level of efficiency thanks to the major increase in its loans and deposits and the greater efficiency and economies of scale achieved by Cariprato and Banca Nuova, which benefited from the growth in their distribution networks. However, the agency’s rating also took account not only of the slight expected worsening in profitability indicators in 2007, as a result of the major investment in the ambitious branch opening plans by the Parent Bank and Cariprato, but also of the need to have a more sophisticated system for managing credit risk. With regard to the BPVI Group’s expansion strategy, Standard & Poor’s rated the partnership with Cattolica Assicurazioni positively since this alliance marks the creation of an innovative distribution model which should boost the Group’s volumes still further, particularly as far as life and loss insurance products are concerned.

Standard & Poor’s confirmed its rating at the end of September after taking account of the acquisition of 61 branches from UBI Banca; the agency viewed this deal as expensive but consistent with the Group’s expansion plans, calling for territorial diversification into provinces close to its traditional areas.

The rating by Fitch Ratings reflects on the one hand a good positioning in the core market of the Veneto, the bank’s strong capitalization and well diversified lending portfolio; on the other, it reflects the higher risks associated with adopting a federal organizational model which, given the tendency to duplicate certain functions between Parent Bank and subsidiaries, makes it less cost efficient and less effective in terms of controls. The rating also takes account of the Bank’s growth strategy, causing a rising trend in costs, of a credit quality considered only acceptable, even if the growth in doubtful loans in 2006 was nonetheless limited if the classification of one particularly large position as non-performing is ignored, and of a weaker-than-average system of corporate governance.

The awarding of a stable outlook reflects the belief by both rating agencies that BPVI’s will continue to improve its performance in the medium term, even if its expansion plan is expected to cause a slight worsening in the short term, and that the level of capitalization will continue to be adequate.

Research and development

In view of its business and industry sector, the Group does not generally carry out research and development as such. As a result, it has not recognized any intangible assets or costs in this regard. The usual activities of implementing and updating the product catalogue, designed to ensure that each business line has a complete range of products and services in line with major competitors, and the revision of procedures and internal processes to ensure that the operational structure functions adequately, do not result in new or significantly improved products, services or processes relative to those already present on the market, since they are not the result of research and development in the strict sense. 44 45 Information relating to the ownership and sale of treasury shares

Information relating to treasury shares of the Parent Bank and the companies included in the consolidation is provided in the explanatory notes.

Exposure to assets associated with subprime and Alt-A loans

With reference to exposure to the US subprime mortgages or Alt-A sector, only the Group’s Irish subsidiary BPV Finance (International) Plc had any positions at 31 December 2007 with an indirect exposure to the US subprime or Alt-A sector, analyzed as follows:

1) Total exposure to such loans/assets held directly in the balance sheet or off-balance sheet: The BPVi Group does not have any exposures of this kind. 2) Amount of other exposures with underlying assets of this kind, directly or indirectly: the BPVi Group does not have any other exposure apart from those specified in 3) and 4) below. 3) Amount of on-balance sheet exposures – including securities – and off-balance sheet exposures to special purpose entities or other conduits which have invested, even in part, directly or indirectly in assets of this kind: BPV Finance (International) Plc has an exposure of nominal 5,000,000 euro to the collateralized debt obligation OXFOR 2005-1 A1 (ISIN code XS0232966910). This security is a senior tranche (rated AAA by Fitch, Aaa by Moody’s) of a CDO issued by Oxford Street Finance Ltd, a special purpose entity based in Jersey. The collateral backing the entire CDO (2 billion euro) consists of an exposure to individual corporate securities (55%), to corporate inner tranches (30%) and to a portfolio of ABS securities (15%). This 15% amounts to 300 million euro, of which 73.71% is concentrated in US subprime assets at 31 December 2007, for a total of 40 individual ABS securities. The percentage of the entire CDO collateral invested in US subprime securities at this date is therefore 11.0565% (corresponding to 73.71% of 15%). BPV Finance holds nominal 5,000,000 euro of the class A1 senior notes. This class has been rated AAA by Fitch and Aaa by Moody’s. These notes were purchased by BPV Finance on 24 October 2005 at a price of 100 and are reported in the 2007 financial statements under “financial assets available for sale” at a price of 98.6139. The total indirect US subprime exposure of BPV Finance as of 31 December 2007 was therefore 552.825 euro, ie. 11.0565% of the nominal position of 5,000,000 euro. 4) Amount of in-balance sheet and off-balance sheet exposure to hedge funds (or other institutional investors) who invest, even in part, directly or indirectly, in assets of this kind: BPV Fi- nance (International) Plc has an exposure of nominal 2,500,000 euro to units in the BLACK- STONE PARTNERS OS LTD hedge fund. The total indirect US subprime exposure relating to this investment was 130,000 euro as of 31 December 2007, ie. 5.2% of $ 2,500,000.

Audit of the consolidated financial statements

The Parent Bank, as an issuer of widely-held securities, has had its statutory and consolidated financial statements audited by KPMG SpA, who were reappointed as the Group’s auditors for the three-year period 2005-2007 at the stockholders’ meeting held on 14 May 2005, with the approval of the Board of Statutory Auditors.

44 45 Atypical and/or unusual transactions

Atypical and/or unusual transactions are defined as all significant transactions, as defined in the explanatory notes, which due to the nature of the counterparties, the purpose of the transactions, the method of determining the transfer price or the timing of the event (close to the accounting reference date) may give rise to doubts about the correctness/completeness of the information reported in the financial statements, about possible conflicts of interest, the safeguarding of assets or the protection of minority stockholders. As required by CONSOB Com- munication 6064293 dated 28 July 2006, it is reported that no atypical and/or unusual transactions were undertaken in 2007 such as to have a significant impact on the balance sheet, results of operations and financial position of the Banca Popolare di Vicenza Group.

Significant subsequent events

With reference to the disclosure of significant events subsequent to year end, required by article 2428 (5) of the Italian Civil Code, this information can be found in the explanatory notes in Part A “Accounting policies” - Section 4 “Subsequent events”.

Outlook for operations

Figures published in recent weeks report a still very uncertain international economic situation. The latest figures reflect continued downturn in the United States and nonetheless moderate economic performance in Europe, even if the differences between the various EU members are widening. Apart from the now familiar negative figures from the real estate sector, the US figures have also revealed a deterioration in confidence both in the manufacturing sector but above all by households, who are worried about jobs and the country’s general economic situation. As for Eu- rope, the most recent economic figures suggest a general stabilization in the industrial cycle, with signs of recovery in Germany, and maintenance of consumer confidence at the lowest levels since the end of 2005, due to the less favourable outlook for the macroeconomy and price inflation. The economic indicators available for Italy point to continued weakness in manufacturing activity, despite the upswing in industrial output in January 2008 (+0.5% on January 2007 and +1.3% on December 2007), and heightened consumer uncertainty over the general and personal economic outlook, also as a result of the recent re-emergence of inflation (+2.9% year-on-year in February, based on the national general index). The major forecasting institutes are estimating GDP to grow by around 1% in 2008. This downward revision in economic growth is associated with expectations for a continued strengthening of the euro, with a negative impact on price competitiveness, and the return of inflation, expected to top 2.5% in 2008, with a consequently negative impact on household consumption. With reference to the principal banking aggregates, the latest forecasts for lending by the banking system suggest a gradual easing in the demand for loans from households, due to the expected slowdown in mortgages, as partly offset by strong demand for consumer credit. Lending to business is expected to be slightly lower in a generally slowing economy. In terms of funding, current accounts are expected to grow slightly less rapidly, particularly those with businesses, while bond issues will grow apace, even if a bit more slowly than in 2007. The high level of inflation could persuade the ECB to keep monetary policy unchanged for most of 2008, putting off any slight easing to the second half of 2008 only if oil and food prices should return to acceptable levels. As a result, after the steady increase reported in recent years, the rate of growth in bank rates on both loans and deposits is expected to slow in 2008, in line with monetary policy and the trend in market rates. Considering the outlook for the Group’s operations, management will be involved in implementing

46 47 the consolidation outlined in our Business Plan for 2008-2010, with the goal of generating profits from the potential created in these years of strong growth. The budget for 2008 envisages focusing on the commercial development of the outlets opened in the past two years and of the 61 branches recently acquired from UBI Banca. The outlook for the banking business has loans growing less rapidly than in the recent past, with the goal of nonetheless retaining the good position achieved, while direct customer deposits in virtually all their forms should increase at a rate capable of funding most of the growth in loans. As far as indirect deposits are concerned, the insurance-pensions sector is expected to recover thanks to the agreement with Cattolica Assicurazioni. The results from operations are expected to improve further, also thanks to the gain due to be realized on the sale of the equity investment in Linea SpA.

46 47 REPORT BY THE BOARD OF STATUTORY AUDITORS ON THE 2007 CONSOLIDATED FINANCIAL STATEMENTS

Stockholders,

The consolidated financial statements as of 31 December 2007, which were provided to us within the legal term, together with the accompanying tables and attachments and the report on operations, report net income for the year of Euro 113,731 thousand and consolidated equity pertaining to the Group, including net income for the year, of Euro 2,742,882 thousand.

As part of the duties required by law of the Board of Statutory Auditors, and bearing in mind the standards of conduct recommended by the Italian Accounting Profession, we have checked the form and contents of these financial statements, which have been prepared in accordance with international accounting standards (IAS/IFRS) and instructions from the Bank of Italy contained in Circular 262 dated 22 December 2005, which was issued in the context of its powers to regulate the technical form of the financial statements of banks.

The consolidation methods, accounting policies and the scope of the consolidation are all ex- plained in the explanatory notes to the consolidated financial statements.

The directors’ report on operations provides an adequate explanation of performance during the year and provides relevant information relating to the consolidated companies as far as the Group’s overall performance is concerned.

The explanatory notes to the consolidated financial statements contain details of the accounting policies, as well as information on the contents of the balance sheet and income statement and other information required for the purposes of presenting a true and fair view of the Group’s balance sheet, income statement and financial position.

Pursuant to articles 2409-bis and 2509-ter of the Italian Civil Code, the firm of independent auditors belonging to the CONSOB register is responsible for auditing that the consolidated financial statements correspond to the underlying accounting records and comply with the related legislation. This audit has been performed by KPMG SpA, who have informed us that they will be issuing an unqualified audit opinion; during the year, we met with representatives of the independent auditors and with members of the Boards of Statutory Auditors of the subsidiary banks. No matters emerged as a result of such meetings that require disclosure in this report.

We have also checked that the resolutions approved and implemented by the Parent Bank which affect its subsidiaries were taken in accordance with the law and properly notified to the subsidiaries concerned.

Vicenza, 25 March 2008

The Board of Statutory Auditors Giovanni Zamberlan Giacomo Cavalieri Laura Piussi

48 TM CONSOLIDATED FINANCIAL STATEMENTS AS OF 31 DECEMBER 2007 BANCA POPOLARE DI VICENZA GROUP CONSOLIDATED BALANCE SHEET (in thousands of Euro)

Assets 31.12.2007 31.12.2006 10. Cash and balances with central banks 186,946 155,504 20. Financial assets held for trading 885,773 1,531,807 30. Financial assets at fair value 25,792 346,330 40. Financial assets available for sale 1,215,589 1,399,840 50. Financial assets held to maturity 46,129 46,608 60. Loans and advances to banks 1,988,830 1,680,791 70. Loans and advances to customers 20,891,458 17,184,830 100. Equity investments 52,385 63,274 120. Property, plant and equipment 437,609 379,380 130. Intangible assets 984,936 528,896 of which: - goodwill 976,996 522,770 140. Tax assets 140,613 180,312 a) current 37,506 63,059 b) deferred 103,107 117,253 150. Non-current assets held for sale 101,320 – 160. Other assets 297,239 252,502

Total assets 27,254,619 23,750,074

50 51 Equity and liabilities 31.12.2007 31.12.2006 10. Deposits from banks 3,278,694 1,600,251 20. Due to customers 11,479,359 10,404,228 30. Debt securities in issue 5,583,746 4,932,549 40. Financial liabilities held for trading 662,154 701,324 50. Financial liabilities at fair value 2,545,976 2,400,344 80. Tax liabilities: 116,866 124,653 a) current 81,778 43,070 b) deferred 35,088 81,583 100. Other liabilities 559,929 506,885 110. Provision for severance indemnities 82,329 88,672 120. Provisions for risks and charges 108,675 81,619 a) pensions and similar commitments 9,191 9,842 b) other provisions 99,484 71,777 130. Technical reserves – 511,607 140. Valuation reserves 66,081 153,719 160. Equity instruments 13,630 12,054 170. Reserves 324,487 236,116 180. Additional paid-in capital 1,963,297 1,557,856 190. Capital stock 261,656 230,868 210. Minority interests (+/-) 94,009 62,827 220. Net income (loss) for the year (+/-) 113,731 144,502

Total Equity and Liabilities 27,254,619 23,750,074

51 BANCA POPOLARE DI VICENZA GROUP CONSOLIDATED INCOME STATEMENT (in thousands of Euro)

Captions 31.12.2007 31.12.2006 10. Interest income and similar revenues 1,256,160 951,220 20. Interest expense and similar charges (666,324) (430,057) 30. Net interest income 589,836 521,163 40. Fee and commission income 304,508 298,738 50. Fee and commission expense (39,092) (42,479) 60. Net fee and commission income 265,416 256,259 70. Dividend and similar income 38,824 29,159 80. Net trading income (16,329) 8,212 90. Net hedging gains (losses) – 2,058 100. Gains (losses) on disposal or repurchase of: 6,264 63,246 a) loans and advances (1) 10 b) financial assets available for sale 4,538 70,359 d) financial liabilities 1,727 (7,123) 110. Net change in financial assets and liabilities at fair value (6,845) 1,333 120. Net interest and other banking income 877,166 881,430 130. Net impairment adjustments to: (146,291) (116,650) a) loans and advances (135,843) (102,155) b) financial assets available for sale (10,022) (14,323) d) other financial transactions (426) (172) 140. Net income from financial activities 730,875 764,780 150. Net premium income 241,177 430,447 160. Other insurance income (charges) (236,330) (433,644) 170. Net income from financial and insurance activities 735,722 761,583 180. Administrative costs: (586,427) (539,651) a) payroll (348,452) (322,061) b) other administrative costs (237,975) (217,590) 190. Net provisions for risks and charges (41,092) (16,909) 200. Net adjustments to property, plant and equipment (17,401) (16,166) 210. Net adjustments to intangible assets (3,752) (5,277) 220. Other operating charges/income 60,074 52,223 230. Operating costs (588,598) (525,780) 240. Profit (loss) from equity investments 46,911 6,494 250. Net gains (losses) arising on fair value adjustments to property, plant and equipment and intangible assets 172 102 260. Adjustments to goodwill (660) (1,040) 270. Gains (losses) on disposal of investments 645 640 280. Profit (loss) from current operations before tax 194,192 241,999 290. Income taxes on current operations (76,652) (93,856) 300. Profit (loss) from current operations after tax 117,540 148,143 320. Net income (loss) for the year 117,540 148,143 330. Minority interests (3,809) (3,641) 340. Net income (loss) for the year pertaining to the parent bank 113,731 144,502 52 . CHANGES IN CONSOLIDATED STOCKHOLDERS’ EQUITY

Balance at Balance at Changes to Balance at Balance at Allocation of prior year results Changes in the year Equity at 31/12/2006 31/12/2006 opening 01/01/2007 01/01/2007 Group Reserves – Dividends Changes Changes Equity transactions Net income Net income 31/12/2007 Group Minority balances Group Minority reserves Minority and other in reserves in reserves Issue of Issue of Purchase Purchase Extraordinary Change Derivatives Stock (loss) (loss) Group Minority interests interests interests allocations Group Minority new shares new shares of treasury of treasury distribution in equity on treasury options for 2007 for 2007 interests interests Group Minority shares shares of dividends instruments shares Group Minority interests Group Minority interests interests

Capital stock: 230,868 22,272 – 230,868 22,272 – – – – 24,051 30,788 – – – – – – – – – 261,656 46,323 a) ordinary shares 230,868 22,272 – 230,868 22,272 – – – 24,051 30,788 – – – – – – – – 261,656 46,323 b) other shares – – – – – – – – – – – – – – – – – – – – –

Additional paid-in capital 1,557,856 3,487 – 1,557,856 3,487 – – – – 2,884 405,441 – – – – – – – – – 1,963,297 6,371 Reserves: 236,116 22,809 – 236,116 22,809 79,076 774 – (2,759) 3,179 – – – – – 12,054 – – – – 324,487 26,762 a) from earnings 179,934 22,725 – 179,934 22,725 49,076 774 – (2,759) 3,179 – – – – – 12,054 – – – – 238,305 26,678 b) other 56,182 84 – 56,182 84 30,000 – – – – – – – – – – – – – – 86,182 84

Valuation reserves: 153,719 10,618 – 153,719 10,618 – – – (87,638) 126 – – – – – – – – – – 66,081 10,744 a) available for sale assets 15,030 4 – 15,030 4 – – (87,663) 151 – – – – – – – – – – (72,633) 155 b) cash flow hedges – – – – – – – – – – – – – – – – – – – – – – c) other 138,689 10,614 – 138,689 10,614 – – – 25 (25) – – – – – – – – – – 138,714 10,589 – property, plant and equipment – – – – – – – – – – – – – – – – – – – – – – – special revaluation laws 138,689 10,614 – 138,689 10,614 – – – 25 (25) – – – – – – – – – – 138,714 10,589

Equity instruments 12,054 – – 12,054 – – – – – – – – – – 1,576 – – – – 13,630 –

Treasury shares – – – – – – – – – – – – – – – – – – – – – –

Net income (loss) for the year 144,502 3,641 – 144,502 3,641 (79,076) (774) (68,292) – – – – – – – – – – 113,731 3,809 113,731 3,809

Equity 2,335,115 62,827 – 2,335,115 62,827 – – (68,292) (90,397) 30,240 436,229 – – – – 13,630 – – 113,731 3,809 2,742,882 94,009

54 55 CHANGES IN CONSOLIDATED STOCKHOLDERS’ EQUITY

Balance at Balance at Changes to Balance at Balance at Allocation of prior year results Changes in the year Equity at 31/12/2005 31/12/2005 opening 01/01/2006 01/01/2006 Group Reserves – Dividends Changes Changes Equity transactions Net income Net income 31/12/2006 Group Minority balances Group Minority reserves Minority and other in reserves in reserves Issue of Issue of Purchase Purchase Extraordinary Change Derivatives Stock (loss) (loss) Group Minority interests interests interests allocations Group Minority new shares new shares of treasury of treasury distribution in equity on treasury options for 2006 for 2006 interests interests Group Minority shares shares of dividends instruments shares Group Minority interests Group Minority interests interests

Capital stock: 183,817 23,335 – 183,817 23,335 – – – 45,954 (1,071) 1,097 8 – – – – – – – – 230,868 22,272 a) ordinary shares 183,817 23,335 – 183,817 23,335 – – – 45,954 (1,071) 1,097 8 – – – – – – – – 230,868 22,272 b) other shares – – – – – – – – – – – – – – – – – – – – –

Additional paid-in capital 1,543,127 3,964 – 1,543,127 3,964 – – – – (590) 14,729 113 – – – – – – – – 1,557,856 3,487 Reserves: 179,109 23,317 – 179,109 23,317 64,334 513 1,079 (8,406) (1,021) – – – – – – – – – – 236,116 22,809 a) from earnings 144,927 23,233 – 144,927 23,233 42,334 513 1,079 (8,406) (1,021) – – – – – – – – – – 179,934 22,725 b) other 34,182 84 – 34,182 84 22,000 – – – – – – – – – – – – – – 56,182 84

Valuation reserves: 231,695 9,757 6,598 237,515 10,535 – – – (83,796) 83 – – – – – – – – – – 153,719 10,618 a) available for sale assets 63,757 (161) – 63,757 (161) – – – (48,727) 165 – – – – – – – – – – 15,030 4 b) cash flow hedges – – – – – – – – – – – – – – – – – – – – – – c) other 167,938 9,918 6,598 173,758 10,696 – – – (35,069) (82) – – – – – – – – – – 138,689 10,614 – property, plant and equipment 121,640 6,406 – 121,640 6,406 – – – (121,640) (6,406) – – – – – – – – – – – – – special revaluation laws 46,298 3,512 6,598 52,118 4,290 – – – 86,571 6,324 – – – – – – – – – – 138,689 10,614

Equity instruments 12,054 – – 12,054 – – – – – – – – – – – – – – – 12,054 –

Treasury shares – – – – – – – – – – – – – – – – – – – – – –

Net income (loss) for the year 125,770 5,140 (6,598) 119,950 4,362 (64,334) (513) (59,465) – – – – – – – – – – 144,502 3,641 144,502 3,641

Equity 2,275,572 65,513 – 2,275,572 65,513 – – (58,386) (46,248) (2,599) 15,826 121 – – – – – – 144,502 3,641 2,335,115 62,827

The change in the opening balances related to the reclassification to equity of the tax benefit associated with the excess deferred tax liabilities, recorded on FTA in relation to the revaluation of real estate, with respect to the flat tax paid pursuant to Finance Law 266 dated 23/12/2005 in order to frank the additional value recorded for such real estate, as required by the Bank of Italy in the letter entitled “property, plant and equipment and flat tax” dated 31/03/2006. The changes in the reserves of the Group and the Minority Interests include the reclassification of the FTA reserve recorded on redetermining the deemed cost of the Group’s real estate and works of art. The “Issue of new shares” is stated net of the cancellations recorded during the year..

56 57 CONSOLIDATED CASH FLOW STATEMENT Direct method in thousands of Euro

A. OPERATING ACTIVITIES 31/12/2007 31/12/2006

1 Operations 427,289 622,467 – Interest income collected (+) 1,256,160 875,321 – Interest expense paid (-) (666,324) (359,427) – Dividend and similar income 38,824 29,159 – Net fee and commission income (+/-) 265,416 254,808 – Payroll costs (-) (326,452) (291,966) – Net premium income (+) 241,177 429,162 – Other insurance income (charges) (+/-) (126,959) (98,181) – Other costs (-) (237,975) (256,009) – Other revenues (+) 60,074 111,101 – Taxation (-) (76,652) (71,501)

2 Liquidity generated/absorbed by financial assets (3,547,110) (1,812,685) – Financial assets held for trading 646,034 (107,943) – Financial assets at fair value 320,538 (49,405) – Financial assets available for sale 184,251 37,411 – Loans and advances to customers (4,347,797) (1,513,877) – Loans and advances to banks: demand (302,413) (181,617) – Loans and advances to banks: other receivables (5,626) (98,161) – Other assets (42,097) 100,907

3. Liquidity generated/absorbed by financial liabilities 3,254,230 1,311,202 – Deposits from banks: demand 89,225 (16,288) – Deposits from banks: other payables 1,089,218 (1,203,590) – Due to customers 606,765 963,371 – Debt securities in issue 649,910 729,765 – Financial liabilities held for trading (39,170) 223,586 – Financial liabilities at fair value 868,259 722,324 – Other liabilities (9,977) (107,966)

Net liquidity generated/absorbed by operating activities 134,409 120,984

58 59 B. INVESTING ACTIVITIES

1. Liquidity generated by 79,393 9,063 – Dividends collected on equity investments 863 863 – Disposal/redemption of financial assets held to maturity 479 7,162 – Disposal of property, plant and equipment 5,053 1,038 – Disposal of equity investments 72,998 -

2. Liquidity absorbed by (550,297) (74,289) – Purchase of equity investments (6,029) (21,975) – Purchase of businesses (481,353) - – Purchase of property, plant and equipment (32,279) (16,869) – Purchase of intangible assets (30,636) (35,445)

Net liquidity generated/absorbed by investing activities (470,904) (65,226)

C. FUNDING ACTIVITIES – Issue/purchase of treasury shares 436,229 15,826 – Distribution of dividends and other purposes (68,292) (58,230)

Net liquidity generated/absorbed by funding activities 367,937 (42,404)

NET LIQUIDITY GENERATED/ABSORBED IN THE YEAR 31,442 13,354

RECONCILIATION 31/12/2007 31/12/2006 Cash and cash equivalents at the beginning of the year 155,504 142,150

Net liquidity generated/absorbed in the year 31,442 13,354

Cash and cash equivalents at the end of the year 186,946 155,504

58 59 TM

. EXPLANATORY NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS

Part A – Accounting policies Part B – Information on the consolidated balance sheet Part C – Information on the consolidated income statement Part D – Segment information Part E – Information on risks and related hedging policy Part F – Information on consolidated equity Part G – Combinations of companies and businesses Part H – Related-party transactions Part I – Equity-settled payment arrangements

61 Part A ACCOUNTING POLICIES

A. 1 - GENERAL INFORMATION

Section 1 – Declaration of conformity with IFRS

The consolidated financial statements, consisting of the balance sheet, the income statement, the statement of changes in equity, the statement of cash flows and these explanatory notes, accompanied by the report of the Board of Directors, have been prepared in accordance with the international accounting standards IAS/IFRS adopted into Italian law by Decree 38/2005.

Section 2 – Basis of preparation

The consolidated financial statements are prepared on a going concern basis and with reference to the general criteria listed below: – true and fair view; – matching principle; – consistency of comparison; – no-offset, except where specifically allowed; – substance over form; – prudence.

Consistent with art. 9 of Decree 38/2005, the consolidated financial statements have been prepared with reference to the formats and rules specified in Bank of Italy Circular 262 dated 22 December 2005. Additional information, considered necessary to give a true and fair view of the financial statements, has also been provided even if not specifically required by the regulations.

The amounts contained in the balance sheet, the income statement, the statement of changes in equity, the statement of cash flows and these explanatory notes are, except where indicated otherwise, stated in thousands of euro. The roundings have been made in accordance with the related regulations.

Starting with these consolidated financial statements, the increase in provisions for future personnel expenses in connection with productivity bonuses and incentive schemes is being classified in “Payroll” costs, rather than in “Net provisions for risks and charges” like before. The income statement figures for 2006 have been reclassified accordingly.

Again, as from 2007 the consolidated financial statements are no longer reporting the capitalization section of the company pension fund for employees of the subsidiary Cariprato SpA, previously classified in Provisions for risks and charges – Pensions and similar commitments. This is a defined contribution pension scheme for which the subsidiary’s sole obligation is to pay in an annual contribution in proportion to the salary paid to its members. This section is no longer being reported in the consolidated financial statements, in compliance with IAS 19. This change has been made after obtaining legal advice which excludes any additional obligations for the subsidiary on top of the annual contribution mentioned above.

As a result, the figures reported in the 2006 consolidated financial statements and corresponding explanatory notes have been restated to make them comparable with those in 2007.

Lastly, following changes in the scope of consolidation – discussed in the relevant section of the Report on Operations – the figures reported in certain sections, line items and tables of the explanatory notes may not be directly comparable with those reported in the prior year.

62 63 Section 3 – Scope of consolidation and methodology

The carrying value of investments consolidated on a line-by-line basis, including their assets and liabilities, off-balance sheet transactions, as well as income and expenses, is eliminated against the related interest in their equity at the time they were acquired or consolidated for the first time; any differences are allocated, as far as possible, to the assets and liabilities of the consolidated companies concerned and residual amounts are reported as “Goodwill”.

Investments in joint ventures and associates are measured using the equity method, adjusting their carrying values to reflect the Group’s interest in the equity reported in their financial statements at the time they were acquired or consolidated for the first time. Where not attributable to specific asset and liability line items, the differences emerging when such investments are consolidated for the first time are allocated to “Goodwill”. Subsequent changes are allocated to equity investments, with the matching entry to “Profit (loss) from equity investments” in the income statement.

Equity investments classified as “non-current assets and disposal groups” in compliance with IFRS 5, are carried at the lower of their book or fair value net of selling costs.

Dividends distributed within the Group are reversed back to reserves since the related income was recognized by the individual companies in prior years.

Receivables, payables, income and expenses arising from transactions between Group companies are eliminated, except where insignificant.

The balance sheets and income statements used for consolidation purposes were those approved by the Boards of Directors of the individual companies as of 31 December 2007; the financial statements prepared under IAS/IFRS were used directly while, for companies that prepared their financial statements under Italian GAAP, balance sheets and income statements were prepared in accordance with the accounting policies adopted by the Parent Bank.

Investments in companies carried at equity are stated with reference to the equity reported in their 2006 financial statements, if their financial statements for the current year have not yet been approved by their respective Boards of Directors.

Lastly, the income statements of companies joining or leaving the scope of consolidation in the year or those whose method of consolidation changes in the year are consolidated from the date of acquisition or up until the date of disposal or from/until the date of change respectively.

62 63 1. Equity investments in subsidiary companies and joint ventures

Name Location Nature of holding Investment details (1) Holder % interest held

A. COMPANIES A.1 COMPANIES CONSOLIDATED LINE-BY-LINE 1. “BANCA POPOLARE DI VICENZA SCpA Capital stock Euro 261,656,498 in shares of par value Euro 3.75” VICENZA Parent Bank 2. “CASSA DI RISPARMIO DI PRATO SpA Capital stock Euro 103,300,000 in shares of par value Euro 51.65” PRATO 1 B. Pop. Vicenza 79,00 3. “Banca Nuova SpA Capital stock Euro 29,783,868 in shares of par value Euro 3” PALERMO 1 B. Pop. Vicenza 99,59 4. “FARBANCA SpA Capital stock Euro 2,824,210 in shares of par value Euro 10” CASALECCHIO DI RENO (BO) 1 B. Pop. Vicenza 47,44 5. “VERONA GESTIONI SGR SpA Capital stock Euro 6,000,000 in shares of par value Euro 1,000” VERONA 4 B. Pop. Vicenza 50,00 6. “IMMOBILIARE STAMPA SpA Capital stock Euro 125,000,000 in shares of par value Euro 500” VICENZA 1 B. Pop. Vicenza 100,00 7. “MONFORTE 19 SRL Capital stock Euro 10,000 in shares of par value Euro 1” VICENZA 1 B. Pop. Vicenza 100,00 8. “BPV FINANCE INTERNATIONAL PLC Capital stock Euro 103,291 in shares of par value Euro 1” DUBLIN 1 B. Pop. Vicenza 99,99 9. “NORDEST MERCHANT SpA Capital stock Euro 2,000,000 in shares of par value Euro 1” VICENZA 1 B. Pop. Vicenza 80,00 10. “NEM SGR SpA Capital stock Euro 1,200,000 in shares of par value Euro 1” VICENZA 1 Nordest Merchant 100,00 11. “NEM DUE SGR SpA Capital stock Euro 1,200,000 in shares of par value Euro 1” VICENZA 1 Nordest Merchant 100,00 12. “B.P.VI FONDI SGR SpA Capital stock Euro 10,000,000 in shares of par value Euro 5” VICENZA 4 B. Pop. Vicenza 50,00 13. “SERVIZI BANCARI SpA Capital stock Euro 100,000 in shares of par value Euro 50” VICENZA 1 B. Pop. Vicenza 100,00 14. “PRESTINUOVA SpA B. Nuova 88,67 Capital stock Euro 25,263,160 PALERMO 1 in shares of par value Euro 10” B. Pop. Vicenza 6,33 15. “NUOVA MERCHANT SpA B. Pop. Vicenza 80,00 Capital stock Euro 1,100,000 ROME 1 in shares of par value Euro 1” B. Nuova 20,00

Key: (1) Nature of holding: 1 = majority of voting rights at ordinary stockholders’ meeting 2 = dominant influence at ordinary stockholders’ meeting

64 65 3 = agreements with other stockholders 4 = other forms of control 6 = coordinated control under art. 26.1 of Decree 87/92 6 = coordinated control under art. 26.2 of Decree 87/92 7 = joint control

Section 4 – Subsequent events

The principal events that have taken place since the accounting reference date of the consolidated financial statements (31 December 2007) and the date of their approval by the Parent Bank’s Board of Directors (18 March 2008) are summarized below.

On 15 January 2008, the Board of Directors of the Parent Bank Banca Popolare di Vicenza decided, with reference to the Capital strengthening program already described in the specific section of the Report on Operations, to request the next Stockholders’ Meeting to approve a new authority, after cancelling the previous one given in 2005 to the extent not exercised, for the Board to increase capital stock for cash by up to 62,250,000 euro at par, in one or more blocks for a maximum period of three years from the date of the resolution. It will also be proposed that under this authority the Board of Directors also has the power to make future capital increases by adopting resolutions that, if needs be, exclude or limit stockholder pre-emption and subscription rights, either by establishing principles for allocating any unsubscribed capital or by limiting subscription to institutional investors only. This request will allow the Parent Bank to make capital increases not only for strengthening capital but also for strengthening the role of institutional investors, as recommended by the Supervisory Authorities.

On 29 January 2008, the Parent Bank’s Board of Directors, in agreement with the other shareholder concerned Cattolica Assicurazioni, approved the proposed merger of Verona Gestioni SGR S.p.A. into BPVi Fondi SGR S.p.A. This operation, already announced when entering the partnership agreement with Cattolica Assicurazioni, will make it possible to create a specialist asset management “product factory” at the service of the BPVI Group and Cattolica Assicurazi- oni, resulting in significant synergies from integration and the development of a centre of exper- tise and recognized brand name within the industry. This merger is expected to be completed by the end of September 2008.

At the start of March 2008 the Bank of Italy issued new supervisory rules concerning the organization and corporate governance of banks. The Supervisory Authorities are seeking to pur- sue a series of objectives in these rules, amongst which the most important is the clear division of roles and responsibilities in the corporate governance of banks in order to foster healthy, efficient credit management. Another important change is the general prohibition on members of boards of statutory auditors from accepting appointments other than those as statutory auditors in other companies of the financial group or conglomerate, and in companies in which the bank directly or indirectly holds strategic investments (ie. 10% of capital stock of the equity investment and 5% of the banking group’s consolidated regulatory capital). Lastly, there are very detailed guidelines concerning management remuneration, requiring the stockholders’ meeting to be involved in defining remuneration policies and stock option plans .

Gianfranco Simonetto resigned as a director of the parent bank BPVi on 5 March 2008. As stated in the related press release, Mr. Simonetto took this decision to avoid the emergence of a possible incompatibility after CONSOB issued new rules on professional relationships between members of the board of statutory auditors and directors. Following his resignation, the Parent Bank’s Board of Directors co-opted Mr. Divo Gronchi as Managing Director on 18 March 2008, an appointment already planned and announced when Mr. Gronchi rejoined the manage-

64 65 ment of Banca Popolare di Vicenza. The same meeting appointed Mr. Samuele Sorato as Gen- eral Manager.

Lastly, on 6 March 2008 a notice of indictment and a notice advising the conclusion of investiga- tions, relating to criminal proceedings brought by the Milan Public Prosecutor’s Office, in which the persons being investigated include Giovanni Zonin, BPVI chairman, and Divo Gronchi, for having, in conjunction with other bank representatives, organized, conducted and taken part in a secret build-up of shares in Banca Nazionale del Lavoro, with the goal of obtaining control of the parent bank and of blocking, in avoidance of the takeover rules, the takeover bid announced by BBVA. The Parent Bank Banca Popolare di Vicenza is required to answer, as the party liable for the administrative offence under para.1 (a) of art. 5, art. 6 and paras. 1 and 2 of art. 25-sex- ies of Decree 231/2001, for not having, before commission of the deeds ascribed to Giovanni Zonin and Divo Gronchi, adopted and effectively implemented organizational and management models capable of preventing offences such as the one being investigated. The Parent Bank has engaged an external firm of lawyers for its defence.

Section 5 – Other matters

The consolidated financial statements have been audited by KPMG SpA, an independent firm of auditors.

66 67 A.2 - PART RELATING TO THE PRINCIPAL FINANCIAL STATEMENT LINE ITEMS

This section describes the accounting policies adopted for the preparation of the consolidated financial statements as of 31 December 2007. These policies were applied on a basis consistent with those adopted for the preparation of the 2006 financial statements, which were also prepared under IAS/IFRS.

ASSETS

1. Financial assets held for trading

Classification

This line item comprises the financial instruments held for trading in the short term; specifically: • debt securities, whether listed or unlisted, held for trading; • listed equity instruments held for trading; • unlisted equity instruments held for trading, but only if their fair value can be determined on a reliable basis; • asset-backed debt securities (ABS), senior or mezzanine, issued by special-purpose vehicles (SPV) as part of securitizations by the Parent Bank or by third parties; • structured securities; • units in mutual funds and sicavs held for trading; • derivative contracts with a positive fair value at the reporting date, except for contracts that are designated as effective hedging instruments; if the fair value of a derivative contract subsequently becomes negative it is recorded as a financial liability held for trading.

Derivative contracts include “implicit” derivatives consisting of the derivative component embedded in a primary financial instrument, known as the “host contract”, and forward transactions in currencies, securities, goods and precious metals. An implicit derivative is recognized separately from the underlying contract and provided the structured instrument (host contract plus implicit derivative) is not classified in this category or among “financial assets at fair value”, when all of the following conditions are satisfied:

1. its economic and risk characteristics are not closely correlated with those of the “host” instrument; 2. the separated embedded instrument meets the definition of a derivative; 3. the hybrid instrument is not carried at fair value through the income statement.

Financial instruments are designated as financial assets held for trading upon initial recognition. They cannot be reclassified subsequently.

Recognition

The initial recognition of financial assets held for trading takes place: on the settlement date for debt securities, equity instruments and units in mutual funds and sicavs; on the subscription date for derivative contracts.

Financial assets held for trading are initially recognized at their fair value and the transaction costs and/or income directly attributable to them are not recognized. The fair value of instruments acquired on market terms is represented by their purchase cost.

66 67 Measurement and recognition of components affecting the income statement

Subsequent to initial recognition, financial assets held for trading are stated at fair value through the income statement. IAS 39 defines fair value as “the amount for which an asset could be ex- changed, or a liability settled, between knowledgeable, willing parties in an arms’-length transaction”. Fair value is determined as follows: – the “quoted market price” of financial instruments traded in an “active market” – the prices struck in over-the-counter markets or, otherwise, using generally accepted internal pricing models, if the financial instruments are not traded in an “active market”.

If the fair value of financial assets cannot be determined reliably on the above basis, they are stated at cost and recorded as “financial assets available for sale”.

Gains and losses realized on sale or redemption and unrealized gains and losses deriving from changes in the fair value of financial assets held for trading are classified in “net trading income” in the income statement, together with the exchange gains and losses associated with foreign currency financial assets and liabilities.

Derecognition

Financial assets held for trading are derecognized when the contractual rights over the related cash flows expire or when the financial asset is transferred together with substantially all the contractual risks and benefits associated with its ownership.

2. Financial assets at fair value

Classification

This line item comprises the assets or groups of assets designated at fair value through the income statement, under the fair-value option (FVO) envisaged by IAS 39. In particular, the FVO is used when it eliminates or significantly reduces accounting imbalances deriving from the inconsistent recognition of financial instruments that are correlated (natural hedges) or covered by derivative contracts which, due to difficulties and complexities, cannot be recognised as hedges. The FVO is also used in the presence of an implicit derivative that meets the conditions described in note 11. This avoids separating it from the host instrument by stating the entire financial instrument at fair value.

Recognition, measurement, derecognition and recording of components affecting the income statement

The principles applying to the recognition, measurement, derecognition and recording of the components affecting the income statement of financial assets at fair value are the same as those relating to “financial assets held for trading”.

68 69 3. Financial assets available for sale

Classification

This line item comprises the non-derivative financial assets that are not classified in the forego- ing categories or as “receivables”. Accordingly, this is a residual category that includes: • unlisted equity instruments, unless originally attributed to the portfolio of financial assets held for trading; • securities that guarantee transactions arranged with third parties, if not classified elsewhere; • units in mutual funds and sicavs, unless originally attributed to the portfolio of financial assets held for trading; • junior asset-backed debt securities issued by SPVs as part of own or third-party securitizations; • equity investments that do not represent interests in subsidiaries, associates or joint ventures; • other debt and equity instruments that cannot be classified in the above categories.

Recognition

Financial assets available for sale (AFS) are initially recognized on the settlement date, on the basis of their fair value, as uplifted by any directly-attributable acquisition costs.

Measurement and recognition of components affecting the income statement

Subsequent to initial recognition, AFS financial assets are stated at fair value; the profits and losses deriving from any changes in fair value are recorded in a specific equity reserve until the financial assets concerned are derecognized or a permanent impairment of value is recognized.

If an AFS financial asset suffers an impairment loss, the accumulated unrealized losses deferred to equity are released to “net impairment adjustments to financial assets available for sale” in the income statement. Write-backs of AFS financial instruments are credited to the income statement if they are debt securities or to equity if they are equity instruments.

Fair value is determined on the basis described in relation to financial assets held for trading. If the fair value of financial assets cannot be determined on a reliable basis, they are stated at cost.

The interest income on these financial assets is determined using the effective interest method.

Any exchange gains or losses on AFS financial assets are recorded in the income statement if they relate to monetary items (e.g. debt securities) and as part of equity if they relate to non- monetary items (e.g. equity instruments).

Derecognition

AFS financial assets are derecognized when the contractual rights over the related cash flows expire or when the financial asset is transferred together with substantially all the contractual risks and benefits associated with its ownership.

68 69 4. Financial assets held to maturity

Classification

This category comprises non-derivative debt instruments quoted in “active markets”, with fixed maturities and fixed or determinable payments, which the Bank intends and is able to hold until maturity. These include debt securities with maturities/residual lives of not less than 24 months which comply with the quantitative limits established at Group level, as authorized by the Board of Directors of the Parent Bank.

Recognition

Financial assets held to maturity are initially recognized on the settlement date, on the basis of their fair value, as uplifted by any directly-attributable acquisition costs.

Measurement and recognition of components affecting the income statement

Subsequent to initial recognition, financial assets held to maturity are measured at amortized cost, using the effective interest method. Profits and losses relating to these assets held to maturity are recorded in the income statement at the time of derecognition. An impairment test is carried out at the reporting date to check for objective evidence of any loss in value. Any losses identified are charged to the income statement under “net impairment adjustments to financial assets held to maturity”. If the reasons for such losses cease to apply due to events subsequent to the write-down, the original amounts are reinstated by crediting the related write-backs to the income statement. Write-backs do not exceed the amortized cost that the instrument would have had in the absence of earlier write-downs.

The interest income on these financial assets is determined using the effective interest method.

Derecognition

Financial assets held to maturity are derecognized when the contractual rights over the related cash flows expire or when the financial asset is transferred together with substantially all the contractual risks and benefits associated with its ownership.

5. Loans and advances to banks

Classification

This line item comprises unlisted financial assets due from banks (current accounts, guarantee deposits, debt securities, etc.) that have been classified in the loan portfolio.

The balance includes amounts due from Central Banks, other than unrestricted deposits (e.g. the compulsory reserve).

Details of the recognition, measurement, derecognition and recording of these loans can be found in the subsequent note on “loans and advances to customers”.

70 71 6. Loans and advances to customers

Classification

Loans to customers include short and long-term finance granted directly to customers or purchased from third parties, which is repayable on fixed or determinable dates and is not quoted in an active market.

This category also includes unlisted debt securities acquired on initial placement, where the lending element prevails over the investment element, and the purchase essentially represents the granting of a loan.

Recognition

The initial recognition of a loan takes place on the grant date or, in the case of debt securities, on the settlement date, with reference to the fair value of the financial instrument. This is the amount paid out, or the subscription price, including the directly-related and determinable costs and commissions applying from the start of the transaction.

Costs with the above characteristics are excluded if they are reimbursable by the borrower or represent normal internal administrative costs.

Measurement and recognition of components affecting the income statement

Subsequent to initial recognition, loans to customers are measured at amortized cost. This is their initially-recorded value as decreased/increased by repayments of principal, write-downs/ write-backs and the amortization – determined using the effective interest method – of the difference between the amount paid out and that repayable on maturity, which typically represents costs/income directly attributable to the individual loans.

The effective interest rate is the rate that discounts the flow of estimated future payments over the expected duration of the loan so as to obtain exactly the net book value at the time of initial recognition, which includes directly-related transaction costs and all fees paid or received between the contracting parties. This financial method of accounting distributes the economic effect of costs/income over the expected residual life of each loan.

Estimates of the flows and the contractual duration of the loan take account of all contractual clauses that could influence the amounts and due dates (such as early repayments and the various options that can be exercised), but without considering any expected losses on the loan.

The amortized cost method is not applied to short-term loans, since the discounting effect would be negligible, and these are therefore stated at historical cost. The same measurement criterion is applied to loans without a fixed repayment date or which are repayable upon demand.

In addition, an analysis is performed to identify any problem loans for which there is objective evidence of possible impairment. This category includes loans classified as “non-performing”, “watchlist”, “restructured” or “past due or overdrawn for more than 180 days”, as defined by the supervisory regulations.

Non-performing loans are evaluated on a case-by-case basis, regardless of the amounts involved.

70 71 Watchlist loans in excess of 150,000 euro are assessed on a case-by-case basis, while the remaining positions are evaluated on an overall basis.

The adjustment to the value of each loan represents the difference between its amortized cost (or historical cost for short-term and demand loans) at the time of measurement and the discounted value of the related future cash flows, determined using the original effective interest rate.

Key elements in determining the present value of future cash flows include the estimated realizable value of any available guarantees, the expected timing of recoveries and the forecast loan-recovery costs. Cash flows relating to loans due to be recovered in the short term are not discounted.

In particular, the approach taken for determining the recoverable value of non-performing loans depends on their amount: • up to 25,000 euro, the positions are written down case-by-case but are not discounted, since they are frequently not taken to court, but sold after the usual attempts to obtain recovery on an amicable basis - these loans generally remain in this category for not more than 12/18 months, representing the short term; • from 25,000 euro to 150,000 euro, the positions are analyzed on a case-by-case basis to estimate the amount recoverable, which is discounted over the average recovery period, as determined with reference to historical-statistical information; • amounts exceeding 150,000 euro are analyzed on a case-by-case basis to estimate the amount recoverable, which is discounted over the likely recovery period, as determined by the competent corporate functions.

Watchlist loans exceeding 150,000 euro are analyzed on a case-by-case basis to estimate the amount recoverable, which is discounted over the likely recovery period, as determined by the competent corporate functions. Watchlist loans falling below the above threshold, and higher amounts that are not subject to specific lending risk, are assessed on an overall basis that considers the estimated future cash flows, as adjusted for the expected losses determined using probability of default (PD) and loss given default (LGD) parameters. The resulting cash flows are discounted using the original effective rate for each loan outstanding at the reporting date.

Restructured loans are valued by discounting the “implied” loss arising from restructuring the position. If restructured loans are predicted to produce a loss over and above the “implied” loss above, they are immediately put on the watchlist and valued in accordance with the rules applying to this category.

Loans past due and/or overdrawn for more than 180 days are written down on an overall basis that considers the estimated future cash flows, as adjusted for the expected losses determined using probability of default (PD) and loss given default (LGD) parameters, discounting the nominal flows using the effective rate for each loan.

Loans for which no objective evidence of loss has been individually identified, i.e. performing loans, including those to residents in countries at risk, are tested for impairment on an overall basis. This test is performed by grouping loans into categories that reflect a similar degree of lending risk. The related loss percentages are then estimated with reference to historical information, in order to measure the inherent loss for each category of loan. The estimated future cash flows are determined using probability of default (PD) and loss given default (LGD) parameters and the resulting flows are discounted using the effective rate for each loan.

The write-down is represented by the difference between the amortized cost, or historical cost, of the loans in each category and the present value of the amount deemed recoverable.

72 73 Provisions made for an impaired loan are only reversed if the credit quality has improved to the extent that timely recovery of the principal and interest, with respect to the original terms for the loan contract, is reasonably certain, or if the amount actually recovered exceeds the recoverable amount estimated previously. Write-backs include the positive effect of discounting adjustments made due to the progressive reduction in the estimated time required to recover the related loans.

No write-downs are recorded in relation to loans represented by repurchase agreements, since they are not subject to lending risk, or to loans to non-profit organizations and local and public administrations.

Adjustments, net of previous provisions and the partial or total recovery of amounts previously written down, are recorded in income statement line item 130 a) “net impairment adjustments to loans and advances”.

Derecognition

Loans are derecognized as assets when they are deemed to be unrecoverable or are transferred together with substantially all the related risks and benefits.

7. Hedging derivatives

Classification

This line item reports the derivative contracts designated as effective hedging instruments which have a positive fair value at the reporting date.

Derivative contracts are intended to neutralize possible losses on certain elements or groups of elements due to a given risk (e.g. a rise in interest rates), via the generation of profits if the events associated with that risk should actually occur.

Derivatives not held for hedging purposes are classified as “financial assets held for trading”.

At the time that a hedging derivative is arranged, the Bank classifies it as one of the following types of hedge: • fair value hedge of a given asset or liability: the objective is to hedge the exposure to changes in fair value of an item caused by given risks; • cash flow hedge attributable to a particular asset or liability: the objective is to hedge the exposure to changes in the future cash flows associated with an item caused by given risks; • hedge of the effects of an investment denominated in foreign currency: the objective is to hedge the risks associated with investing in a foreign operation denominated in foreign currency.

The derivative instrument is classified as a hedge if it has been formally designated as such, there is a documented relationship between the hedged instrument and the hedging instrument, and it is effective – prospectively and retrospectively – both at the start of the hedge and throughout its life.

A hedge is considered effective if the hedging instrument is able to generate a cash flow or a change in fair value that is consistent with that of the hedged instrument. More precisely, the hedge is effective when changes in the fair value (or cash flows) of the hedging instrument neutralize the changes in the hedged instrument, deriving from the risk being hedged, within an interval of 80%-125%. 72 73 The effectiveness of the hedge is assessed at the start of the hedge and throughout its life and, in particular, on each reporting date, using: • prospective tests that justify the adoption of hedge accounting by showing the expected effectiveness of the hedge in future periods; • retrospective tests that show the effectiveness of the hedge during the reference period.

If the tests do not confirm the effectiveness of the hedge, the hedge accounting described above is terminated and the related derivative contract is reclassified among the “financial assets held for trading”.

In addition, transactions are no longer classified as hedges if: • the hedge created by the derivative ceases; • the derivative expires, is sold, terminated or exercised; • the hedged item is sold, expires or is redeemed; • the hedge no longer meets the criteria to qualify for hedge accounting.

Recognition

The initial recognition of hedging derivatives takes place when their fair value is determined.

Measurement and recognition of components affecting the income statement. Subsequent to initial recognition, hedging derivatives are stated at fair value on the basis described below: • in the case of fair value hedges, changes in the value of the hedged instrument and the hedging instrument are reflected in the income statement, in order to offset effectively changes in the fair value of the hedged item against the opposite changes in the fair value of the hedging instrument. Any difference, representing the ineffective portion of the hedge, therefore represents the net economic effect of the hedge; • in the case of cash flow hedges, changes in the fair value of the derivative are recorded in equity, to the extent that the hedge is effective, and are only released to the income statement when the related cash flows are actually generated by the hedged item. If the hedge is not effective, changes in the fair value of the hedging contract are recorded in the income statement; • hedges of investments denominated in foreign currency are recorded in the same way as cash flow hedges.

Derivatives valued in accordance with the fair value option are stated at fair value through the income statement.

Hedging instruments only consist of derivative contracts, excluding therefore any internal deals or other types of financial instrument.

The fair value of derivatives is determined with reference to prices published on regulated markets or provided by operators, to option pricing models (making assumptions based on market and economic conditions), or to generally accepted models for the discounting of future cash flows.

Derecognition

Hedging derivatives are derecognized on disposal, if this substantially involves the transfer of all the risks and benefits associated with them. If the hedge becomes ineffective, the hedge accounting described above ceases and the derivative contract is reclassified to “financial assets held for trading”.

74 75 8. Equity investments

Classification

This line item comprises investments in joint ventures and associated companies valued using the equity method.

Recognition

Equity investments are valued using the equity method.

Measurement criteria

Changes in the Group’s interest in a company’s equity between one accounting period and another are reported as “profit/loss from equity investments” with a matching entry to “equity investments” in the balance sheet.

Derecognition

Equity investments are derecognized on expiry of the contractual rights over the related financial flows, or when the investment is sold with the transfer of essentially all the related risks and benefits of ownership.

Recognition of components affecting the income statement

Consistent with IAS 18, dividends are recorded when the stockholders’ right to receive them is established, which is subsequent to the related resolution adopted by the stockholders of the declaring company.

9. Property, plant and equipment

Classification

This line item comprises the fixed assets held for use in the generation of income, for rent or for administrative purposes, such as land, business property, investment property, installations, furniture, furnishings and all types of equipment.

Business property is that held for the provision of services or for administrative purposes, while investment property is that owned to earn rental income and/or with a view to capital appreciation.

Property, plant and equipment also include leasehold improvements, if they can be separated from the related assets. If these items are expected to generate future benefits, but are not functionally and operationally independent, they are classified as “other assets” and depreciated over the expected useful life of the improvements or the residual lease period, whichever is shorter.

Amounts paid in advance to acquire and restructure assets not yet used for productive purposes are capitalized, but not depreciated.

74 75 Recognition

Property, plant and equipment are initially recorded at cost, including all directly attributable costs of bringing them to working condition. Expenditure that improves an asset or increases the future economic benefits expected from the asset is allocated to the asset concerned and depreciated over its remaining useful life.

Measurement and recognition of components affecting the income statement

Subsequent to initial recognition, property, plant and equipment are stated at cost, net of accumulated depreciation and any impairment write-downs, consistent with the “cost model” described in para. 30 of IAS 16.

Property, plant and equipment are systematically depreciated over their useful lives on a straight- line basis, except for: • land, whether acquired separately or included in the value of buildings, which is not depreciated since it has an unlimited useful life. With regard to free-standing properties, the value of the land is separated from the value of the related buildings by internal and/or independent expert appraisals, unless this information is directly available from the purchase contract; • works of art, which are not depreciated since they normally have an indefinite useful life and their value is likely to increase over time; • investment properties, which are stated at fair value in accordance with IAS 40.

The investment properties covered by IAS 40 are stated at the market value determined by independent appraisals and changes in their fair value are recorded in “net gains (losses) arising on fair value adjustments to property, plant and equipment and intangible assets” in the income statement. The depreciation charge for assets acquired during the year is determined on a daily basis from the time they enter into service. The depreciation charge for assets sold and/or retired during the year is determined on a daily basis up to the date of disposal and/or retirement.

At each reporting date, if there is evidence that the value of an asset may be impaired, its carrying value is compared with its recoverable value, being either its fair value net of any selling costs or its value in use, represented by the present value of the future cash flows to be generated by the asset, whichever is greater. Any adjustments are recorded as “net gains (losses) arising on fair value adjustments to property, plant and equipment” in the income statement.

If the reasons for recognizing an impairment loss cease to apply, the consequent write-back cannot cause the value of the asset to exceed its net book value (after depreciation) had no impairment losses been recognized in prior years.

Derecognition

Property, plant and equipment are derecognized upon disposal or when they are retired from use on a permanent basis and no economic benefits are expected from their disposal.

76 77 10. Intangible assets

Classification

This line item reports non-monetary assets without physical form that have the following characteristics: • identifiability; • control over the assets concerned; • existence of future economic benefits.

If any one of these characteristics is missing, the related purchase or internally-generated cost is expensed in the year incurred.

Intangible assets include, in particular, applications software used for a number of years and other identifiable intangible assets over which the Group has legal or contractual rights.

This line item also includes goodwill, representing the positive difference between the purchase cost and the fair value of assets and liabilities acquired as a result of business combinations. In particular, an intangible asset is recorded as goodwill when the positive difference between the fair value of the net assets acquired and their purchase cost (including related charges) represents the ability of the investment to generate future earnings. If this difference is negative (bad- will) or if the goodwill is not justified by the ability of the acquired assets/liabilities to generate future earnings, the difference is recorded directly in the income statement.

Recognition

Intangible assets are initially recorded at cost, including any directly-related charges.

Measurement criteria

Subsequent to initial recognition, intangible assets are stated at cost, net of accumulated amortization and any impairment losses, in accordance with the “cost model” described in para. 74 of IAS 38.

Intangible assets are amortized systematically each year on a straight-line basis over their estimated useful lives. The amortization charge for assets acquired during the year is determined on a daily basis from the time they enter into service. The amortization charge for those sold and/or retired during the year is determined on a daily basis up to the date of disposal and/or retirement.

Assets with an indefinite useful life, such as goodwill, are not amortized but their carrying value is tested periodically for impairment, as required by IAS 36. Any reductions in value, representing the difference between the recorded value of the asset and its recoverable value, are charged as “adjustments of goodwill” in the income statement.

Derecognition

Intangible assets are eliminated from the balance sheet if no future economic benefits are expected or on disposal.

76 77 11. Deferred tax assets and liabilities

Current and deferred income taxes are calculated in accordance with current fiscal legislation.

Income taxes are recorded in the income statement, except for the line items credited or debited directly to equity.

Income taxes reported in the income statement represent a prudent estimate of the current tax charge and the related changes in deferred tax assets and liabilities. In particular, deferred tax assets and liabilities are determined with reference to temporary differences between the book value of assets and liabilities and their tax bases. Deferred tax assets are recognized if they are likely to be recoverable, determined with reference to the individual company’s ongoing ability to generate taxable income.

Deferred tax assets and liabilities are recorded in the balance sheet as, respectively, “Tax assets” and “Tax liabilities”, on an open account basis without offset.

Changes in deferred tax assets and liabilities are recorded in the income statement, except for those relating to gains or losses on AFS financial assets and to changes in the fair value of derivative instruments that hedge future cash flows or investments denominated in foreign currencies, which are recorded directly in equity.

In accordance with para. 52b of IAS 12, no provision for deferred taxation has been recorded in relation to the reserves and revaluation surpluses that are in suspense for tax purposes, since their distribution is not envisaged; in this regard, the Group has not carried out, and has no short or medium-term plans to carry out, any activities which could give rise to the payment such deferred taxes.

In the case of current taxes, payments on account for individual taxes are offset against the related tax payable, with positive balances reported as “current tax assets” and negative balances as “current tax liabilities”.

12. Non-current assets held for sale

Classification

This line item comprises all the non-current assets and groups of assets held for sale pursuant to IFRS 5, as well as those assets and groups of assets whose book value will principally be recovered through sale rather than via continuous use.

Measurement criteria

These assets are measured at the lower of their carrying value or their fair value, net of selling costs, except for the following assets which continue to be valued in accordance with the related accounting policies:

• deferred tax assets; • assets deriving from employee benefits; • financial instruments; • investment property.

78 79 Recognition of components affecting the income statement

Income (interest income, dividends etc.) and expenses (interest expense, depreciation etc.) relating to “groups of assets” and related liabilities held for sale are classified, net of the related current and deferred taxation, as “net profit (loss) from discontinued operations” in the income statement. Income and expenses relating to “individual, non-current assets” held for sale continue to be recorded in the line items concerned.

LIABILITIES AND EQUITY

1. Deposits from banks, due to customers and debt securities in issue

Classification

Deposits from banks, due to customers and debt securities in issue include the various forms of interbank and customer funding, together with the funds gathered by issuing various types of bond and certificates of deposit, net of any amounts repurchased by the Bank. This line item also includes securities which are due at the balance sheet date but have not yet been redeemed.

Recognition

These financial liabilities are initially recorded on receipt of the amounts collected or on the issue of the debt securities.

They are initially measured at the fair value of the liabilities, usually corresponding to the amount collected or the issue price, plus any additional costs/proceeds directly attributable to the individual funding transaction or issue and not reimbursed by the creditor. Internal administrative costs are excluded. The implicit derivatives embedded in the above financial liabilities are separated and valued in accordance with IAS 32 and 39.

Measurement criteria

Following initial recognition, the above financial liabilities are stated at amortized cost using the effective interest method, except that short-term liabilities continue to be stated at nominal value since the effect of discounting is negligible.

Derecognition

Financial liabilities are derecognized when they expire or are settled. Derecognition also applies when issued securities are repurchased, even if this acquisition is only temporary. Any differences between the book value of the derecognized liability and the amount paid are recorded as “gains (losses) on disposal or repurchase of financial liabilities” in the income statement. If, subsequent to repurchase, the Bank places its own securities back in the market, this transaction is treated as a new issue and the liabilities are recorded at the new placement price.

78 79 2. Financial liabilities held for trading

Classification

This line item comprises all the financial liabilities, regardless of their technical form (debt securities, loans etc.), that are classified in the trading portfolio. This line item includes the negative value of trading derivatives and the negative value of implicit derivatives embedded in hybrid contracts but not closely correlated with them, that are, accordingly, separated from the “host” instrument, as well as the negative value of derivative contracts covered by application of the fair value option.

It also includes the liabilities originating from the technical mismatches generated by trading in securities.

Measurement criteria

All trading liabilities are stated at fair value, determined on the basis described in the paragraph on “financial assets held for trading”.

3. Financial liabilities at fair value

Classification

This line item comprises those financial liabilities or groups of financial liabilities stated at fair value through the income statement, following exercise of the fair value option envisaged by IAS 39. At the reporting date, this line item comprises own bonds hedged by derivative contracts, as well as bonds with an embedded derivative contract that has not been separated out.

Recognition, measurement, derecognition and recording of components affecting the income statement

The recognition, measurement, derecognition and recording of the effects on the income statement of the above financial liabilities are the same as those applying to “financial assets at fair value”.

4. Hedging derivatives

This line item reports the financial derivatives designated as effective hedging instruments which have a negative fair value at the balance sheet date. The recognition, measurement, derecognition and recording of the related effects on the income statement are described in the paragraph on the corresponding asset line item.

5. Liabilities associated with non-current assets held for sale

Reference should be made to the paragraph on “non-current assets and groups of assets held for sale”.

80 81 6. Provision for severance indemnities

IFRIC has determined that the provision for severance indemnities is a “post-employment benefit” qualifying as a “defined-benefit plan”, the value of which according to IAS 19 must be determined on an actuarial basis. As a consequence, the year-end actuarial valuation of this line item is carried out with reference to earned benefits using the projected unit credit method. This method involves the projection of future payments with reference to historical and statistical analyses and probabilities, adopting suitable demographic techniques. This makes it possible to calculate the severance indemnities accruing at a specific date on an actuarial basis, distributing the cost over the entire remaining service of the current workforce, and no longer presenting them as a cost payable as if the business were to cease trading on the balance sheet date.

The provision for severance indemnities has been valued by an independent actuary using the method outlined above.

7. Provisions for risks and charges

In accordance with IAS 37, the provisions for risks and charges reflect known obligations (legal or constructive) deriving from past events, the settlement of which is likely to involve the use of economic resources whose timing and extent are uncertain, on condition that a reliable estimate can be made of the amount needed to settle them. If settlement of the liability is likely to be deferred and the effect of discounting would be significant, the provisions are discounted using current market rates.

Increases in provisions for risks and charges are recorded in the appropriate line items of the income statements, depending on the “nature” of the expense. In particular, provisions for future personnel expenses in connection with productivity bonuses and incentive schemes are classified in “Payroll” costs, provisions for tax risks and charges are classified in “Income taxes” and provisions for potential losses not directly attributable to specific line items in the income statement are reported in “Net provisions for risks and charges”.

8. Equity instruments

This line item reports the carrying value of bonds convertible into treasury shares, determined in accordance with IAS 32, since these represent equity instruments other than capital stock and reserves.

80 81 OTHER INFORMATION 1. Treasury shares

Treasury shares acquired by the Group are deducted from equity. No profit or loss deriving from the purchase, sale, issue or cancellation of treasury shares is booked to the income statement. Differences between the purchase and selling prices for these transactions are booked to equity.

Any costs incurred for the purchase of treasury shares are deducted from equity, on condition that they are marginal costs directly attributable to these transactions that would not otherwise have been incurred.

2. Transactions in foreign currency

Foreign currency transactions are initially recognized in euro, by translating the foreign currency amount using the exchange rate prevailing on the date of the transaction.

Foreign currency assets and liabilities are subsequently translated to euro using period-end exchange rates. With regard to repurchase agreements and derivative contracts denominated in foreign currencies, reference is made to the paragraphs on financial assets and liabilities held for trading.

Exchange differences deriving from the settlement of monetary items or from the translation of monetary items using rates other than the initial translation rate, or the closing rate at the end of prior periods, are recorded as “net trading income” in the income statement for the period, to the extent that they relate to foreign currency assets and liabilities other than those carried at fair value or those whose fair value and cash flows are hedged, or hedging derivatives.

3. Repurchase agreements

Repurchase agreements are treated as loans against securities and the amounts received and paid are recorded as payables and loans. In particular, spot sales with forward repurchases are recorded as a payable for the spot amount collected, while spot purchases with forward resales are recorded as a receivable for the spot amount paid. The cost of borrowing and income from lending, comprising interest coupons on securities and the differential between the spot and forward prices for such securities, are recorded as interest in the income statement. These transactions do not determine movements in the securities portfolio.

82 83 4. Criteria for determining fair value

The following criteria are used to determine the fair value of securities4:

• Securities listed on active markets: The fair value of financial instruments listed on active markets is represented by the following prices: – equity instruments and debt securities listed on the Italian Stock Exchange: the official price on the last trading day of the reference period; – equity instruments and debt securities listed on foreign stock exchanges: the official price (or other equivalent price) on the last day of the reference period; – units in mutual funds and sicavs: the official price (or other equivalent price) of the units on the last day of the reference period.

• Securities not listed on an active market: The fair value of financial instruments not listed on active markets is represented by the following prices: – for shares in cooperative banks: the latest price set by the Board of Directors/Stockholders’ Meeting of the issuing bank; – for units in mutual funds and sicavs: the latest unit price communicated by the management company; – for capital accumulation insurance contracts: the redemption value determined in accordance with the issue regulations; – for other debt securities and equities, in the following order: • the reference price for recent transactions; • the prices indicated by reliable information sources, where available, such as ICMA, BLOOMBERG, REUTERS; • the price obtained by applying valuation techniques that are generally accepted by market participants, such as: • for debt securities, their cash flows discounted using the reference rates applying at year end for equivalent residual maturities, taking account of any “counterparty risk” and/or “liquidity risk”; • for equities of significant value, the amount established by independent appraisals, where available, or otherwise the value of the related interest held in the equity reported in the company’s latest approved financial statements; • the price supplied by the issuer, as suitably adjusted to take account of any “counterparty risk” and/or “liquidity risk”; • their purchase price, as adjusted for any impairment, if fair value cannot be measured reliably in the manner indicated above.

4 A financial instrument is deemed to be listed in an “active market” if its prices are readily and regularly available in a price list held by an operator, broker, pricing agency or clearing authority, and such prices reflect actual market transactions booked as part of normal dealing. The definition of “active markets” includes those: • on the List of Regulated Italian Markets authorized by Consob; • in the Section of the List of Regulated Markets concerning foreign markets recognized pursuant to community regulations under art. 67.1 of Decree 58/98; • on the List of Regulated Markets recognized pursuant to art. 67.2 of Decree 58/98. 82 83 The following criteria are used to determine the fair value of derivative contracts:

– derivative contracts traded on regulated markets: their fair value is deemed to be their market price on the last trading day of the year; – over-the-counter derivative contracts: their fair value is deemed to be their market value at the reference date, determined in the following manner depending on the type of contract: • contracts on interest rates: market value is taken to be the so-called “replacement cost”, determined by discounting back to the expected settlement dates, the differences between flows at contract rates and flows at market rates, calculated on an objective basis, current at year-end for equivalent residual maturities; • option contracts on securities and other assets: market value, represented by the theoretical premium at the reference date, is determined by using the Black & Scholes formula, or other equivalent methods; • forward currency transactions: market value is determined using the forward exchange rate current at the above date, for maturities corresponding to those of the transactions concerned; • forward transactions in securities, commodities or precious metals: market value is represented by the “forward” price current at the above date, for maturities corresponding to those of the underlying asset.

The fair value of over-the-counter contracts is determined by adjusting their market value, if positive, by the credit risk associated with the counterparty.

84 85 Part B INFORMATION ON THE CONSOLIDATED BALANCE SHEET ASSETS SECTION 1

Cash and balances with central banks – Line item 10

1.1 Cash and balances with central banks: analysis

Banking Insurance Other 31/12/2007 31/12/2006 group companies businesses

a) Cash 186.946 – – 186.946 155.504 b) Unrestricted deposits with central banks – – – – –

Total 186.946 – – 186.946 155.504 The reported balance includes Euro 6,647 in cash balances held by the 61 branches acquired from the UBI Banca Group on 31 December 2007.

84 85 SECTION 2

Financial assets held for trading – Line item 20

2.1 Financial assets held for trading: breakdown by type

Items/Amounts Banking group Insurance companies Other businesses 31/12/2007 31/12/2006 Listed Unlisted Listed Unlisted Listed Unlisted Listed Unlisted Listed Unlisted

A. Cash assets 1. Debt securities 98.694 58.409 – – – – 98.694 58.409 278.313 103.164 1.1 Structured securities 4.726 16.989 – – – – 4.726 16.989 1 15.897 1.2 Other debt securities 93.968 41.420 – – – – 93.968 41.420 278.312 87.267 2. Equities 17.631 – – – – – 17.631 – 63.865 – 3. Mutual funds 9.812 46.317 – – – – 9.812 46.317 54.374 95.673 4. Loans – – – – – – – – – – 4.1 Repurchase agreements – – – – – – – – – – 4.2 Other – – – – – – – – – – 5. Impaired assets – – – – – – – – – – 6. Assets sold but not derecognized 76.924 3.628 – – – – 76.924 3.628 283.526 30.174

Total A 203.061 108.354 – – – – 203.061 108.354 680.078 229.011

B. Derivatives 1. Financial derivatives – 574.358 – – – – – 574.358 – 622.718 1.1 for trading – 531.060 – – – – – 531.060 – 573.488 1.2 connected with the fair value option – 43.298 – – – – – 43.298 – 49.230 1.3 other – – – – – – – – – – 2 Credit derivatives – – – – – – – – – – 2.1 for trading – – – – – – – – – – 2.2 connected with the fair value option – – – – – – – – – – 2.3 other – – – – – – – – – –

Total B – 574.358 – – – – – 574.358 – 622.718

Total (A+B) 203.061 682.712 – – – – 203.061 682.712 680.078 851.729

“Asset sold but not derecognized” relate to debt securities temporarily sold under funding “repurchase agreements” with customers and banks.

As described in Part A.1 - Section 2 of these explanatory notes, securities owned by the company pension fund for employees of the subsidiary Cariprato SpA are no longer being reported in the balance sheet as from 2007, in compliance with IAS 19. The corresponding securities in 2006 have also been reclassified.

86 87 2.2 Financial assets held for trading: analysis by debtor/issuer

Items/Amounts Banking Insurance Other 31/12/2007 31/12/2006 group companies companies

A. CASH ASSETS 1. Debt securities 157.103 – – 157.103 381.477 a) Governments and central banks 10.176 – – 10.176 150.996 b) Other public entities – – – – 35 c) Banks 75.486 – – 75.486 115.983 d) Other issuers 71.441 – – 71.441 114.463

2. Equities 17.631 – – 17.631 63.865 a) Banks 13.100 – – 13.100 18.065 b) Other issuers: 4.531 – – 4.531 45.800 – insurance companies 797 – – 797 16.786 – financial companies 187 – – 187 4.815 – non–financial companies 3.547 – – 3.547 24.199 – other – – – – –

3. Mutual funds 56.129 – – 56.129 150.047

4. Loans – – – – – a) Governments and central banks – – – – – b) Other public entities – – – – – c) Banks – – – – – d) Other issuers – – – – –

5. Impaired assets – – – – – a) Governments and central banks – – – – – b) Other public entities – – – – – c) Banks – – – – – d) Other issuers – – – – –

6. Assets sold but not derecognized 80.552 – – 80.552 313.700 a) Governments and central banks – – – – 181.265 b) Other public entities – – – – – c) Banks 80.552 – – 80.552 132.435 d) Other issuers – – – – –

Total A 311.415 – – 311.415 909.089

B. DERIVATIVES a) Banks 410.712 – – 410.712 459.955 b) Customers 163.646 – – 163.646 162.763

Total B 574.358 – – 574.358 622.718

Total (A+B) 885.773 – – 885.773 1.531.807

86 87 2.3 Financial assets held for trading: derivatives

2.3.1 attributable to the banking group

Type of derivatives/Underlying assets Interest Currency Equities Loans Other 31/12/2007 31/12/2006 rates and gold

A) Listed derivatives 1. Financial derivatives – – – – – – – a) With exchange of capital – – – – – – – – Options purchased – – – – – – – – Other derivatives – – – – – – – b) Without exchange of capital – – – – – – – – Options purchased – – – – – – – – Other derivatives – – – – – – – 2. Credit derivatives – – – – – – – a) With exchange of capital – – – – – – – b) Without exchange of capital – – – – – – –

Total A – – – – – – –

B. Unlisted derivatives 1. Financial derivatives 508,047 20,362 43,274 – 2,675 574,358 614,999 a) With exchange of capital 198 20,362 2,401 – – 22,961 43,009 – Options purchased 198 10,124 2,401 – – 12,723 28,533 – Other derivatives – 10,238 – – – 10,238 14,476 b) Without exchange of capital 507,849 – 40,873 – 2,675 551,397 571,990 – Options purchased 184,891 – 40,873 – – 225,764 277,364 – Other derivatives 322,958 – – – 2,675 325,633 294,626 2. Credit derivatives – – – – – – – a) With exchange of capital – – – – – – – b) Without exchange of capital – – – – – – –

Total B 508,047 20,362 43,274 – 2,675 574,358 614,999

Total (A+B) 508,047 20,362 43,274 – 2,675 574,358 614,999

88 89 2.3.2 attributable to insurance companies

Type of derivatives/Underlying assets Interest Currency Equities Loans Other 31/12/2007 31/12/2006 rates and gold

Total A – – – – – – –

B. Unlisted derivatives 1. Financial derivatives – – – – – – 7,719 a) With exchange of capital – – – – – – 7,719 – Options purchased – – – – – – 7,719 – Other derivatives – – – – – – – b) Without exchange of capital – – – – – – – – Options purchased – – – – – – – – Other derivatives – – – – – – – 2. Credit derivatives – – – – – – – a) With exchange of capital – – – – – – – b) Without exchange of capital – – – – – – –

Total B – – – – – – 7,719

Total (A+B) – – – – – – 7,719

88 89 2.4 Financial assets held for trading other than those sold and not recognized and impaired assets: changes during the year

2.4.1 attributable to the banking group

Debt securities Equities Mutual Loans Total funds

A. Opening balance 349,747 63,865 113,901 – 527,513

B. Increases 1,801,320 2,126,830 65,240 – 3,993,390 B1. Purchases 1,793,774 2,119,386 63,387 – 3,976,547 B2. Positive changes in fair value 751 8 1,676 – 2,435 B3. Other changes 6,795 7,436 177 – 14,408

C. Decreases 1,993,964 2,173,064 123,012 – 4,290,040 C1. Disposals 1,872,101 2,102,497 121,189 – 4,095,787 C2. Redemptions 99,179 12 – – 99,191 C3. Negative changes in fair value 9,952 7,133 1,168 – 18,253 C4. Other changes 12,732 63,422 655 – 76,809

D. Closing balance 157,103 17,631 56,129 – 230,863 As discussed earlier, the opening balance no longer includes securities owned by the company pension fund for employees of the subsidiary Cariprato SpA.

2.4.2 attributable to insurance companies

Debt securities Equities Mutual Loans Total funds

A. Opening balance 31,730 – 36,146 – 67,876

B. Increases 11,856 – 10,163 – 22,019 B1. Purchases 11,222 – 9,424 – 20,646 B2. Positive changes in fair value 30 – 162 – 192 B3. Other changes 604 – 577 – 1,181

C. Decreases 43,586 – 46,309 – 89,895 C1. Disposals 8,355 – 31,934 – 40,289 C2. Redemptions – – – – – C3. Negative changes in fair value 42 – – – 42 C4. Other changes 35,189 – 14,375 – 49,564

D. Closing balance – – – – – “Other changes” reported in line C4. include the decrease for securities and mutual fund units held by Berica Vita and Vicenza Life which are no longer being consolidated line-by-line after 50% of these two insurance companies was sold.

90 91 SECTION 3

Financial assets at fair value – Line item 30

3.1 Financial assets at fair value: breakdown by type

Items/Amounts Banking group Insurance companies Other businesses 31/12/2007 31/12/2006 Listed Unlisted Listed Unlisted Listed Unlisted Listed Unlisted Listed Unlisted

1. Debt securities – 25,792 – – – – – 25,792 – 228,198 1.1 Structured securities – – – – – – – – – 56,400 1.2 Other debt securities – 25,792 – – – – – 25,792 – 171,798 2. Equities – – – – – – – – – – 3. Mutual funds – – – – – – – – – 118,132 4. Loans – – – – – – – – – – 4.1 Structured – – – – – – – – – – 4.2 Other – – – – – – – – – – 5. Impaired assets – – – – – – – – – – 6. Assets sold but not derecognized – – – – – – – – – –

Total – 25,792 – – – – – 25,792 – 346,330

This line item comprises the junior securities deriving from “own” securitizations carried out by the Group in prior years, which are measured at fair value using a financial-mathematical model, developed together with an independent specialist firm of consultants, that measures the performance of the assets underlying these securities. These valuations were based on the results of the individual underlying transactions at the reference date, using specific assumptions about the principal variables that affect performance (rate of early loan repayments, rate of recognition of non-performing loans, percentage of expected losses, etc.). The application of the fair value option to these securities reduces the mismatch with the related back-to-back swaps arranged as part of the securitizations which are highly correlated with the junior securities.

90 91 3.2 Financial assets at fair value: analysis by debtor/issuer

Items/Amounts Banking Insurance Other 31/12/2007 31/12/2006 group companies companies

1. Debt securities 25,792 – – 25,792 228,198 a) Governments and central banks – – – – – b) Other public entities – – – – – c) Banks – – – – 196,542 d) Other issuers 25,792 – – 25,792 31,656

2. Equities – – – – – a) Banks – – – – – b) Other issuers: – – – – – – insurance companies – – – – – – financial companies – – – – – – non-financial companies – – – – – – other – – – – –

3. Mutual funds – – – – 118,132

4. Loans – – – – – a) Governments and central banks – – – – – b) Other public entities – – – – – c) Banks – – – – – d) Other issuers – – – – –

6. Assets sold but not derecognized – – – – – a) Governments and central banks – – – – – b) Other public entities – – – – – c) Banks – – – – – d) Other issuers – – – – –

Total 25,792 – – 25,792 346,330

92 93 3.3 Assets at fair value, other than those sold but not derecognized and impaired assets: changes during the year

3.3.1 attributable to the banking group

Debt securities Equities Mutual Loans Total funds

A. Opening balance 31,656 – – – 31,656

B. Increases 937 – – – 937 B1. Purchases – – – – – B2. Positive changes in fair value – – – – – B3. Other changes 937 – – – 937

C. Decreases 6,801 – – – 6,801 C1. Disposals – – – – – C2. Redemptions 2,401 – – – 2,401 C3. Negative changes in fair value 4,400 – – – 4,400 C4. Other changes – – – – –

D. Closing balance 25,792 – – – 25,792 The “Other changes” reported in line B3. include the profits (Euro 897) deriving from the early redemption of certain tranches of the above junior securities, which are recorded in line item 110 “Net change in financial assets and liabilities at fair value” of the income statement, and the differential (Euro 40) between opening and closing accruals.

The “Negative changes in fair value” in line C3. relating to the valuation of these junior securities have their matching entry in line item 110 “Net change in financial assets and liabilities at fair value” of the income statement. They have been entirely offset by the collection during the year of related interest income and additional returns, totaling Euro 4,017, recorded respectively in line items 10 “Interest income and similar revenues” and 220 “Other operating charges/income” of the income statement respectively.

92 93 3.3.2 attributable to insurance companies

Debt securities Equities Mutual Loans Total funds

A. Opening balance 196,542 – 118,132 – 314,674

B. Increases 133,487 – 31,255 – 164,742 B1. Purchases 101,798 – 28,825 – 130,623 B2. Positive changes in fair value 9,767 – 1,286 – 11,053 B3. Other changes 21,922 – 1,144 – 23,066

C. Decreases 330,029 – 149,387 – 479,416 C1. Disposals 45,863 – – – 45,863 C2. Redemptions 65,740 – – – 65,740 C3. Negative changes in fair value 25,899 – 2,636 – 28,535 C4. Other changes 192,527 – 146,751 – 339,278

D. Closing balance – – – – – “Other changes” reported in line C.4 include the decrease for securities and mutual fund units held by the insurance companies Berica Vita and Vicenza Life which are no longer being consolidated line-by-line.

94 95 SECTION 4

Financial assets available for sale – Line item 40

4.1 Financial assets available for sale: breakdown by type

Items/Amounts Banking group Insurance companies Other businesses 31/12/2007 31/12/2006 Listed Unlisted Listed Unlisted Listed Unlisted Listed Unlisted Listed Unlisted

1. Debt securities 738,273 90,845 – – – – 738,273 90,845 1,192,127 33,249 1.1 Structured securities – 252 – – – – – 252 – 762 1.2 Other debt securities 738,273 90,593 – – – – 738,273 90,593 1,192,127 32,487 2. Equities 233,268 113,126 – – – – 233,268 113,126 42,911 110,769 2.1 Carried at fair value 233,268 101,236 – – – – 233,268 101,236 42,911 105,592 2.2 Carried at cost – 11,890 – – – – – 11,890 – 5,177 3 Mutual funds 4,235 35,842 – – – – 4,235 35,842 4,439 16,345 4 Loans – – – – – – – – – – 5 Impaired assets – – – – – – – – – – 6 Assets sold but not derecognized – – – – – – – – – –

Total 975,776 239,813 – – – – 975,776 239,813 1,239,477 160,363

The entire interest in Banca Popolare di Intra SpA, was sold during the year, realizing a profit of Euro 5,230 reported in line item 100 “Gains (losses) on disposal or repurchase of” in the income statement. “Unlisted equities carried at cost” refer to certain individually immaterial equity interests, whose fair value cannot be reliably or verifiably determined and so are reported at cost, as adjusted for any impairment.

94 95 4.2 Financial assets available for sale: analysis by debtor/issuer

Items/Amounts Banking Insurance Other 31/12/2007 31/12/2006 group companies businesses

1. Debt securities 829,118 – – 829,118 1,225,376 a) Governments and central banks 76,882 – – 76,882 481,351 b) Other public entities 350 – – 350 4,349 c) Banks 238,647 – – 238,647 279,722 d) Other issuers 513,239 – – 513,239 459,954

2. Equities 346,394 – – 346,394 153,680 a) Banks 46,532 – – 46,532 64,307 b) Other issuers: 299,862 – – 299,862 89,373 – insurance companies 226,762 – – 226,762 506 – financial companies 35,099 – – 35,099 42,777 – non-financial companies 34,586 – – 34,586 37,666 – other 3,415 – – 3,415 8,424

3. Mutual funds 40,077 – – 40,077 20,784

4. Loans – – – – – a) Governments and central banks – – – – – b) Other public entities – – – – – c) Banks – – – – – d) Other issuers – – – – –

Total 1,215,589 – – 1,215,589 1,399,840

The equities relating to insurance companies entirely refer to the 12.719% interest in Cattolica Assicurazioni SpA. The average carrying price of the 6,551,915 shares held is Euro 45.215 per share.

The fair value of this interest has decreased by Euro 65,701 net of tax in the year, with this decrease reflected in the valuation reserves forming part of equity; this valuation is based on the market price on the last trading day of the year. There is no objective evidence that this investment is impaired, which would require the related loss to be recognized in the income statement (para. 59 IAS 39). This is because the reduction in the investment’s value has taken place in a general stockmarket downturn, particularly in the banking and insurance sector which has been heavily penalized by the effects of the US subprime mortgage crisis. It should also be remem-

96 97 bered that this investment forms part of the wider 5-year renewable partnership agreement made with the Cattolica Assicurazioni Group during the year. For these reasons, no impairment losses are being recognized in the income statement for this investment.

4.5 Financial assets available for sale (other than those sold but not derecognized and impaired assets): changes during the year

4.5.1 attributable to the banking group

Debt securities Equities Mutual Loans Total funds

A. Opening balance 820,360 141,939 20,784 – 983,083

B. Increases 293,747 331,095 22,077 – 646,919 B1. Purchases 280,484 317,504 21,697 – 619,685 B2. Positive changes in fair value 98 10,499 380 – 10,977 B3. Writebacks – – – – – – booked to income statement – x – – – – booked to equity – – – – – B4. Transfers from other asset portfolios – – – – – B5. Other changes 13,165 3,092 – – 16,257

C. Decreases 284,989 126,640 2,784 – 414,413 C1. Disposals 226,176 43,592 1,684 – 271,452 C2. Redemptions 19,965 – – – 19,965 C3. Negative changes in fair value 36,412 72,240 1,100 – 109,752 C4. Impairment writedowns 773 10,125 – – 10,898 – booked to income statement 773 10,125 – – 10,898 – booked to equity – – – – – C5. Transfers to other asset portfolios – – – – – C6. Other changes 1,663 683 – – 2,346

D. Closing balance 829,118 346,394 40,077 – 1,215,589 “Other changes” in debt securities reported in line B5. include the opening balances of Verona Gestioni Sgr SpA and Farbanca SpA, both consolidated line-by-line for this first time in the year.

“Impairment writedowns” reported in line C4. mostly refer to the interest in the investment holding company Hopa SpA.

96 97 4.5.2 attributable to insurance companies

Debt securities Equities Mutual Loans Total funds

A. Opening balance 405,016 11,741 – – 416,757

B. Increases 550,728 67,606 – – 618,334 B1. Purchases 547,580 65,083 – – 612,663 B2. Positive changes in fair value 2,637 65 – – 2,702 B3. Writebacks – – – – – – booked to income statement – x – – – – booked to equity – – – – – B4. Transfers from other asset portfolios – – – – – B5. Other changes 511 2,458 – – 2,969

C. Decreases 955,744 79,347 – – 1,035,091 C1. Disposals 468,244 66,511 – – 534,755 C2. Redemptions – – – – – C3. Negative changes in fair value 5,621 1,268 – – 6,889 C4. Impairment writedowns – – – – – – booked to income statement – – – – – – booked to equity – – – – – C5. Transfers to other asset portfolios – – – – – C6. Other changes 481,879 11,568 – – 493,447

D. Closing balance – – – – – “Other changes” reported in line C6. include the decrease for securities held by the insurance companies Berica Vita and Vicenza Life which are no longer being consolidated line-by-line.

98 99 SECTION 5

Financial assets held to maturity – Line item 50

5.1 Financial assets held to maturity: breakdown by type

Type of transaction/ Banking group Insurance companies Other companies 31/12/2007 31/12/2006 Members of the Group Book Fair Book Fair Book Fair Book Fair Book Fair value value value value value value value value value value

1. Debt securities 46,129 44,577 – – – – 46,129 44,577 46,608 46,178 1.1 Structured securities – – – – – – – – – – 1.2 Other debt securities 46,129 44,577 – – – – 46,129 44,577 46,608 46,178 2. Loans – – – – – – – – – – 3. Impaired assets – – – – – – – – – – 4. Assets sold but not derecognized – – – – – – – – – –

Total 46,129 44,577 – – – – 46,129 44,577 46,608 46,178

5.2 Financial assets held to maturity: analysis by debtor/issuer

Type of transaction/Amounts Banking Insurance Other 31/12/2007 31/12/2006 group companies companies

1. Debt securities 46,129 – – 46,129 46,608 a) Governments and central banks – – – – – b) Other public entities – – – – – c) Banks 8,931 – – 8,931 8,916 d) Other issuers 37,198 – – 37,198 37,692

2. Loans – – – – – a) Governments and central banks – – – – – b) Other public entities – – – – – c) Banks – – – – – d) Other issuers – – – – –

3. Impaired assets – – – – – a) Governments and central banks – – – – – b) Other public entities – – – – – c) Banks – – – – – d) Other issuers – – – – –

4. Assets sold but not derecognized – – – – – a) Governments and central banks – – – – – b) Other public entities – – – – – c) Banks – – – – – d) Other issuers – – – – –

Total 46,129 – – 46,129 46,608

98 99 5.4 Financial assets held to maturity (other than those sold but not derecognized and impaired assets): changes during the year

Debt securities Loans Total

A. Opening balance 46,608 – 46,608

B. Increases – – – B1. Purchases – – – B2. Writebacks – – – B3. Transfers from other asset portfolios – – – B4. Other changes – – –

C. Decreases 479 – 479 C1. Sales – – – C2. Redemptions – – – C3. Adjustments – – – C4. Transfers to other asset portfolios – – – C5. Other changes 479 – 479

D. Closing balance 46,129 – 46,129

100 101 SECTION 6

Loans and advances to banks – Line item 60

6.1 Loans and advances to banks: breakdown by type

6.1.1 attributable to the banking group

Type of transaction/Amounts 31/12/2007 31/12/2006

A. Deposits with central banks 87,264 74,354 1. Time deposits – – 2. Compulsory reserve 87,264 59,759 3. Repurchase agreements – 14,595 4. Other – – B. Due from other banks 1,901,566 1,601,466 1. Current accounts and sight deposits 623,892 452,289 2. Time deposits 198,626 612,302 3. Other loans 1,054,845 536,875 3.1 Repurchase agreements 1,039,140 511,525 3.2 Finance leases – – 3.3 Other 15,705 25,350 4. Debt securities 24,203 – 4.1 Debt securities – – 4.2 Other debt securities 24,203 – 5. Impaired assets – – 6. Assets sold but not derecognized – –

Total (book value) 1,988,830 1,675,820

Total (fair value) 1,989,867 1,675,820 In view of the predominantly short-term nature of loans to banks, except for debt securities, their fair value is conventionally taken to be their carrying amount.

The fair value of debt securities classified in this line item is calculated in the same way as for similar financial instruments classified in other balance sheet line items, as described in Part A of these explanatory notes.

100 101 6.1.2 attributable to insurance companies

Type of transaction/Amounts 31/12/2007 31/12/2006

A. Deposits with central banks – – 1 Time deposits – – 2 Compulsory reserve – – 3 Repurchase agreements – – 4 Other – – B. Due from other banks – 4,971 1 Current accounts and signt deposits – 4,971 2 Time deposits – – 3 Other loans – – 3.1 Repurchase agreements – – 3.2 Finance leases – – 3.3 Other – – 4 Debt securities – – 4.1 Debt securities – – 4.2 Other debt securities – – 5 Impaired assets – – 6 Assets sold but not derecognized – –

Total (book value) – 4,971

Total (fair value) – 4,971

102 103 SECTION 7

Loans and advances to customers – Line item 70

7.1 Loans and advances to customers: breakdown by type

7.1.1 attributable to the banking group

Type of transaction/Amounts 31/12/2007 31/12/2006

1. Current accounts 3,837,264 3,012,549 2. Repurchase agreements 7,857 2,375 3. Mortgages 9,755,017 7,393,743 4. Credit cards, personal loans and assignments of one-fifth of salary 431,185 378,633 5. Finance leases – – 6. Factoring – – 7. Other transactions 4,459,329 3,883,927 8. Debt securities 38,284 13,993 8.1 Structured securities – 4,131 8.2 Other debt securities 38,284 9,862 9. Impaired assets 659,872 604,667 10. Assets sold but not derecognized 1,702,650 1,892,637

Total (book value) 20,891,458 17,182,524

Total (fair value) 21,662,903 17,519,501 The reported balance includes Euro 687,502 in loans and advances to customers held by the 61 branches acquired from the UBI Banca Group on 31 December 2007.

Assets sold but not derecognized relate to the mortgages sold as part of the securitizations known as “Berica 5 Residential MBS” and “Berica 6 Residential MBS” which, since they do not satisfy the IAS 39 requirements for derecognition, have been “written back” to the financial statements.

The fair value of loans and advances to customers corresponds to the sum of the future cash flows from the outstanding loans, including interest, discounted with reference to a risk-free rate curve. The expected nominal cash flows are adjusted for expected losses using the probability of default (PD) and loss-given-default (LGD) parameters attributed to each class of risk. The fair value calculation is made for each individual long-term loan, while the fair value of “on demand” relationships is conventionally taken to be their carrying value.

102 103 7.1.2 attributable to insurance companies

Type of transaction/Amounts 31/12/2007 31/12/2006

1. Current accounts – – 2. Repurchase agreements – – 3. Mortgages – – 4. Credit cards, personal loans and assignments of one-fifth of salary – – 5. Finance leases – – 6. Factoring – – 7. Other transactions – 2,306 8. Debt securities – – 8.1 Structured securities – – 8.2 Other debt securities – – 9. Impaired assets – – 10. Assets sold but not derecognized – –

Total (book value) – 2,306

Total (fair value) – 2,306

104 105 7.2 Loans and advances to customers: analysis by debtor/issuer

7.2.1 attributable to the banking group

Type of transaction/Amounts 31/12/2007 31/12/2006

1 Debt securities: 38,284 13,993 a) Governments – – b) Other public entities – – c) Other issuers 38,284 13,993 – non-financial companies 10,976 – – financial companies 27,308 13,993 – insurance companies – – – other – –

2 Loans to: 18,490,652 14,671,227 a) Governments 52 71 b) Other public entities 34,319 30,958 c) Other issuers 18,456,281 14,640,198 – non-financial companies 11,927,220 9,795,412 – financial companies 1,309,518 878,924 – insurance companies 2,463 - 271 – other 5,217,080 3,966,133

3 Impaired assets 659,872 604,667 a) Governments – – b) Other public entities – – c) Other issuers 659,872 604,667 – non-financial companies 485,711 464,846 – financial companies 1,863 1,058 – insurance companies 5 6 – other 172,293 138,757

4 Assets sold but not derecognized 1,702,650 1,892,637 a) Governments – – b) Other public entities – – c) Other issuers 1,702,650 1,892,637 – non-financial companies – – – financial companies – – – insurance companies – – – other 1,702,650 1,892,637

Total 20,891,458 17,182,524

104 105 7.2.2 attributable to insurance companies

Type of transaction/Amounts 31/12/2007 31/12/2006

1 Debt securities: – – a) Governments – – b) Other public entities – – c) Other issuers – – – non-financial companies – – – financial companies – – – insurance companies – – – other – –

2 Loans to: – 2,306 a) Governments – – b) Other public entities – – c) Other issuers – 2,306 – non-financial companies – – – financial companies – 20 – insurance companies – – – other – 2,286

3 Impaired assets – – a) Governments – – b) Other public entities – – c) Other issuers – – – non-financial companies – – – financial companies – – – insurance companies – – – other – –

4 Assets sold but not derecognized – – a) Governments – – b) Other public entities – – c) Other issuers – – – non-financial companies – – – financial companies – – – insurance companies – – – other – –

Total – 2,306

106 107 SECTION 8

Hedging derivatives – Line item 80

Nothing has been classified in this section because the Group does not hold any derivatives falling into in this category.

SECTION 9

Remeasurement of financial assets backed by general hedges – Line item 90

Nothing has been classified in this section because the Group has not taken out any general hedges.

106 107 SECTION 10

Equity investments – Line item 100

10.1 Equity investments in companies under joint control (carried at equity) and those over which significant influence is exercised: disclosures

Name Location Type of relationship Type of investment Holder % held

1. SEC SERVIZI SCpA Capital stock Euro 25,000,000 in shares of par value Euro 1 PADUA 2 B. Pop. Vicenza 47.04 B. Nuova 1.66 Cariprato 1.02 Farbanca 0.10 2. 21 INVESTIMENTI PARTNERS SpA Capital stock Euro 4,250,000 in shares of par value Euro 1 TREVISO 2 B. Pop. Vicenza 20.00 3. MAGAZZINI GENERALI MERCI E DERRATE SpA Capital stock Euro 1,241,317 in shares of par value Euro 5.17 VICENZA 2 B. Pop. Vicenza 25.00 4. INCIPIT Scarl Capital stock Euro 50,000 in shares of par value Euro 1 NAPLES 2 B. Nuova 20.00 5. INTERPORTO DELLA TOSCANA CENTRALE SpA Capital stock Euro 12,075,000 in shares of par value Euro 0.21 PRATO 2 Cariprato 20.00 6. OTTO A PIU’ INVESTIMENTI SGR SpA Capital stock Euro 1,500,000 in shares of par value Euro 100 VARESE 2 B.P.VI Fondi SGR 20.00 7. VICENZA LIFE LTD Capital stock Euro 634,850 in shares of par value Euro 1 DUBLIN 2 B. Pop. Vicenza 50.00 8. BERICA VITA SpA Capital stock Euro 31,000,000 in shares of par value Euro 10 VICENZA 2 B. Pop. Vicenza 49.00 Banca Nuova 1.00 9. ABC ASSICURA SpA Capital stock Euro 8,925,000 in shares of par value Euro 0.51 VERONA 2 B. Pop. Vicenza 50.00 10. FARMANUOVA Capital stock Euro 3,391,000 in shares of par value Euro 10 PALERMO 2 B. Nuova 30.00 11. CATTOLICA-BPVI MEDIAZIONE CREDITIZIA SpA Capital stock Euro 300,000 in shares of par value Euro 1 VICENZA 2 B. Pop. Vicenza 50.00

Key: (2) = significant influence

The percentage interest in equity also reflects the voting rights at stockholders’ meetings.

108 109 10.2 Equity investments in companies under joint control and those over which significant influence is exercised: accounting information

Name Total Total Net Equity1 Consolidated Assets revenues income book (loss) value

A. COMPANIES VALUED AT EQUITY A.1 Associated companies (subject to significant influence) 1. SEC SERVIZI SCpA Capital stock Euro 25,000,000 in shares of par value Euro 1 67,586 107,719 – 25,951 12,928 2. 21 INVESTIMENTI PARTNERS SpA4 Capital stock Euro 4,250,000 in shares of par value Euro 1 9,180 2,335 454 9,429 1,522 3. MAGAZZINI GENERALI MERCI E DERRATE SpA2 Capital stock Euro 1,241,317 in shares of par value Euro 5.17 3,590 1,492 3 1,484 371 4. INCIPIT Scarl3 Capital stock Euro 50,000 in shares of par value Euro 1 53 – (2) 48 3 5. INTERPORTO DELLA TOSCANA CENTRALE SpA2 Capital stock Euro 12,075,000 in shares of par value Euro 0.21 51,399 2,828 (333) 13,771 2,199 6. OTTO A PIU’ INVESTIMENTI SGR SpA4 Capital stock Euro 1,500,000 in shares of par value Euro 100 1,488 73 (271) 1,145 229 7. VICENZA LIFE LTD Capital stock Euro 634,850 in shares of par value Euro 1 868,513 198,994 5,168 19,937 13,456 8. BERICA VITA SpA Capital stock Euro 31,000,000 in shares of par value Euro 10 703,578 199,903 592 34,776 15,986 9. ABC ASSICURA SpA Capital stock Euro 8,925,000 in shares of par value Euro 0.51 19,069 1,122 (804) 9,276 4,603 10. FARMANUOVA4 Capital stock Euro 3,391,000 in shares of par value Euro 10 1,034 10 (245) 3,146 938 11. CATTOLICA-BPVI MEDIAZIONE CREDITIZIA SpA3 Capital stock Euro 300,000 in shares of par value Euro 1 298 1 (23) 277 150

A. TOTAL COMPANIES VALUED AT EQUITY 52,385

1 the amounts include the net income (loss) for the year; 2 the amounts refer to the latest approved financial statements of the companies concerned at 31 December 2006; 3 this newly-formed company is not yet operational; 4 the amounts have been taken from the company’s preliminary results at 31 December 2007 not yet approved by the Board of Directors.

108 109 The investment in Linea S.p.A. is not being reported in this line item because, following the agreement made on 24 December 2007 to sell the entire 47.96% interest in this company to Compass SpA (Mediobanca Group), and not yet completed at the balance sheet date, this equity investment has been reclassified to “Non-current assets held for sale”, in compliance with IFRS 5.

The balance sheets and income statements used for consolidation purposes (line-by-line, proportional, equity method) are those approved by the Boards of Directors of the individual companies as of 31 December 2007. These statements have been adjusted, where necessary, to align them with proper and consistent accounting policies adopted by the Group. The investments in Interporto della Toscana Centrale S.p.A.5 and Magazzini Generali e Derrate S.p.A. have been reported using the equity method with reference to their 2006 financial statements, while the holdings in 21 Investimenti Partners S.p.A., Farmanuova S.p.A. and Otto a Più Nuovi Investi- menti SGR S.p.A. have been carried at equity with reference to their preliminary results at 31 December 2007, not yet approved by their respective Boards of Directors.

10.3 Equity investments: changes during the year

Banking Insurance Other 31/12/2007 31/12/2006 group companies companies

A. Opening balance 63,274 – – 63,274 42,719

B. Increases 108,726 – – 108,726 48,345 B.1 Purchases 6,029 – – 6,029 48,307 B.2 Writebacks – – – – – B.3 Revaluations – – – – – B.4 Other changes 102,697 – – 102,697 38 C. Decreases 119,615 – – 119,615 27,790 C.1 Sales 72,998 – – 72,998 – C.2 Adjustments – – – – – C.3 Other changes 46,617 – – 46,617 27,790

D. Closing balance 52,385 – – 52,385 63,274

E. Total revaluations 264 – – 264 264

F. Total adjustments – – – – – The “Purchases” reported in line B.1 mostly refer to the acquisition of 50% of the insurance company ABC Assicura S.p.A. under the partnership agreement with the Cattolica Assicurazioni Group.

“Other changes” reported in line B.4 mostly refer to the effect of changing the method of consolidating Berica Vita S.p.A. and Vicenza Life Ltd, from line-by-line to the equity method Line B.4 also includes the effect of equity accounting for SEC Servizi s.c.p.a., Magazzini Generali Merci e Derrate S.p.A., 21 Investimenti Partners S.p.A. and Farmanuova S.p.A.

“Sales” reported in line C.1 include the sale of 50% of the shares held in the insurance companies Berica Vita S.p.A. and Vicenza Life Ltd. and in the fund management company BPVi Fondi

5 Although the interest in the company’s equity exceeds the carrying amount of the investment, the company has report losses in recent years and, for the sake of prudence, its carrying amount has not been adjusted. 110 111 S.p.A., under the partnership agreement with the Cattolica Assicurazioni Group, which has generated a total profit of Euro 38,828 reported in line item 240 “Profit (loss) from equity investments” of the income statement and in line B.4 “Other changes” above.

“Other changes” reported in line C.3 mostly refer to the effect of changing the method of consolidating Nuova Merchant S.p.A. from the equity method to line-by-line, the effect of equity accounting for Otto a Più Nuovi Investimenti SGR S.p.A and ABC Assicura S.p.A., and the reclassification of the investment in Linea S.p.A. to “Non-current assets held for sale”, in compliance with IFRS 5.

SECTION 11

Technical reserves borne by reinsurers – Line item 110

Nothing has been classified in this section.

110 111 SECTION 12

Property, plant and equipment – Line item 120

12.1 Property, plant and equipment: analysis of assets carried at cost

Assets/Amounts Banking Insurance Other 31/12/2007 31/12/2006 group companies companies

A. Assets used in business 1.1 Owned 389,746 – – 389,746 329,068 a) Land 71,304 – – 71,304 61,468 b) Buildings 224,513 – – 224,513 185,147 c) Furniture 54,030 – – 54,030 51,029 d) IT equipment 8,683 – – 8,683 6,179 e) Other 31,216 – – 31,216 25,245 1.2 Purchased under finance leases – – – – 45 a) Land – – – – – b) Buildings – – – – – c) Furniture – – – – – d) IT equipment – – – – – e) Other – – – – 45

Total A 389,746 – – 389,746 329,113

B. Investment property 2.1 Owned – – – – – a) Land – – – – – b) Buildings – – – – – 2.2 purchased under finance leases – – – – – a) Land – – – – – b) Buildings – – – – –

Total B – – – – –

Total A+B 389,746 – – 389,746 329,113 The reported balance includes Euro 3,873 in property, plant and equipment belonging to the 61 branches acquired from the UBI Banca Group on 31 December 2007.

112 113 12.2 Property, plant and equipment: analysis of assets carried at fair value or revalued

Assets/Amounts Banking Insurance Other 31/12/2007 31/12/2006 group companies companies

A. Assets used in business 1.1 Owned – – – – – a) Land – – – – – b) Buildings – – – – – c) Furniture – – – – – d) IT equipment – – – – – e) Other – – – – – 1.2 Purchased under finance leases – – – – – a) Land – – – – – b) Buildings – – – – – c) Furniture – – – – – d) IT equipment – – – – – e) Other – – – – –

Total A – – – – –

B. Investment property 2.1 Owned 47,863 – – 47,863 50,267 a) Land 9,703 – – 9,703 10,087 b) Buildings 38,160 – – 38,160 40,180 2.2 Purchased under finance leases – – – – – a) Land – – – – – b) Buildings – – – – –

Total B 47,863 – – 47,863 50,267

Total A+B 47,863 – – 47,863 50,267

112 113 12.3 Property, plant and equipment used for business purposes: changes during the year

12.3.1 attributable to the banking group

Land Buildings Furniture IT equipment Other Total

A. Opening gross amount 61,468 239,720 92,587 43,766 76,112 513,653 A.1 Total net reductions in value – 54,573 41,601 37,587 50,825 184,586

A.2 Opening net amount 61,468 185,147 50,986 6,179 25,287 329,067

B. Increases: 10,522 47,342 6,213 5,025 10,991 80,093 B.1 Purchases 4,253 9,812 6,165 5,017 10,905 36,152 B.2 Capitalized improvement expenditure – 1,152 – – – 1,152 B.3 Writebacks – – – – – – B.4 Fair value increases booked to: – – – – – – a) equity – – – – – – b) income statement – – – – – – B.5 Positive exchange rate adjustments – – – – – – B.6 Transfers from investment property – – – – – – B.7 Other changes 6,269 36,378 48 8 86 42,789

C. Decreases 686 7,976 3,169 2,521 5,062 19,414 C.1 Sales 678 1,144 16 6 144 1,988 C.2 Depreciation – 6,832 3,152 2,514 4,891 17,389 C.3 Impairment charges booked to: – – – – – – a) equity – – – – – – b) statement of income – – – – – – C.4 Fair value decreases booked to: – – – – – – a) equity – – – – – – b) income statement – – – – – – C.5 Negative exchange rate adjustments – – – – – – C.6 Transfers to: – – – – – – a) investment property – – – – – – b) assets held for sale – – – – – – C.7 Other changes 8 – 1 1 27 37

D. Closing net amount 71,304 224,513 54,030 8,683 31,216 389,746 D.1 Total net reductions in value – 61,405 44,753 40,101 55,716 201,975

D.2 Closing gross amount 71,304 285,918 98,783 48,784 86,932 591,721

“Other changes” reported in line B.7 relate to land and buildings belonging to the subsidiary Monforte 19 S.r.l., consolidated line-by-line for the first time in the year, and to the related consolidation difference allocated to these balances.

114 115 12.3.2 attributable to insurance companies

Land Buildings Furniture IT equipment Other Total

A. Opening gross amount – – 162 – 25 187 A.1 Total net reductions in value – – 119 – 22 141

A.2 Opening net amount – – 43 – 3 46

B. Increases: – – – – 11 11 B.1 Purchases – – – – 11 11 B.2 Capitalized improvement expenditure – – – – – – B.3 Writebacks – – – – – – B.4 Fair value increases booked to: – – – – – – a) equity – – – – – – b) income statement – – – – – – B.5 Positive exchange rate adjustments – – – – – – B.6 Transfers from investment property – – – – – B.7 Other changes – – – – – –

C. Decreases – – 43 – 14 57 C.1 Sales – – – – – – C.2 Depreciation – – 9 – 3 12 C.3 Impairment charges booked to: – – – – – – a) equity – – – – – – b) income statement – – – – – – C.4 Fair value decreases booked to: – – – – – – a) equity – – – – – – b) statement of income – – – – – – C.5 Negative exchange rate adjustments – – – – – – C.6 Transfers to: – – – – – – a) investment property – – – – – – b) assets held for sale – – – – – – C.7 Other changes – – 34 – 11 45

D. Closing net amount – – – – – – D.1 Total net reductions in value – – 128 – 25 153

D.2 Closing gross amount – – 128 – 25 153

114 115 12.4 Investment property: changes during the year

Banking group Insurance companies Other companie 31/12/2007 Land Buildings Land Buildings Land Buildings Land Buildings

A. Opening balance 10,087 40,180 – – – – 10,087 40,180

B. Increases 72 319 – – – – 72 319 B.1 Purchases – – – – – – – – B.2 Capitalized improvement expenditure – 56 – – – – – 56 B.3 Fair value increases 72 263 – – – – 72 263 B.4 Writebacks – – – – – – – – B.5 Positive exchange rate adjustments – – – – – – – – B.6 Transfers from property, plant and equipment used for business purposes – – – – – – – – B.7 Other changes – – – – – – – C. Decreases 456 2,339 – – – – 456 2,339 C.1 Sales – 360 – – – – – 360 C.2 Depreciation – – – – – – – – C.3 Fair value decreases 6 157 – – – – 6 157 C.4 Impairment charges – – – – – – – – C.5 Negative exchange rate adjustments – – – – – – – – C.6 Transfers to: – – – – – – – – a) property, plant and equipment used for business purposes – – – – – – – – b) attività non correnti in via di dismissione – – – – – – – – C.7 Other changes 450 1,822 – – – – 450 1,822

D. Closing balance 9,703 38,160 – – – – 9,703 38,160

116 117 SECTION 13

Intangible assets – Line item 130

13.1 Intangible assets: analysis by type

Assets/Amounts Banking group Insurance companies Other companies 31/12/2007 31/12/2006 Finite Indefinite Finite Indefinite Finite Indefinite Finite Indefinite Finite Indefinite life life life life life life life life life life A.1 Goodwill – 976,996 – – – – – 976,996 – 522,770 A.1.1 attributable to the group x 976,996 x – – – – 976,996 – 522,770 A.1.2 attributable to minority interests x – x – – – – – – – A.2 Other intangible assets 7,940 – – – – – 7,940 – 6,126 – A.2.1 Carried at cost: 7,940 – – – – – 7,940 – 6,126 – a) Intangible assets generated internally – – – – – – – – – – b) Other assets 7,940 – – – – – 7,940 – 6,126 – A.2.2 Carried at fair value: – – – – – – – – – – a) Intangible assets generated internally – – – – – – – – – – b) Other assets – – – – – – – – – –

Total 7,940 976,996 – – – – 7,940 976,996 6,126 522,770

Line A.1 “Goodwill” includes: • Euro 469,215 in goodwill paid by the Parent Bank to acquire 61 branches from the UBI Group on 31 December 2007; • Euro 208,580 arising on consolidation of the subsidiary Cariprato SpA; • Euro 120,198 representing the residual goodwill paid to the former Group banks that sold their businesses to the Parent Bank in 2000; • Euro 55,646 arising on consolidation of the subsidiary Banca Nuova SpA; • Euro 52,889 representing the residual goodwill paid for the purchase of 46 branches from banks in the Intesa Group during 2001; • Euro 36,000 representing the residual goodwill paid to Banca AntonVeneta for the purchase of 30 branches in eastern Sicily at the end of 2004; • Euro 16,707 arising on consolidation of the subsidiary Verona Gestioni SGR SpA; • Euro 6,212 arising on consolidation of the subsidiary Farbanca SpA; • Euro 4,121 in goodwill paid by the subsidiary Cariprato SpA to acquire a business from Ban- ca Steinhauslin &C.; • Euro 2,725 representing the goodwill arising on application of the equity method to the investment in 21 Investimenti; • Euro 2,651 representing the goodwill arising on application of the equity method to the investment in Vicenza Life Ltd; • Euro 1,240 representing the goodwill arising on application of the equity method to the investment in Nuova Merchant SpA; • Euro 521 representing the goodwill arising on application of the equity method to the investment in ABC Assicura SpA;

116 117 • Euro 175 arising on consolidation of the subsidiary Nordest Merchant SpA; • Euro 116 arising on consolidation of the subsidiary Prestinuova SpA.

The carrying value of this goodwill (except for that relating to the UBI Banca branches) has been tested for impairment in accordance with IAS 36, since it represents an intangible asset with an indefinite useful life.

The related valuations were made as follows: • using the adjusted equity method, considering earnings, for the goodwill relating to Cariprato SpA and Banca Nuova SpA, and for the goodwill relating to the business represented by the 30 branches acquired from Banca AntonVeneta in 2004; • using the earnings method for the goodwill arising on application of the equity method and on consolidation relating to Vicenza Life Ltd and Nuova Merchant SpA respectively; • using the valuation prepared by Citigroup for the goodwill arising on consolidation of the subsidiary Verona Gestioni Sgr SpA, in view of its recent acquisition; • using the comparable transactions method for the goodwill attributable to the other businesses.

The goodwill relating to the UBI Group branches has been determined on the basis of the amount of direct and indirect deposits held by the acquired branches at 31 December 2007. In compliance with para. 62 of IFRS 3, this goodwill has been determined only provisionally, because the fair value to allocate to the assets and liabilities acquired was not available at the balance sheet date. The value recognized for this goodwill will be tested in accordance with IAS 36 at the next balance sheet date. There was no evidence of any impairment losses at 31 December 2007.

All the analyses were carried out on a stand-alone basis, valuing each bank/company with reference to its current condition, regardless of the effect of any operational and financial synergies deriving from a business combination.

The assessment of the above goodwill as of 31 December 2007 did not identify any impairment to be recognized in the income statement, except for the reduction in the equity value of Nuova Merchant SpA which was written down by Euro 660.

A.2.1 “Other intangible assets” mainly comprises capitalized software and user licenses.

118 119 13.2 Intangible assets: changes during the year

13.2.1 attributable to the banking group

Goodwill Other intangible assets: Other intangible assets: Total generated internally other Finite Indefinite Finite Indefinite

A. Opening balance 745,880 – – 16,168 – 762,060 A.1 Total net reductions in value 223,110 – – 10,055 – 233,165

A.2 Opening net amount 522,770 – – 6,125 – 528,895

B. Increases 494,363 – – 5,565 – 499,928 B.1 Purchases 494,360 – – 5,491 – 499,851 B.2 Increases in internally generated intangible assets x – – – – – B.3 Writebacks x – – – – – B.4 Positive changes in fair value – – – – – – – booked to equity x – – – – – – booked to income statement x – – – – – B.5 Positive exchange rate adjustments – – – – – – B.6 Other changes 3 – – 74 – 77

C. Decreases 40,137 – – 3,750 – 43,887 C.1 Sales 2,705 – – – – 2,705 C.2 Adjustments 660 – – 3,750 – 4,410 – Amortization x – – 3,750 – 3,750 – Writedowns 660 – – – – 660 + equity x – – – – – + income statement 660 – – – – 660 C.3 Negative changes in fair value – – – – – – – booked to equity x – – – – – – booked to income statement x – – – – – C.4 Transfers to non–current assets held for sale – – – – – C.5 Negative exchange rate adjustments – – – – – – C.6 Other changes 36,772 – – – – 36,772

D. Closing net amount 976,996 – – 7,940 – 984,936 D.1 Total net value adjustments 223,770 – – 13,805 – 237,575

E. Closing gross amount 1,200,766 – – 21,745 – 1,222,511

Key: Finite: finite life Indefinite: Indefinite life

The opening balance of “Other intangible assets” does not include those assets which had been fully amortized at the end of the prior year. “Other changes” in goodwill reported in line C.6 refer to the decrease for the difference arising

118 119 on the application of the equity method to the investment in Linea SpA, after reclassifying it to “Non-current assets held for sale”, in compliance with IFRS 5.

Intangible assets, except goodwill, are amortized systematically each year on a straight-line basis over their estimated useful lives.

120 121 13.2.2 attributable to insurance companies

Goodwill Other intangible assets: Other intangible assets: Total generated internally other Finite Indefinite Finite Indefinite

A. Opening balance – – – 7 – 7 A.1 Total net reductions in value – – – 6 – 6

A.2 Opening net amount – – – 1 – 1

B. Increases – – – 3 – 3 B.1 Purchases – – – 3 – 3 B.2 Increases in internally generated intangible assets x – – – – B.3 Writebacks x – – – – – B.4 Positive changes in fair value – – – – – – – booked to equity x – – – – – – booked to income statement x – – – – – B.5 Positive exchange rate adjustments – – – – – – B.6 Other changes – – – – – –

C. Decreases – – – 4 – 4 C.1 Sales – – – – – – C.2 Adjustments – – – 2 – 2 – Amortization x – – 2 – 2 – Writedowns – – – – – – + equity x – – – – – + statement of income – – – – – – C.3 Negative changes in fair value – – – – – – – booked to equity x – – – – – – booked to income statement x – – – – – C.4 Transfers to non–current assets held for sale – – – – – – C.5 Negative exchange rate adjustments – – – – – – C.6 Other changes – – – 2 – 2

D. Closing net amount – – – – – – D.1 Total net value adjustments – – – 8 – 8

E. Closing gross amount – – – 8 – 8

Key: Finite: finite life Indefinite: Indefinite life

120 121 SECTION 14

Tax assets and liabilities – Asset line item 140 and liability line item 80

14.1 Deferred tax assets: analysis

Deferred tax assets Banking Insurance Other 31/12/2007 31/12/2006 group companies companies

– Deferred tax assets booked to income statement 95,033 – – 95,033 116,326 – Deferred tax assets booked to equity 8,074 – – 8,074 927

Total 103,107 – – 103,107 117,253

14.2 Deferred tax liabilities: analysis

Deferred tax liabilities Banking Insurance Other 31/12/2007 31/12/2006 group companies companies

– Deferred tax liabilities booked to income statement 30,482 – – 30,482 75,353 – Deferred tax liabilities booked to equity” 4,606 – – 4,606 6,230

Total 35,088 – – 35,088 81,583

122 123 14.3 Change in deferred tax assets (with matching entry in income statement)

Banking Insurance Other 31/12/2007 31/12/2006 group companies companies

1. Opening balance 115,694 632 – 116,326 97,495

2. Increases 40,662 4 – 40,666 66,038 2.1 Deferred tax assets recorded during the year 40,288 – – 40,288 44,700 a) relating to prior years 162 – – 162 – b) due to changes in accounting policies – – – – – c) writebacks – – – – 209 d) other 40,126 – – 40,126 44,491 2.2 New taxes or increases in tax rates 77 – – 77 – 2.3 Other increases 297 4 – 301 21,338

3. Decreases 61,323 636 – 61,959 47,207 3.1 Deferred tax assets reversing during the year 34,564 636 – 35,200 25,826 a) reversals 32,535 636 – 33,171 25,826 b) written down as no longer 2,029 – – 2,029 – recoverable c) change in accounting policies – – – – – 3.2 Reduction in tax rates 10,267 – – 10,267 – 3.3 Other decreases 16,492 – – 16,492 21,381

4. Closing balance 95,033 – – 95,033 116,326 The amounts “written down as no longer recoverable” reported in line 3.1.b) refer to the cancellation of deferred tax assets for IRAP (Italian regional business tax), recognized in previous years and now written off following changes in the law introduced by the 2008 Finance Act, effective 1 January 2008.

Line 3.2 refers to the release of deferred tax assets, recognized in previous years, after the 2008 Finance Act reduced the IRES and IRAP rates, effective 1 January 2008. Line 3.3 relates to the reclassification of certain deferred tax assets to current taxes after prepar- ing the 2006 income tax return.

122 123 14.4 Change in deferred tax liabilities (with matching entry in income statement)

Banking Insurance Other 31/12/2007 31/12/2006 group companies companies

1. Opening balance 75,099 254 – 75,353 42,755

2. Increases 28,477 – – 28,477 47,671 2.1 Deferred tax liabilities recorded during the year 24,272 – – 24,272 36,948 a) relating to prior years – – – – – b) due to changes in accounting policies – – – – – c) other 24,272 – – 24,272 36,948 2.2 New taxes or increases in tax rates 156 – – 156 – 2.3 Other increases 4,049 – – 4,049 10,723

3. Decreases 73,094 254 – 73,348 15,073 3.1 Deferred tax liabilities eliminated during the year 31,827 – – 31,827 3,514 a) reversals 30,787 – – 30,787 3,514 b) due to changes in accounting policies – – – – – c) other 1,040 – – 1,040 – 3.2 Reduction in tax rates 7,983 – – 7,983 – 3.3 Other decreases 33,284 254 – 33,538 11,559

4. Closing balance 30,482 – – 30,482 75,353 Line 3.1.a) includes the removal of liabilities recognized in the past after the Parent Bank Banca Popolare di Vicenza decided to frank “Form EC” by paying a flat tax.

Line 3.2 refers to the release of deferred tax liabilities, recognized in previous years, after the 2008 Finance Act reduced the IRES and IRAP rates, effective 1 January 2008.

Line 3.3 relates to the reclassification of certain deferred tax liabilities to current taxes after pre- paring the 2006 income tax return.

124 125 14.5 Change in deferred tax assets (with matching entry to equity)

Banking Insurance Other 31/12/2007 31/12/2006 group companies companies

1. Opening balance 256 671 – 927 725

2. Increases 8,071 3,150 – 11,221 927 2.1 Deferred tax assets recorded during the year 8,071 3,150 – 11,221 259 a) relating to prior years – – – – 3 b) due to changes in accounting policies – – – – – c) other 8,071 3,150 – 11,221 256 2.2 New taxes or increases in tax rates – – – – – 2.3 Other increases – – – – 668

3. Decreases 253 3,821 – 4,074 725 3.1 Deferred tax assets reversing during the year 2 671 – 673 7 a) reversals 2 671 – 673 7 b) written down as no longer recoverable – – – – – c) due to changes in accounting policies – – – – – 3.2 Reduction in tax rates 1 – – 1 – 3.3 Other decreases 250 3,150 – 3,400 718

4. Closing balance 8,074 – – 8,074 927

124 125 14.6 Change in deferred tax liabilities (with matching entry to equity)

Banking Insurance Other 31/12/2007 31/12/2006 group companies companies

1. Opening balance 6,050 180 – 6,230 9,481

2. Increases 2,803 1,835 – 4,638 2,542 2.1 Deferred tax liabilities recorded during the year 2,239 1,835 – 4,074 2,445 a) relating to prior years – – – – 53 b) due to changes in accounting policies – – – – – c) other 2,239 1,835 – 4,074 2,392 2.2 New taxes or increases in tax rates – – – – – 2.3 Other increases 564 – – 564 97

3. Decreases 4,247 2,015 – 6,262 5,793 3.1 Deferred tax assets reversing during the year 2,968 180 – 3,148 5,543 a) reversals 2,968 180 – 3,148 5,543 b) due to changes in accounting policies – – – – – c) other – – – – – 3.2 Reduction in tax rates 1,236 – – 1,236 – 3.3 Other decreases 43 1,835 – 1,878 250

4. Closing balance 4,606 – – 4,606 6,230 Line 3.2 refers to the release of deferred tax liabilities, recognized in previous years, after the 2008 Finance Act reduced the IRES and IRAP rates, effective 1 January 2008.

126 127 SECTION 15 Non-current assets held for sale and associated liabilities – Asset line item 150 and liability line item 90

15.1 Non-current assets held for sale and associated liabilities: analysis by type

Banking Insurance Other 31/12/2007 31/12/2006 group companies companies

A. Individual assets A.1 Equity investments 64,548 – – 64,548 – A.2 Property, plant and equipment – – – – – A.3 Intangible assets 36,772 – – 36,772 – A.4 Other non-current assets – – – – –

Total A 101,320 – – 101,320 –

B. Groups of assets (discontinued operations) B.1 Financial assets held for trading – – – – – B.2 Financial assets at fair value – – – – – B.3 Financial assets available for sale – – – – – B.4 Financial assets held to maturity – – – – – B.5 Loans and advances to banks – – – – – B.6 Loans and advances to customers – – – – – B.7 Equity investments – – – – – B.8 Property, plant and equipment – – – – – B.9 Intangible assets – – – – – B.10 Other assets – – – – –

Total B – – – – –

C. Liabilities associated with assets held for sale C.1 Payables – – – – – C.2 Securities – – – – – C.3 Other liabilities – – – – –

Total C – – – – –

D. Liabilities associated with assets held for sale D.1 Deposits from banks – – – – – D.2 Due to customers – – – – – D.3 Debt securities in issue – – – – – D.4 Financial liabilities held for trading – – – – – D.5 Financial liabilities at fair value – – – – – D.6 Provisions – – – – – D.7 Other liabilities – – – – –

Total D – – – – –

126 127 Line A.1 refers to the entire interest (47.96% of capital stock) held in Linea SpA while line A.3 reports the related goodwill arising on application of the equity method, both of which reclassified to non-current assets held for sale, in compliance with IFRS 5, after signing a contract in December for this company’s sale. In accordance with para. 15 of IFRS 5, this equity investment has been stated at the lower of its carrying amount and fair value less costs to sell.

15.3 Information on equity investments in companies over which significant influence is exercised but not carried at equity

As required by para. 13 (a) of IAS 28, the equity investment in Linea SpA is not being accounted for using the equity method; the key financial information relating to this company required by para. 37 (I) of IAS 28 is disclosed below.

1 Name Total Total Net income Equity assets revenues (loss)

GRUPPO LINEA SpA2 4,471,899 519,529 13,496 134,590

1 equity includes net income (loss) for the year; 2 the figures refer to the financial statements at 31 December 2007.

128 129 SECTION 16

Other assets – Line item 160

16.1 Other assets: analysis

31/12/2007 31/12/2006

1. Miscellaneous debits in transit 58,474 43,773 2. Miscellaneous security transactions 3,591 3,600 3. Amounts recorded on the last day of the year 89,644 80,595 4. Checks drawn on third parties sent for collection 26,493 21,459 5. Adjustments to non-liquid portion of notes discounted with recourse 23,547 24,752 6. Accrued income and prepaid expenses not allocated to specific accounts 22,027 11,346 7. Leasehold improvements 22,501 15,297 8. Items awaiting allocation 1,622 2,918 9. Other miscellaneous items 49,340 45,049 10. Differences on elimination – 3,713

Total 297,239 252,502 The reported balance includes Euro 2,640 in “other assets” belonging to the 61 branches acquired from the UBI Banca Group on 31 December 2007.

“Leasehold improvements” consist of improvement expenditure that cannot be separated from the assets themselves, meaning that it cannot be separately recognized in property, plant and equipment. These costs are amortized over the period they are expected to benefit or the residual duration of the lease, whichever is shorter.

128 129 LIABILITIES AND EQUITY

SECTION 1

Deposits from banks – Line item 10

1.1 Deposits from banks: breakdown by type

Type of transaction/Members of the group Banking Insurance Other 31/12/2007 31/12/2006 group companies companies

1. Due to central banks 85,086 – – 85,086 – 2. Due to other banks 3,193,608 – – 3,193,608 1,600,251 2.1 Current accounts and sight deposits 493,468 – – 493,468 350,711 2.2 Time deposits 2,200,292 – – 2,200,292 872,178 2.3 Loans 422,711 – – 422,711 377,362 2.3.1 Finance leases – – – – – 2.3.2 Other 422,711 – – 422,711 377,362 2.4 Payables for commitments to repurchase own equity instruments – – – – – 2.5 “Liabilities relating to assets sold but not derecognized” 77,137 – – 77,137 – 2.5.1 Repurchase agreements 77,137 – – 77,137 – 2.5.2 Other – – – – – 2.6 Other payables – – – – –

Total 3,278,694 – – 3,278,694 1,600,251

Fair value 3,278,694 – – 3,278,694 1,600,251 “Loans: other” in line 2.3.2 include funding repurchase agreements arranged to match equivalent lending repurchase agreements classified as loans to banks or to customers. Funding repurchase agreements arranged using investment securities are classified in line 2.5.1.

In view of the predominantly short-term nature of deposits from banks, their fair value is conventionally taken to be their carrying amount.

130 131 SECTION 2

Due to customers – Line item 20

2.1 Due to customers: breakdown by type

Type of transaction/Members of the group Banking Insurance Other 31/12/2007 31/12/2006 group companies companies

1. Current accounts and sight deposits 8,624,574 – – 8,624,574 7,616,076 2. Time deposits 25,720 – – 25,720 14,985 3. Public funds administered 510 – – 510 721 4. Loans 1,070,312 – – 1,070,312 674,486 4.1 Finance leases – – – – – 4.2 Other 1,070,312 – – 1,070,312 674,486 5. Payables for commitments to repurchase own equity instruments – – – – – 6. “Liabilities relating to assets sold but not derecognized” 1,631,160 – – 1,631,160 2,038,358 6.1 Repurchase agreements – – – – 204,082 6.2 Other 1,631,160 – – 1,631,160 1,834,276 7. Other payables 127,083 – – 127,083 59,602

Total 11,479,359 – – 11,479,359 10,404,228

Fair value 11,479,359 – – 11,479,359 10,404,228 The reported balance includes Euro 468,366 in amounts “due to customers” relating to the 61 branches acquired from the UBI Banca Group on 31 December 2007.

Liabilities relating to assets sold but not derecognized, included in line 6.2, represent the matching entry for the mortgages sold as part of the securitizations known as “Berica 5 Residential MBS” and “Berica 6 Residential MBS” which, since they do not satisfy the IAS 39 requirements for derecognition, have been “written back” to the financial statements as “assets sold but not derecognized” reported under line item 70 “loans and advances to customers”.

“Loans: other” in line 4.2 include funding repurchase agreements arranged to match equivalent lending repurchase agreements classified as loans to banks or to customers. Funding repurchase agreements arranged using investment securities are classified in line 6.1.

130 131 SECTION 3

Debt securities in issue – Line item 30

Debt securities in issue: breakdown by type

Type of transaction/ Banking group Insurance companies Other companies 31/12/2007 31/12/2006 Members of the group Book Fair Book Fair Book Fair Book Fair Book Fair value value value value value value value value value value

A. Listed securities – – – – – – – – – – 1. Bonds – – – – – – – – – – 1.1 structured – – – – – – – – – – 1.2 other – – – – – – – – – – 2. Other securities – – – – – – – – – – 2.1 structured – – – – – – – – – – 2.2 other – – – – – – – – – – B. Unlisted securities 5,583,746 5,323,597 – – – – 5,583,746 5,323,597 4,932,549 4,899,579 1. Bonds 5,281,354 5,021,205 – – – – 5,281,354 5,021,205 4,560,021 4,527,050 1.1 structured – – – – – – – – 303,954 299,468 1.2 other 5,281,354 5,021,205 – – – – 5,281,354 5,021,205 4,256,067 4,227,582 2. Other securities 302,392 302,392 – – – – 302,392 302,392 372,528 372,529 2.1 structured – – – – – – – – – – 2.2 other 302,392 302,392 – – – – 302,392 302,392 372,528 372,529

Total 5,583,746 5,323,597 – – – – 5,583,746 5,323,597 4,932,549 4,899,579

The reported balance includes Euro 1,287 in “Debt securities in issue“ relating to the 61 branches acquired from the UBI Banca Group on 31 December 2007.

The increase in “bonds” mainly relates to new issues as part of the EMTN (European Medium Term Notes) Program launched in December 2003 and renewed in 2007, for a total of Euro 4.5 billion.

As for the “BPVi 3.a emissione 2003-2009” bond convertible into Banca Popolare di Vicenza ordinary shares, a total of Euro 291.2 million in bonds were converted on 1 January 2007 into 5,709,106 new shares.

“BPVi 13.a emissione 2007-2015”, a new subordinated bond convertible into Banca Popolare di Vicenza shares, was issued during the year for an amount of Euro 250.3 million.

132 133 3.2 Detail of line item 30 “Debt securities in issue”: subordinated securities

31/12/2007 31/12/2006

Debt securities in issue 788,096 650,708

The subordinated bonds classified in this line item are analyzed below:

Isin code Issue date Maturity Rate Interest rate Nominal value Book value

T0003782684 15/12/2004 15/12/2011 Fixed 4.18% 20,000 20,037 IT0003444574 2/5/2003 2/5/2009 Fixed 4.25% 8,285 8,521 IT0003631659 23/3/2004 23/3/2011 Fixed 4.05% 9,995 10,102 IT0003631642 2/4/2004 2/4/2009 Fixed 3.64% 24,875 25,094 IT0003662498 21/5/2004 21/5/2010 Fixed 3.95% 24,956 25,062 IT0003699649 16/8/2004 16/8/2010 Fixed 4.10% 14,988 15,212 IT0003748511 30/11/2004 30/11/2011 Fixed 3.49% 49,874 49,956 XS0210870415 3/2/2005 3/2/2015 Floating Euribor 3m + 0.45 200,000 201,223 IT00041893431 30/7/2007 30/7/2015 Fixed 2.15% 250,259 232,950 XS0336683254 20/12/2007 20/12/2017 Floating Euribor 3m + 2.35 200,000 199,939

Total 803,232 788,096

1 Bond with right of conversion into Banca Popolare di Vicenza ordinary shares: the bonds can be converted into capital stock in a ratio of 2 shares of par value Euro 3.75 each for every bond of nominal value Euro 124 each. The conversion ratio will be changed in the event of a bonus increase in capital via the issue of shares. The right to convert can be exercised from 1 October 2010 to 31 December 2010. The shares delivered to the bondholders who decide to convert will have dividend and voting rights from 1 January 2011. Bondholders are entitled to convert early in the event of extraordinary operations involving capital, except for mergers with other companies in the Banca Popolare di Vicenza Group or with companies controlled by the issuer.

All the above subordinated bonds have an early redemption clause that allows the Issuer to redeem them early, not less than 18 months after the final date of placement, following prior authorization from the Bank of Italy and giving at least one month’s notice.

Furthermore, all the above bonds contain a subordination clause whereby, if the Issuer is wound up, they would be redeemed only after all other creditors, not subordinated to the same extent, have been satisfied.

All the above bonds are included in the calculation of the Bank’s regulatory capital, on the basis established in Circular 155 dated 18 December 1991–XIIth update “Instructions for reporting regulatory capital and prudent parameters”.

132 133 SECTION 4

Financial liabilities held for trading – Line item 40

4.1 Financial liabilities held for trading: breakdown by type

Type of transaction/Members of the group Banking group Insurance companies Other companies NV FV FV* NV FV FV* NV FV FV* Q NQ Q NQ Q NQ

A. Cash liabilities 1. Due to other banks – – – – – – – – – – – – 2. Due to customers – – – – – – – – – – – – 3. Debt securities in issue – – – – – – – – – – – – 3.1 Bonds – – – x – – – x – – – x 3.1.1 Structured – – – x – – – x – – – x 3.1.2 Other bonds – – – x – – – x – – – x 3.2 Other securities – – – x – – – x – – – x 3.2.1. Structured – – – x – – – x – – – x 3.2.2 Other – – – x – – – x – – – x

Total A – – – – – – – – – – – –

B. Derivatives 1. Financial derivatives x – 662,154 x x – – x x – – x 1.1 For trading x – 568,751 x x – – x x – – x “1.2 Connected with the fair value option” x – 93,403 x x – – x x – – x 1.3 Other x – – x x – – x x – – x 2. Credit derivatives x – – x x – – x x – – x 2.1 For trading x – – x x – – x x – – x “2.2 Connected with the fair value option” x – – x x – – x x – – x 2.3 Other x – – x x – – x x – – x

Total B – – 662,154 – – – – – – – – –

Total (A+B) – – 662,154 – – – – – – – – –

134 135 Type of transaction/Members of the group 31/12/2007 31/12/2006 NV FV FV* NV FV FV* Q NQ Q NQ

A. Cash liabilities 1. Due to other banks – – – – – – – – 2. Due to customers – – – – – – – – 3. Debt securities in issue – – – – – – – – 3.1 Bonds – – – x – – – x 3.1.1 Structured – – – x – – – x 3.1.2 Other bonds – – – x – – – x 3.2 Other securities – – – x – – – x 3.2.1. Structured – – – x – – – x 3.2.2 Other – – – x – – – x

Total A – – – – – – – –

B. Derivatives 1. Financial derivatives x – 662,154 x x – 701,324 x 1.1 For trading x – 568,751 x x – 618,852 x “1.2 Connected with the fair value option” x – 93,403 x x – 82,472 x 1.3 Other x – – x x – – x 2. Credit derivatives x – – x x – – x 2.1 For trading x – – x x – – x “2.2 Connected with the fair value option” x – – x x – – x 2.3 Other x – – x x – – x

Total B – – 662,154 – – – 701,324 –

Total (A+B) – – 662,154 – – – 701,324 –

FV = Fair value FV* = Fair value calculated excluding the differences in value due to changes in the issuer’s credit rating since the issue date NV = Nominal or notional value Q = Listed NQ = Unlisted

136 137 4.4 Financial liabilities held for trading: derivatives

4.4.1 attributable to the banking group

Type of derivatives/Underlying assets Interest Currency Equities Loans Other 31/12/2007 31/12/2006 rates and gold

A) Listed derivatives 1. Financial derivatives – – – – – – – a) With exchange of capital – – – – – – – – Options issued – – – – – – – – Other derivatives – – – – – – – b) Without exchange of capital – – – – – – – – Options issued – – – – – – – – Other derivatives – – – – – – – 2. Credit derivatives – – – – – – – a) With exchange of capital – – – – – – – b) Without exchange of capital – – – – – – –

Total A – – – – – – –

B. Unlisted derivatives 1. Financial derivatives 583,581 32,581 43,318 – 2,674 662,154 701,324 a) With exchange of capital 199 32,581 2,402 – – 35,182 40,839 – Options issued 199 6,113 2,402 – – 8,714 22,188 – Other derivatives – 26,468 – – – 26,468 18,651 b) Without exchange of capital 583,382 – 40,916 – 2,674 626,972 660,485 – Options issued 204,314 – 40,916 – – 245,230 310,727 – Other derivatives 379,068 – – – 2,674 381,742 349,758 2. Credit derivatives – – – – – – – a) With exchange of capital – – – – – – – b) Without exchange of capital – – – – – – –

Total B 583,581 32,581 43,318 – 2,674 662,154 701,324

Total (A+B) 583,581 32,581 43,318 – 2,674 662,154 701,324

136 137 SECTION 5

Financial liabilities at fair value – Line item 50

5.1 Financial liabilities at fair value: breakdown by type

Type of security/Amounts Banking group Insurance companies Other companies NV FV FV* NV FV FV* NV FV FV* Q NQ Q NQ Q NQ

1. Due to other banks – – – – – – – – – – – – 1.1 Structured – – – x – – – x – – – – 1.2 Other – – – x – – – x – – – – 2. Due to customers – – – – – – – – – – – – 2.1 Structured – – – x – – – x – – – – 2.2 Other – – – x – – – x – – – – 3. Debt securities 2,594,185 – 2,545,976 – – – – – – – – – 3.1 Structured 933,679 – 893,102 x – – – x – – – – 3.2 Other 1,660,506 – 1,652,874 x – – – x – – – –

Total 2,594,185 – 2,545,976 – – – – – – – – –

“Debt securities” include own bonds correlated with derivative contracts that hedge interest rate Type of security/Amounts 31/12/2007 31/12/2006 risk, valued by applying the fair value option, as allowed by IAS 39. NV FV FV* NV FV FV* Q NQ Q NQ The increase in this amount mainly reflects new bond issues during the year as part of the EMTN (European Medium Term Notes) Program launched in December 2003 and renewed at 1. Due to other banks – – – – – – – – the start of 2007 for a total of Euro 4.5 billion. 1.1 Structured – – – – – – – – 1.2 Other – – – – – – – – 2. Due to customers – – – – 900,162 – 900,162 – 5.2 Detail of line item 50 “Financial liabilities at fair value”: subordinated liabilities 2.1 Structured – – – – 900,162 – 900,162 – 2.2 Other – – – – – – – – 31/12/2007 31/12/2006 3. Debt securities 2,594,185 – 2,545,976 – 1,595,506 – 1,500,182 – 3.1 Structured 933,679 – 893,102 – 810,586 – 779,026 – Subordinated liabilities 38,886 39,329 3.2 Other 1,660,506 – 1,652,874 – 784,920 – 721,156 –

Total 2,594,185 – 2,545,976 – 2,495,668 – 2,400,344 – The subordinated bonds classified in this caption are analyzed below:

FV = Fair value Isin code Issue date Maturity Rate Interest rate Nominal value Book value FV* = Fair value calculated excluding the differences in value due to changes in the issuer’s credit rating since the issue date IT0004015746 21/02/2006 21/02/2012 Fixed 3.78% 39,970 38,886 NV = Nominal or notional value Q = Listed Total 39,970 38,886 NQ = Unlisted

138 139 5.3 Financial liabilities at fair value: changes during the year

Due to Due to Debt securities Total other banks to customers in issue

A. Opening balance – 900,162 1,500,182 2,400,344

B. Increases – 187,143 1,260,413 1,447,556 B. Increases – 187,143 1,260,413 1,447,556 B.1 Issues – – 1,204,412 1,204,412 B.2 Sales – 186,464 15,253 201,717 B.3 Positive changes in fair value – 679 9,353 10,032 B.4 Other changes – – 31,395 31,395

C. Decreases – 1,087,305 214,619 1,301,924 C.2 Redemptions – 203,416 149,663 353,079 C.3 Negative changes in fair value – – 32,733 32,733 C.4 Other changes – 883,889 16,966 900,855

D. Closing balance – – 2,545,976 2,545,976 The “Positive and negative changes in fair value” (lines B.3 and C.3) are reported in line item 110 “Net change in financial assets and liabilities at fair value” of the income statement.

“Other changes” in “Due to customers” reported in line C.4 include the removal of securities held by the insurance companies Berica Vita and Vicenza Life which are no longer being consolidated line-by-line.

SECTION 6

Hedging derivatives – Line item 60

Nothing has been classified in this section because the Group does not hold any derivatives falling into in this category.

SECTION 7

Remeasurement of financial liabilities backed by general hedges – Line item 70

Nothing has been classified in this section because the Group has not taken out any general hedges.

140 141 SECTION 8

Tax liabilities – Line item 80

Deferred tax liabilities are discussed in asset section 14.

SECTION 9

Liabilities associated with non-current assets held for sale – Line item 90

Nothing has been classified in this section.

SECTION 10

Other liabilities – Line item 100

10.1 Other liabilities: analysis

31/12/2007 31/12/2006

1. Miscellaneous security transactions 20,156 15,443 2. Employee salaries and contributions 60,579 43,898 3. Suppliers 57,708 40,013 4. Transactions in transit 85,849 19,138 5. Adjustments for non-liquid balances relating to the portfolio 169,058 131,344 6. Liability for risks on guarantees and commitments 4,606 4,179 7. Accrued expenses and deferred income not allocated to specific accounts 7,514 2,532 8. Other miscellaneous items 148,274 250,338 9. Differences on elimination 6,185 –

Total 559,929 506,885 The reported balance includes Euro 53,906 in “other liabilities” relating to the 61 branches acquired from the UBI Banca Group on 31 December 2007.

Transactions in transit refer to positions taken in the last few days of the year, almost all of which settled in the first few days of the new year.

140 141 SECTION 11

Provision for severance indemnities – Line item 110

11.1 Severance indemnities: changes during the year

Banking Insurance Other 31/12/2007 31/12/2006 group companies companies A. Opening balance 88,655 17 – 88,672 87,165

B. Increases 84 10 – 94 14,258 B.1 Provisions (3,521) 10 – (3,511) 13,881 B.2 Other increases 3,605 – – 3,605 377

C. Decreases 6,410 27 – 6,437 12,751 C.1 Payments made 5,628 3 – 5,631 7,368 C.2 Other decreases 782 24 – 806 5,383

D. Closing balance 82,329 – – 82,329 88,672 According to IFRIC, the provision for severance indemnities is a “post-employment benefit” qualifying as a “defined-benefit plan”, the value of which according to IAS 19 must be determined on an actuarial basis. As a consequence, the year-end valuation of this amount was carried out by an independent actuary using the projected unit credit method with reference to earned benefits. This method involves the projection of future payments with reference to historical and statistical analyses and probabilities, adopting suitable demographic techniques. This makes it possible to calculate the severance indemnities accruing at a specific date on an actuarial basis, distributing the cost over the entire remaining service of the current workforce, and no longer presenting them as a cost payable as if the business were to cease trading on the balance sheet date.

The 2007 Finance Act (Law 296 of 27 December 2006) brought forward to 1 January 2007 the effective date of new pension fund legislation (Decree 252/2005) and expanded the severance indemnity rules contained therein. As a result of the new legislation, future provisions for severance indemnities will be paid into external pension funds, unless an employee objects and requests that his severance indemnity continue to be accrued within the company. Furthermore, in the case of employees opting to keep their severance indemnity within the company, if the company has more than fifty employees, then it must pay severance indemnity earned from 1 January 2007 into the newly-created fund managed by INPS (Italy’s social security agency). Un- der IAS 19, severance indemnity paid into the INPS fund, like that paid into an external pension fund, is treated like a defined-contribution plan. This transformation of severance indemnity from a defined-benefit into a defined-contribution plan in the case of companies with more than 50 employees represents a curtailment, the effects of which have been recognized in the income statement.

Line B.1 “Provisions” includes not only the provision for the year but also the extraordinary impact of the curtailment amounting to Euro 5,960.

Line B.2 includes Euro 3,191 in “provisions for severance indemnities” reported by the 61 branches acquired from the UBI Banca Group on 31 December 2007.

142 143 SECTION 12

Provisions for risks and charges – Line item 120

12.1 Provisions for risks and charges: analysis

Banking Insurance Other 31/12/2007 31/12/2006 group companies companies 1. Pensions and similar commitments 9,191 – – 9,191 9,842 2. Other provisions 99,484 – – 99,484 71,777 2.1 Legal disputes 43,811 – – 43,811 32,621 2.2 Personnel expenses 13,524 – – 13,524 17,386 2.3 Other 42,149 – – 42,149 21,770

Total 108,675 – – 108,675 81,619 Provisions for pensions and similar charges refer to the Supplementary Section of the pension fund operated by Cariprato SpA, more details of which can be found in note 12.3. The Capitali- zation Section of this fund is a defined-contribution plan and so is not reported in the balance sheet, in compliance with IAS 19.

142 143 12.2 Provisions for risks and charges: changes during the year

Items/Amounts Banking group Insurance companies Other companies Total Pensions Other Total Pensions Other Total Pensions Other Total Pensions Other Total provisions provisions provisions provisions

A. Opening balance 9,842 71,777 81,619 – – – – – – 9,842 71,777 81,619

B. Increases 383 58,410 58,793 – – – – – – 383 58,410 58,793 B.1 Provisions – 54,407 54,407 – – – – – – – 54,407 54,407 B.2 Changes due to the passage of time – 21 21 – – – – – – – 21 21 B.3 “Changes due to variations in the discount rate” – – – – – – – – – – – – B.4 Other changes 383 3,982 4,365 – – – – – – 383 3,982 4,365

C. Decreases 1,034 30,703 31,737 – – – – – – 1,034 30,703 31,737 C.1 Utilizations during the year 1,034 28,794 29,828 – – – – – – 1,034 28,794 29,828 C.2 “Changes due to variations in the discount rate” – 39 39 – – – – – – – 39 39 C.3 Other changes – 1,870 1,870 – – – – – – – 1,870 1,870

D. Closing balance 9,191 99,484 108,675 – – – – – – 9,191 99,484 108,675

The Fund guarantees pension benefits to members that supplement those paid by INPS under Line B.1 “Provisions” comprises: the obligatory national scheme. These benefits can represent up to 75% of the last pensionable – Euro 12,193 in provisions for future personnel expenses relating to the employee incentive salary received (after 35 years of service). scheme, the matching entry to which is reported in “Payroll” (line item 180 a) of the income As of 31 December 2007, the Supplementary Section’s participants comprise 4 bank employees statement); and 141 pensioners. – Euro 41,092 in provisions for sundry risks and charges, the matching entry to which is re- The Fund’s financial statements have been prepared in accordance with IAS 19. ported in “Net provisions for risks and charges” (line item 190 of the income statement); – Euro 1,122 in provisions for the potential cost of bonuses earned by financial promoters (estimated on the basis of actual investment products placed at the balance sheet date), the match- 2. Changes in funds during the year ing entry to which is reported in “Fee and commission expense” (line item 50 of the income statement). The opening and closing balances of the present value of the defined benefit obligation are rec- onciled below, indicating the effects of changes during the year: The “other increases” reported in line B.4 relate to the portion of 2006 net income allocated to the provision for charitable donations, aid and works in the public interest, while the related uti- Description Mathematical reserve lizations are reported as “other decreases” in line C.3. Reserve at 31.12.2006 9,637 Net earnings of the Fund 383 12.3 Defined-benefit company pension funds Payments made (1,034) Actuarial profit (loss) - 2007 25 1. Description of funds Reserve at 31.12.2007 9,011 Cariprato SpA operates a supplementary pension fund for employees under an agreement signed Under IAS 19, the Fund made an actuarial loss during 2007, as represented by the difference be- on 30 June 1998 with the unions and its employees. This Fund, restricted under article 2117 of tween the size of the Fund as of 31 December 2007 and the reserve calculated at that date. the Italian Civil Code and governed by specific regulations, is divided into two Sections: Art. 8 of the Fund Regulations state that in the event of consistent surpluses in the Fund’s assets – the Capitalization Section which guarantees supplementary pension benefits on a defined- over its mathematical reserve, the contracting parties will seek appropriate solutions by using contribution basis, requiring the bank to pay an annual amount calculated with reference to these surpluses essentially for the provision of benefits to pensioners. In compliance with this the taxable base used for determining severance indemnity; rule, the overall accumulated actuarial profit of Euro 180 thousand at 31 December 2007 has – the defined-benefit Supplementary Section, which is described in this note. not been released to the bank’s income statement. The Supplementary Section represents the continuation, under current rules, of the original Fund set up under an in-house agreement dated 27 June 1972 to supplement the benefits payable by INPS. Its The Fund’s assets are all invested in liquid assets. participants comprise persons who were already pensioners as of 1 July 1998, as well as the employees of the bank on that date who opted to remain in the Supplementary Section.

144 145 3. Changes in year in plan assets and other information

The liquid assets in which the Fund’s cash balances are invested increased from Euro 9,842 thousand at 31 December 2006 to Euro 9,191 thousand at 31 December 2007. Decreases reflect the payment of Euro 1,034 thousand in pensions, while increases refer to Euro 383 thousand in interest income earned on cash balances.

4. Reconciliation between present value of the fund, present value of plan assets and assets and liabilities reported in the balance sheet

There are no differences between the present value of plan assets and the assets and liabilities reported in the balance sheet since all the fund’s resources are invested in liquid assets.

5. Description of principal actuarial assumptions

The amount of the supplementary fund in relation to the obligations to its participants is reviewed once a year by an independent actuary. The principal actuarial assumptions adopted for the latest calculation of the mathematical reserve at 31 December 2007 are set out below. This valuation has been made using the demographic, economic and financial assumptions described below.

Demographic assumptions the following criteria have been adopted: • probability of death of current employees and pensioners: mortality rates applying to the Ital- ian population published by ISTAT in 2002; in the case of underage orphans the probability was assumed to be zero; • probability of termination of service for absolute and permanent disability: probabilities adopted by the Treasury Ministry’s Pension Institutes, published in the report for 1969, reduced to 75% of the original amount; • age of retirement: it has been assumed that active employees who do not “die in service” or “retire for intervening disability” stop working as soon as they reach the minimum pensionable age/length of service established by current retirement legislation in Italy. As stated in the intro- duction, no person may receive benefits unless they also qualify for a pension payable by INPS; • calculation of indirect expenses and of reversibility: the calculation refers to the composition of the average surviving family unit, depending on sex and age of the pensioner’s death, and the number of years since death. The probabilities of marriage (by sex and age) and the probabilities of fertility (by age of the female and by order of birth of the children) have been taken from the ISTAT “Marriage tables” (1971) and from the ISTAT “Female fertility survey” (1974), with appropriate adjustments to take account of social changes in the past twenty years. In order to take account of the changes introduced by Law 335/1995 on the accumulation of surviving spouse pensions and beneficiary income, the pension payable by INPS to surviving spouses has been reduced to 60% (based on information obtained in relation to a major bank). • types of remuneration: these have been taken, with suitable standardization, from actual statistics relating to the staff of a bank at 31 December 1995, split between the four categories: managers and officials, male middle managers and clerical staff, female middle managers and clerical staff, subordinate and auxiliary staff. Since Cariprato only has a limited number of employees, it was not considered to be a source of sufficiently significant data.

146 147 Economic and financial assumptions

the following rates have been adopted: • technical discounting rate: 3.5% • annual inflation rate: 2% • annual rate of salary increases: 2.25% • annual growth in nominal GDP (art. 1.9 Law 335/1995): 3%

6. Comparative information

The present value of the defined-benefit obligation and the fair value of the plan assets and the plan’s surplus or deficit are presented for the current year and four previous ones:

Present value Fair value assets Surplus or (Deficit)

2002 14,008 14,092 16 2003 12,834 12,904 30 2004 11,515 11,761 178 2005 10,600 10,717 113 2006 9,638 9,842 204 2007 9,011 9,191 180

Like in the past, the fund’s surplus relative to its mathematical reserve means that it is currently not expected to have to make any new provisions in 2008.

12.4 Provisions for risks and charges– other provisions

The information required by paras. 85 and 86 of IAS 37 is provided below for each category of contingent liability.

The provision for legal disputes relates to contingencies associated with claims against the Group and from the liquidators of bankrupt companies.

The provision for employment costs refers to the incentive scheme and productivity bonuses for employees.

The other provisions for risks and charges relate to complaints from customers, fiscal disputes and other sundry charges.

Recent assessment indicates that the above contingencies are likely to be settled within the next 12/18 months. Consequently, the charges associated with the above liabilities have not been discounted since the effect would not be significant.

146 147 SECTION 13

Technical reserves

13.1 Technical reserves: analysis

Direct Indirect 31/12/2007 31/12/2006 business business

A. Loss sector – – – – A.1 Premium reserve – – – – A.2 Claim reserve – – – – A.3 Other reserves – – – –

B. Life sector – – – 511,607 B.1 Mathematical reserves – – – 505,074 B.2 Reserves for amounts payable – – – 4,117 B.3 Other reserves – – – 2,416

C. Technical reserves even though the investment risk is borne by the insured parties – – – – C.1 Reserves relating to contracts whose performance is related to investment funds and market indices – – – – C.2 Reserves deriving from the management of pension funds – – – –

D. Total technical reserves – – – 511,607

148 149 13.2 Technical reserves: changes during the year

Direct Indirect 31/12/2007 31/12/2006 business business

A. Opening balance 511,607 – 511,607 278,223

B. Increases 97,184 – 97,184 239,444 B.1 Provisions 77,024 – 77,024 235,394 B.2 Other increases 20,160 – 20,160 4,050

C. Decreases 608,791 – 608,791 6,060 C.1 Utilizations during the year 110 – 110 – C.2 Other decreases 608,681 – 608,681 6,060

D. Closing balance – – – 511,607 The cancellation of the technical reserves is due to the sale in the year of 50% of the shares in the insurance companies Berica Vita and Vicenza Life, which are no longer being consolidated line-by-line.

SECTION 14

Redeemable shares – Line item 150

Nothing has been classified in this section.

148 149 SECTION 15

Group equity – Line items 140, 160, 170, 180, 190 and 220

15.1 Group equity: analysis

Items/Amounts 31/12/2007 31/12/2006

1. Capital stock 261,656 230,868 2. Additional paid-in capital 1,963,297 1,557,856 3. Reserves 324,487 236,116 4. (Treasury shares): – – a) Parent Bank – – b) subsidiaries – – 5. Valuation reserves 66,081 153,719 6. Equity instruments 13,630 12,054 7. Net income for the year pertaining to the Group 113,731 144,502

Total 2,742,882 2,335,115 The “reserves” included in line 3 comprise the pre-existing profit reserves (legal reserve, statutory reserve, extraordinary reserve, reserve for the purchase of treasury shares etc.), as well as the positive and negative reserves associated with the transition to IAS/IFRS not classified in the other equity accounts. They also include the reserve for general banking risks recorded pursuant to the former Decree 87/92 which, in accordance with IAS, has been reclassified as part of equity.

The “valuation reserves” reported in line 5 include the reserves arising on the valuation of property, land and works of art at fair value rather than cost, on the first-time adoption of IAS/ IFRS, together with the valuation reserves relating to AFS financial assets and the monetary revaluation reserves. “Equity instruments” reported in line 6 relate to the equity component embedded in the “BPVi 13.a emissione 2007-2015” convertible bond issued by the Parent Bank which, in accordance with IAS 32, has been separated and classified in equity, net of tax.

15.2 “Capital stock” and “Treasury shares”: analysis

Items/Amounts 31/12/2007 31/12/2006

– Treasury shares 69,775,066 61,564,876 – Nominal value Euro 3.75 Euro 3.75

150 151 15.3 Capital stock-Number of shares issued by the Parent Bank: changes during the year

Items/Types Ordinary Other

A. Treasury shares at the beginning of the year 61,564,876 – – fully paid 61,564,876 – – not fully paid – – A.1 Treasury shares (-) – –

A.2 Outstanding shares: opening balance 61,564,876 –

B. Increases 8,756,547 – B.1 New issues 8,226,956 – – payment: 8,209,106 – – business combinations – – – conversion of bonds 5,709,106 – – exercise of warrants – – – other 2,500,000 – – bonus: 17,850 – – to employees 17,850 – – to directors – – – other – – B.2 Sale of treasury shares 529,591 – B.3 Other changes – –

C. Decreases 546,357 – C.1 Cancellation 16,766 – C.2 Purchase of treasury shares 529,591 – C.3 Disposal of companies – – C.4 Other changes – –

D. Outstanding shares: closing balance 69,775,066 – D.1 Treasury shares (+) – – D.2 Treasury shares at the end of the year 69,775,066 – – fully paid 69,775,066 – – not fully paid – –

15.5 Other information

31/12/2007 31/12/2006

Equity instruments 13,630 12,054

150 151 15.6 Valuation reserves: analysis

Items/Amounts Banking Insurance Other 31/12/2007 31/12/2006 group companies companies

1. Financial assets available for sale (72,633) – – (72,633) 15,030 2. Property, plant and equipment – – – – – 3. Intangible assets – – – – – 4. Hedges of foreign investments – – – – – 5. Cash-flow hedges – – – – – 6. Exchange differences – – – – – 7. Non-current assets held for sale – – – – – 8. Special revaluation laws 138,714 – – 138,714 138,689

Total 66,081 – – 66,081 153,719

15.7 Valuation reserves: changes during the year

15.7.1 attributable to the banking group

Financial Property, Intangible Hedges Cash-flow Exchange Non-current Special assets plant and assets of foreign hedges differences assets revaluation available equipment investments held for sale laws for sale

A. Opening balance 15,951 – – – – – – 138,689

B. Increases 28,508 – – – – – – 25 B.1 Increases in fair value 10,773 – – – – – – – B.2 Other changes 17,735 – – – – – – 25

C. Decreases 117,092 – – – – – – – C.1 Decreases in fair value 109,728 – – – – – – – C.2 Other changes 7,364 – – – – – – –

D. Closing balance (72,633) – – – – – – 138,714

152 153 15.7.2 attributable to insurance companies

A. Opening balance (921) – – – – – – –

B. Increases 10,778 – – – – – – – B.1 Increases in fair value 2,702 – – – – – – – B.2 Other changes 8,076 – – – – – – –

C. Decreases 9,857 – – – – – – – C.1 Decreases in fair value 6,889 – – – – – – – C.2 Other changes 2,968 – – – – – – –

D. Closing balance – – – – – – – –

15.8 Valuation reserves - AFS financial assets: analysis

Assets/Values Banking group Insurance companies Other businesses 31/12/2007 31/12/2006 Positive Negative Positive Negative Positive Negative Positive Negative Positive Negative reserve reserve reserve reserve reserve reserve reserve reserve reserve reserve

1. Debt securities 5,398 (26,517) – – – – 5,398 (26,517) 7,237 (2,478) 2. Equities 17,467 (68,064) – – – – 17,467 (68,064) 13,783 (3,083) 3. Mutual funds 689 (1,606) – – – – 689 (1,606) 531 (960) 4. Loans – – – – – – – – – –

Total 23,554 (96,187) – – – – 23,554 (96,187) 21,551 (6,521)

This table reports the positive and negative reserves, net of tax, arising on the fair value measurement of financial assets available for sale.

152 153 15.9 Valuation reserves - AFS financial assets: changes during the year

15.9.1 attributable to the banking group

Debt securities Equities Mutual funds Loans

1. Opening balance 5,837 10,543 (429) –

2. Positive changes 10,404 18,696 728 – 2.1 Increases in fair value 69 10,324 380 – 2.2 Release to the income statement of negative reserves: 695 2,461 – – – from impairment – – – – – from disposals 695 2,461 – – 2.3 Other changes 9,640 5,911 348 –

3 Negative changes 37,360 79,836 1,216 – 3.1 Negative changes in fair value 36,407 72,226 1,095 – 3.2 Impairment writedowns – 876 – – 3.3 Release to the income statement of positive reserves: from disposals 707 5,622 – – 3.4 Other changes 246 1,112 121 –

4 Closing balance (21,119) (50,597) (917) – Lines 2.3 and 3.4 report the positive and negative tax changes respectively in respect of movements in the year in the valuation reserve for AFS financial assets.

The reduction in this reserve for equities mainly reflects the decrease in the fair value of the investment in Cattolica Assicurazione, as discussed in Section 4 (Assets) of these explanatory notes.

154 155 15.9.2 attributable to insurance companies

Debt securities Equities Mutual funds Loans

1. Opening balance (1,078) 157 – –

2. Positive changes 7,209 3,569 – – 2.1 Increases in fair value 2,637 65 – – 2.2 Release to the income statement of negative reserves: 2,836 1,650 – – – from impairment – – – – – from disposals 2,836 1,650 – – 2.3 Other changes 1,736 1,854 – –

3. Negative changes 6,131 3,726 – – 3.1 Negative changes in fair value 5,621 1,268 – – 3.2 Impairment writedowns – – – – 3.3 Release to the income statement of positive reserves: from disposals 510 2,458 – – 3.4 Other changes – – – –

4. Closing balance – – – –

154 155 SECTION 16

Minority interests – Line item 210

16.1 Minority interests: analysis

Banking Insurance Other 31/12/2007 31/12/2006 group companies companies

1. Capital stock 46,323 – – 46,323 22,272 2. Additional paid-in capital 6,371 – – 6,371 3,487 3. Reserves 26,762 – – 26,762 22,809 4. (Treasury shares) – – – – – 5. Valuation reserves 10,744 – – 10,744 10,618 6. Equity instruments – – – – – 7. Net income (loss) for the year pertaining to minority interests 3,809 – – 3,809 3,641

Total 94,009 – – 94,009 62,827

16.2 Valuation reserves: analysis

Banking Insurance Other 31/12/2007 31/12/2006 group companies companies

1. Financial assets available for sale 155 – – 155 4 2. Property, plant and equipment – – – – – 3. Intangible assets – – – – – 4. Hedges of foreign investments – – – – – 5. Cash-flow hedges – – – – – 6. Exchange differences – – – – – 7. Non-current assets held for sale – – – – – 8. Special revaluation laws 10,589 – – 10,589 10,614

Total 10,744 – – 10,744 10,618

156 157 16.4 Valuation reserves - AFS financial assets: analysis

Assets/Values Banking group Insurance companies Other businesses 31/12/2007 Positive Negative Positive Negative Positive Negative Positive Negative reserve reserve reserve reserve reserve reserve reserve reserve

1. Debt securities 32 (1) – – – – 32 (1) 2. Equities 186 (33) – – – – 183 (33) 3. Mutual funds – (29) – – – – – (29) 4. Loans – – – – – – – –

Total 218 (63) – – – – 218 (63)

16.5 Valuation reserves: changes during the year

16.5.1 attributable to the banking group

A. Opening balance 4 – – – – – – 10,614

B. Increases 215 – – – – – – – B.1 Increases in fair value 204 – – – – – – – B.2 Other changes 11 – – – – – – –

C. Decreases 64 – – – – – – 25 C.1 Decreases in fair value 24 – – – – – – – C.2 Other changes 40 – – – – – – 25

D. Closing balance 155 – – – – – – 10,589

156 157 OTHER INFORMATION

1. Guarantees given and commitments

Operations Banking Insurance Other 31/12/2007 31/12/2006 group companies companies

1) Financial guarantees 466,421 – – 466,421 395,515 a) Banks 286 – – 286 – b) Customers 466,135 – – 466,135 395,515 2) Commercial guarantees 736,156 – – 736,156 678,596 a) Banks 37,233 – – 37,233 42,304 b) Customers 698,923 – – 698,923 636,292 3) Irrevocable commitments to make loans 1,749,935 – – 1,749,935 1,652,997 a) Banks 245,703 – – 245,703 196,458 i) certain to be called on 230,602 – – 230,602 181,459 ii) not certain to be called on 15,101 – – 15,101 14,999 b) Customers 1,504,232 – – 1,504,232 1,456,539 i) certain to be called on 58,389 – – 58,389 48,908 ii) not certain to be called on 1,445,843 – – 1,445,843 1,407,631 4) Commitments underlying credit derivatives:protection sold – – – – – 5) Assets lodged to guarantee the commitments of third parties – – – – – 6) Other commitments 1,402,656 – – 1,402,656 1,309,804

Total 4,355,168 – – 4,355,168 4,036,912 The table includes Euro 12,053 in “guarantees given” and Euro 3,005 in “commitments” reported by the 61 branches acquired from the UBI Banca Group on 31 December 2007.

“Other commitments” include the put options on debt securities and equities issued by the Bank, as well as undrawn revocable credit lines.

2. Assets pledged to guarantee own liabilities and commitments

Portfolio 31/12/2007 31/12/2006

1. Financial assets held for trading 113,186 340,597 2. Financial assets at fair value – – 3. Financial assets available for sal 237,414 189,574 4. Financial assets held to maturity – – 5. Loans and advances to banks – – 6. Loans and advances to customers – – 7. Property, plant and equipment – –

158 159 5. Administration and dealing on behalf of third parties

Type of service 31/12/2007 31/12/2006

1. Trading in financial instruments on behalf of third parties 6,849,449 8,334,521 a) Purchases 3,064,071 4,035,819 1. Settled 3,059,573 4,019,551 2. Unsettled 4,498 16,268 b) Sales 3,785,378 4,298,702 1. Settled 3,778,926 4,274,646 2. Unsettled 6,452 24,056 2. Private portfolios under management 2,146,554 2,413,405 a) Individual 1,473,457 1,888,029 b) Collective 673,097 525,376 3. Custody and administration of securities 17,248,026 15,728,325 a) Third-party securities on deposit: associated with activities as a custodian bank (excluding portfolio management) 1,244,069 1,303,910 1. securities issued by consolidated companies – – 2. other securities 1,244,069 1,303,910 b) Third party securities in custody (excluding portfolio management): other 14,881,354 13,216,534 1. securities issued by consolidated companies 4,052,570 4,049,882 2. other securities 10,828,784 9,166,652 c) Third-party securities on deposit with third parties 15,474,267 13,904,689 d) Own securities on deposit with third parties 1,122,603 1,207,881

4. Other transactions – –

158 159 Part C CONSOLIDATED INCOME STATEMENT

SECTION 1

Interest – Line items 10 and 20

Interest income and similar revenues: analysis

1.1.1 attributable to the banking group

Items/technical forms Performing financial assets Non-performing Other 31/12/2007 31/12/2006 Debt securities Loans assets assets

1. “Financial assets held for trading” 16,288 – – – 16,288 30,563 2. “Financial assets at fair value” 2,102 – – – 2,102 1,944 3. “Financial assets available for sale” 42,650 – – – 42,650 27,380 4. “Financial assets held to maturity” 2,243 – – – 2,243 1,877 5. Loans and advances to banks 39 77,732 – – 77,771 51,977 6. Loans and advances to customers 987 1,000,408 763 – 1,002,158 739,371 7. Hedging derivatives x x x – – 2 8. Financial assets sold but not derecognized – 100,652 – – 100,652 86,731 9. Other assets x x x 240 240 169

Total 64,309 1,178,792 763 240 1,244,104 940,014

1.1.2 attributable to insurance companies

Items/technical forms Performing financial assets Non-performing Other 31/12/2007 31/12/2006 Debt securities Loans assets assets

1. “Financial assets held for trading” 11,674 – – – 11,674 11,089 2. “Financial assets at fair value” – 100 – – 100 117 3. “Financial assets available for sale” – – – – – – 4. “Financial assets held to maturity” – – – – – – 5. Loans and advances to banks – 282 – – 282 – 6. Loans and advances to customers – – – – – – 7. Hedging derivatives x x x – – – 8. Financial assets sold but not derecognized – – – – – – 9. Other assets x x x – – –

Total 11,674 382 – – 12,056 11,206

160 161 1.3 Interest income and similar revenues: other information

1.3.1 Interest income on foreign currency financial assets

31/12/2007 31/12/2006

a) on foreign currency assets 22,279 24,006

1.4 Interest expense and similar charges: analysis

1.4.1 attributable to the banking group

Items/technical forms Payables Securities Other 31/12/2007 31/12/2006 liabilities

1. Deposits from banks (115,405) x – (115,405) (78,468) 2. Due to customers (170,467) x – (170,467) (88,254) 3. Debt securities in issue x (210,451) – (210,451) (134,686) 4. Financial liabilities held for trading – – (10,631) (10,631) – 5. Financial liabilities at fair value – (79,273) – (79,273) (46,577) 6. Financial liabilities associated with assets sold but not derecognized (79,181) – – (79,181) (82,072) 7. Other liabilities x x – – – 8. Hedging derivatives x x – – –

Total (365,053) (289,724) (10,631) (665,408) (430,057)

1.4.2 attributable to insurance companies

Items/technical forms Payables Securities Other 31/12/2007 31/12/2006 liabilities

1. Deposits from banks – x – – – 2. Due to customers – x – – – 3. Debt securities in issue x – – – – 4. Financial liabilities held for trading – – – – – 5. Financial liabilities at fair value (916) – – (916) – 6. Financial liabilities associated with assets sold but not derecognized – – – – – 7. Other liabilities x x – – – 8. Hedging derivatives x x – – –

Total (916) – – (916) –

160 161 1.6 Interest expense and similar charges: other information

1.6.1 Interest expense on foreign currency liabilities

31/12/2007 31/12/2006 a) on foreign currency liabilities (22,280) (21,030)

162 163 SECTION 2

Commissions – Line items 40 and 50

2.1 Fee and commission income: analysis

2.1.1 attributable to the banking group

Type of service/Segments 31/12/2007 31/12/2006

a) Guarantees given 11,011 10,652 b) Credit derivatives – – c) Management, intermediation and advisory services: 148,342 139,476 1. trading in financial instruments 3,025 2,179 2. foreign currency trading 10,626 10,886 3. portfolio management 24,404 26,508 3.1 individual 18,325 19,384 3.2 collective 6,079 7,124 4. custody and administration of securities 2,407 2,937 5. custodian bank 1,576 1,715 6. placement of securities 42,368 42,193 7. acceptance of orders 9,979 10,996 8. advisory services 6,084 3,867 9. distribution of third party services 47,873 38,195 9.1 portfolio management 486 915 9.1.1 individual 51 409 9.1.2 collective 435 506 9.2 insurance products 16,474 15,657 9.3 other products 30,913 21,623 d) Collection and payment services 17,512 19,565 e) Services for securitizations 4,650 5,509 f) Services for factoring transactions – – g) Tax collection services – – h) Other services 115,654 112,206

Total 297,169 287,408

162 163 2.1.2 attributable to insurance companies

Type of service/Segments 31/12/2007 31/12/2006

a) Guarantees given – – b) Credit derivatives – – c) Management, intermediation and advisory services: 7,339 11,330 1. trading in financial instruments – – 2. foreign currency trading – – 3. portfolio management – – 3.1 individual – – 3.2 collective – – 4. custody and administration of securities – – 5. custodian bank – – 6. placement of securities – – 7. acceptance of orders – – 8. advisory services – – 9. distribution of third party services 7,339 11,330 9.1 portfolio management – – 9.1.1 individual – – 9.1.2 collective – – 9.2 insurance products 7,339 11,330 9.3 other products – – d) Collection and payment services – – e) Services for securitization – – f) Services for factoring transactions – – g) Tax collection services – – h) Other services – –

Total 7,339 11,330

164 165 2.2 Fee and commission income: product and service distribution channels: banking group

Channels/Segments 31/12/2007 31/12/2006

a) At own branches: 109,206 102,471 1. portfolio management 24,404 26,508 2. placement of securities 40,731 40,555 3. third-party products and services 44,071 35,408 b) Door-to-door: 5,439 4,425 1. portfolio management – – 2. placement of securities 1,637 1,638 3. third-party products and services 3,802 2,787 c) Other distribution channels: – – 1. portfolio management – – 2. placement of securities – – 3. third-party products and services – –

2.2.1 Fee and commission income: product and service distribution channels: insurance companies

Channels/Segments 31/12/2007 31/12/2006

a) At own branches: 7,339 11,330 1. portfolio management – – 2. placement of securities – – 3. third-party products and services 7,339 11,330 b) Door-to-door: – – 1. portfolio management – – 2. placement of securities – – 3. third-party products and services – – c) Other distribution channels: – – 1. portfolio management – – 2. placement of securities – – 3. third-party products and services – –

164 165 2.3 Fee and commission expense: analysis

2.3.1 attributable to the banking group

Services/Segments 31/12/2007 31/12/2006 a) Guarantees received (117) (116) b) Credit derivatives – – c) Management and dealing services (9,573) (8,472) 1. trading in financial instruments (1,743) (2,078) 2. trading in foreign currency (306) (310) 3. portfolio management: (827) (830) 3.1 own portfolio (827) (830) 3.2 third-party portfolio – – 4. custody and administration of securities – – 5. placement of financial instruments (1,269) (1,202) 6. door-to-door distribution of financial instruments, products and services (5,428) (4,052) d) Collection and payment services (5,823) (6,128) e) Other services (14,617) (12,620)

Total (30,130) (27,336)

2.3.2 attributable to insurance companies

Services/Segments 31/12/2007 31/12/2006 a) Guarantees received – – b) Derivatives on loans – – c) Management and intermediation services – – 1. trading in financial instruments – – 2. trading in foreign currency – – 3. portfolio management: – – 3.1 own portfolio – – 3.2 third-party portfolio – – 4. custody and administration of securities – – 5. placement of financial instruments – – 6. Door-to-door distribution of financial instruments, products and services – – d) Collection and payment services – – e) Other services (8,962) (15,143)

Total (8,962) (15,143)

166 167 SECTION 3

Dividend and similar income – Line item 70

3.1 Dividend and similar income: analysis

Items/Income Banking group Insurance companies Other companies 31/12/2007 31/12/2006 Dividends Income Dividends Income Dividends Income Dividends Income Dividends Income from from from from from mutual mutual mutual mutual mutual funds funds funds funds funds

A. Financial assets held for trading 28,479 4,071 – – – – 28,479 4,071 24,302 776 B. Financial assets available for sale 3,874 – 2,400 – – – 6,274 – 3,788 293 C. Financial assets at fair value – – – – – – – – – – D. Equity investments – x – x – x – x – x

Total 32,353 4,071 2,400 – – – 34,753 4,071 28,090 1,069

Income from mutual funds classified as financial assets held for trading include Euro 3,400 in income distributed by the BPVi Giada Equity closed-end fund and Euro 510 for the related tax credit.

166 167 SECTION 4

Net trading income – Line item 80

4.1 Net trading income: analysis

4.1.1 attributable to the banking group

Transactions/Income items Gains Trading Losses Trading Net profit profits losses (loss)

1. Financial assets held for trading 2,435 12,519 (18,253) (71,240) (74,539) 1.1 Debt securities 751 4,908 (9,952) (7,163) (11,456) 1.2 Equities 8 7,434 (7,133) (63,422) (63,113) 1.3 Mutual funds 1,676 177 (1,168) (655) 30 1.4 Loans – – – – – 1.5 Other – – – – –

2. Financial liabilities held for trading – – – – – 2.1 Debt securities – – – – – 2.2 Payables – – – – – 2.3 Other – – – – –

3. Other financial assets and liabilities: exchange differences x x x x 11,188

4. Derivatives 299,014 1,051,607 (283,623) (1,018,542) 45,704 4.1 Financial derivatives: 299,014 1,051,607 (283,623) (1,018,542) 45,704 – on debt securities and interest rates 271,444 931,990 (256,051) (924,253) 23,130 – on equities andequity indices 27,570 119,500 (27,572) (93,858) 25,640 – on currency and gold x x x x (2,752) – other – 117 – (431) (314) 4.2 Credit derivatives – – – – –

Total 301,449 1,064,126 (301,876) (1,089,782) (17,647) Trading losses from equities mostly relate to a purchase and sale of listed shares close to their ex- div date. This loss has been absorbed by the gains on financial derivatives taken out in the same shares, reported in line 4.1 of the above table, and by the dividends received, reported in line item 70 of the income statement.

Trading profits (losses) and valuation gains (losses) relating to financial derivatives are presented on an open account basis for each individual financial instrument.

168 169 4.1.2 attributable to insurance companies

Transactions/Income items Gains Trading Losses Trading Net profit profits losses (loss)

1. Financial assets held for trading 192 1,181 (42) (13) 1,318 1.1 Debt securities 30 604 (42) (13) 579 1.2 Equities – – – – – 1.3 Mutual funds 162 577 – – 739 1.4 Loans – – – – – 1.5 Other – – – – –

2. Financial liabilities held for trading – – – – – 2.1 Debt securities – – – – – 2.2 Payables – – – – – 2.3 Other – – – – –

3. Other financial assets and liabilities: exchange differences x x x x –

4. Derivatives – – – – – 4.1 Financial derivatives: – – – – – – on debt securities and interest rates – – – – – – on equities and equity indices – – – – – – on currency and gold x x x x – – other – – – – – 4.2 Derivatives on loans – – – – –

Total 192 1,181 (42) (13) 1,318

168 169 SECTION 5

Net hedging gains (losses) – Line item 90

5.1 Net hedging gains (losses): analysis

Income items/Amounts Banking Insurance Other 31/12/2007 31/12/2006 group companies businesses

A Derivatives relating to: A.1 Fair value hedges – – – – 2,729 A.2 Hedged financial assets (Fair value) – – – – – A.3 Hedged financial liabilities (Fair value) – – – – – A.4 Cash-flow hedges – – – – – A.5 Foreign currency assets and liabilities – – – – –

Total income from hedging activities (A) – – – 2,729

B. Charges from: B.1 Fair value hedges – – – – (671) B.2 Hedged financial assets (Fair value) – – – – – B.3 Hedged financial liabilities (Fair value) – – – – – B.4 Cash-flow hedges – – – – – B.5 Foreign currency assets and liabilities – – – – –

Total charges from hedging activities (B) – – – – (671)

C. Net hedging gains (losses) – – – – 2,058 The amounts reported at 31 December 2006 refer to income and charges arising from the close- out during the year of the zero-cost collar to hedge price risk on the investment in Italease SpA.

170 171 SECTION 6

Disposal/repurchase gains (losses) – Line item 100

6.1 Disposal/repurchase gains (losses): analysis

Items/income items Banking group Insurance companies Other companies Profits Losses Net result Profits Losses Net result Profits Losses Net result

Financial assets 1. Loans and advances to banks – – – – – – – – – 2. Loans and advances to customers 16 (17) (1) – – – – – – 3. Financial assets available for sale 7,260 (1,204) 6,056 2,968 (4,486) (1,518) – – – 3.1 Debt securities 2,030 (1,111) 919 510 (2,836) (2,326) – – – 3.2 Equities 5,230 (93) 5,137 2,458 (1,650) 808 – – – 3.3 Mutual funds – – – – – – – – – 3.4 Loans – – – – – – – – – 4. Financial assets held to maturity – – – – – – – – –

Total assets 7,276 (1,221) 6,055 2,968 (4,486) (1,518) – – –

Financial liabilities

1. Deposits from banks – – – – – – – – – 2. Due to customers – – – – – – – – – 3. Debt securities in issue 1,730 (3) 1,727 – – – – – –

Total liabilities 1,730 (3) 1,727 – – – – – –

170 171 Items/income items 31/12/2007 31/12/2006 Profits Losses Net result Profits Losses Net result

Financial assets 1. Loans and advances to banks – – – – – – 2. Loans and advances to customers 16 (17) (1) 10 – 10 3. Financial assets available for sale 10,228 (5,690) 4,538 73,121 (2,762) 70,359 3.1 Debt securities 2,540 (3,947) (1,407) 674 (1,955) (1,281) 3.2 Equities 7,688 (1,743) 5,945 71,390 (477) 70,913 3.3 Mutual funds – – – 1,057 (330) 727 3.4 Loans – – – – – – 4. Financial assets held to maturity – – – – – –

Total assets 10,244 (5,707) 4,537 73,131 (2,762) 70,369

Financial liabilities 1. Deposits from banks – – – – – – 2. Due to customers – – – – – – 3. Debt securities in issue 1,730 (3) 1,727 11,442 (18,565) (7,123)

Total liabilities 1,730 (3) 1,727 11,442 (18,565) (7,123)

The gains and losses from “Financial assets available for sale” include the “release” to income of the positive and negative valuation reserves, recorded separately under equity at 31 December 2006, as a result of selling assets during the year.

The gains of the “banking group” relating to “Equities” classified as “Financial assets available for sale” principally relate to the sale during the year of all the shares held in Banca Popolare di Intra.

The figures at 31 December 2006 included, in the specific lines, the extraordinary effects of “significant non-recurring transactions”, namely the sale of all the shares in BNL, the sale of Italease SpA and the early redemption of the “Exchangeable BNL” bond.

172 173 SECTION 7

Net change in financial assets and liabilities at fair value – Line item 110

7.1 Net change in financial assets and liabilities at fair value: analysis

7.1.1 attributable to the banking group

Transactions/Income items Gains Gains on Losses Losses on Net profit disposals disposals (loss)

1. Financial assets – 897 (4,400) – (3,503) 1.1 Debt securities – 897 (4,400) – (3,503) 1.2 Equities – – – – – 1.3 Mutual funds – – – – – 1.4 Loans – – – – –

2. Financial liabilities 32,733 1,059 (9,353) (1,815) 22,624 2.1 Debt securities 32,733 1,059 (9,353) (1,815) 22,624 2.2 Deposits from banks – – – – – 2.3 Due to customers – – – – –

3. Foreign currency financial assets and liabilities: exchange differences x x x x –

4. Derivatives 4.1 Financial derivatives 14,591 1,580 (31,466) (6,483) (21,778) – on debt securities and interest rates 14,591 1,580 (31,466) (6,483) (21,778) – on equities and equity indices – – – – – – on currency and gold x x x x – – other – – – – – 4.2 Credit derivatives – – – – –

Total derivatives 14,591 1,580 (31,466) (6,483) (21,778)

Total 47,324 3,536 (45,219) (8,298) (2,657) Trading profits (losses) and valuation gains (losses) relating to financial derivatives are presented on an open account basis for each individual financial instrument.

172 173 7.1.2 attributable to insurance companies

Transactions/Income items Gains Gains on Losses Losses on Net profit disposals disposals (loss)

1. Financial assets 11,053 23,066 (28,535) (10,636) (5,052) 1.1 Debt securities 9,767 21,922 (25,899) (9,905) (4,115) 1.2 Equities – – – – – 1.3 Mutual funds 1,286 1,144 (2,636) (731) (937) 1.4 Loans – – – – –

2. Financial liabilities – 1,543 (679) – 864 2.1 Debt securities – – – – – 2.2 Deposits from banks – – – – – 2.3 Due to customers – 1,543 (679) – 864

3. Foreign currency financial assets and liabilities: exchange differences x x x x –

4. Derivatives 4.1 Financial derivatives – – – – – – on debt securities and interest rates – – – – – – on equities and equity indices – – – – – – on currency and gold x x x x – – other – – – – – 4.2 Credit derivatives – – – – –

Total derivative – – – – –

Total 11,053 24,609 (29,214) (10,636) (4,188)

174 175 SECTION 8

Net impairment adjustments – Line item 130

8.1 Net impairment adjustments to loans and advances: analysis

8.1.1 attributable to the banking group

Transactions/Income items Adjustments Writebacks 31/12/2007 31/12/2006 Specific Portfolio Specific Portfolio Write-offs Other A B A B

A. Loans and advances to banks (22) – – – 742 – – 720 108 B. Loans and advances to customers (10,819) (120,169) (43,263) 15,085 22,086 247 270 (136,563) (102,263)

C. Total (10,841) (120,169) (43,263) 15,085 22,828 247 270 (135,843) (102,155)

Key: A = interest B = other

8.2 Net impairment adjustments to financial assets available for sale: analysis

8.2.1 attributable to the banking group

Transactions/Income items Adjustments Writebacks 31/12/2007 31/12/2006 Specific Specific Write-offs Other A B

A. Debt securities – (773) – – (773) – B. Equities – (9,249) x x (9,249) (11,565) C. Mutual funds – – x – – (2,758) D. Loans and advances to banks – – – – – – E. Loans and advances to customers – – – – – –

F. Total – (10,022) – – (10,022) (14,323)

Key: A = interest B = other

The specific adjustments included in the “Other” column of line B “Equity instruments” almost entirely relate to the write-down during the year of the interest held in HOPA SpA.

174 175 8.4 Net impairment adjustments to other financial transactions: analysis

8.4.1 attributable to the banking group

Transactions/Income items Adjustments Writebacks 31/12/2007 31/12/2006 Specific Portfolio Specific Portfolio Write-offs Other A B A B

A. Guarantees given – (203) (301) – 42 – 36 (426) (172) B. Credit derivatives – – – – – – – – – C. Commitments to disburse funds – – – – – – – – – D. Other transactions – – – – – – – – –

E. Total – (203) (301) – 42 – 36 (426) (172)

Key: A = interest B = other

176 177 SECTION 9

Net premium income – Line item 150

9.1 Net premium income: analysis

Premiums from insurance business Direct Indirect 31/12/2007 31/12/2006 business business

A. Life sector A.1 Gross premiums recorded (+) 241,395 – 241,395 430,607 A.2 Premiums transferred to reinsurers (-) (218) x (218) (160) A.3 Total 241,177 – 241,177 430,447

B. Loss sector B.1 Gross premiums recorded (+) – – – – B.2 Premiums transferred to reinsurers (-) – x – – B.3 “Change in gross amount of premium reserve (+/-)” – – – – B.4 Change in premium reserve borne by reinsurers (+/-) – – – – B.5 Total – – – –

C.Total net premium income 241,177 – 241,177 430,447 After selling 50% of Berica Vita and Vicenza Life on 5 September 2007, these insurance companies have been carried at equity from this date rather than consolidated line-by-line.

Consequently, the contribution of these insurance companies to net premium income in 2007 is limited to the period before this date.

176 177 SECTION 10

Other insurance income (charges) – Line item 160

10.1 Other insurance income (charges): analysis

Line items 31/12/2007 31/12/2006

1. Net change in technical reserves (153,475) (390,589) 2. Period claims settled during the year (60,396) (27,879) 3. Other insurance income (charges) (22,459) (15,176)

Total (236,330) (433,644)

10.2 Analysis of “Net change in technical reserves”

Net change in technical reserves 31/12/2007 31/12/2006

1. Life sector A. Mathematical reserves (134,356) (355,264) A.1 Gross amount for year (134,356) (355,264) A.2 (-) Portion borne by reinsurers – – B. Other technical reserves (353) (637) B.1 Gross amount for year (353) (637) B.2 (-) Portion borne by reinsurers – – C. Technical reserves even though the investment risk is borne by the insured parties (18,766) (34,688) C.1 Gross amount for year (18,766) (34,688) C.2 (-) Portion borne by reinsurers – –

Total “Life sector reserves” (153,475) (390,589)

2. Loss sector Change in the technical reserves of the loss sector, excluding the claims reserve, net of transfers to reinsurers – –

178 179 10.3 Analysis of “Claims relating to the year”

Charges for claims 31/12/2007 31/12/2006

Life sector: Charges for claims, net of transfers to reinsurers A. Amounts paid (59,247) (27,865) A.1 Gross amount for year (59,247) (27,865) A.2 (-) Portion borne by reinsurers – – B. Changes in reserves for amounts to be paid (1,149) (14) B.1 Gross amount for year (1,149) (14) B.2 (-) Portion borne by reinsurers – –

Total “Life sector reserves” (60,396) (27,879)

Loss sector: Charges for claims, net of recoveries and transfers to reinsurers C. Amounts paid – – C.1 Gross amount for year – – C.2 (-) Portion borne by reinsurers – – D. Change in recoveries, net of the portion borne by reinsurers – – E. Change in claims reserve – – E.1 Gross amount for year – – E.2 (-) Portion borne by reinsurers – –

Total “Claims–loss sector” – –

10.4 Analysis of “Other insurance income/charges, net”

31/12/2007 31/12/2006

a) Charges “Life sector” (22,459) (15,176) b) Charges “Loss sector” – –

Total (22,459) (15,176) As already stated in Section 9, 50% of Berica Vita and Vicenza Life were sold on 5 September 2007, after which these insurance companies have been carried at equity rather than consolidated line-by-line.

Consequently, the contribution of these insurance companies to net premium income in 2007 is limited to the period before this date.

178 179 SECTION 11

Administrative costs – Line item 180

11.1 Payroll costs: analysis

Type of expense/Segments Banking Insurance Other 31/12/2007 31/12/2006 group companies companies

1. Employees (340,963) (685) – (341,648) (316,098) a) wages and salaries (253,659) (617) – (254,276) (235,038) b) social security contributions (64,228) (56) – (64,284) (57,845) c) severance indemnities (13,484) – – (13,484) – d) pension costs (694) – – (694) (1,146) e) provision for severance indemnities 3,521 (10) – 3,511 (13,881) f) provision for pensions and similar benefits: (1,047) – – (1,047) (2,605) – defined contribution (1,047) – – (1,047) (2,605) – defined benefit – – – – – g) payments to external – – supplementary pension funds: (5,282) (2) – (5,284) (4,565) – defined contribution (5,282) (2) – (5,284) (4,565) – defined benefit – – – – – h) costs deriving from equity-settled payment arrangements (1,048) – (1,048) (1,008) i) other personnel benefits (5,042) – – (5,042) (10) 2. Other personnel (1,237) – – (1,237) (1,223) 3. Directors (5,496) (71) – (5,567) (4,740)

Total (347,696) (756) – (348,452) (322,061) These costs also include provisions for future expenses relating to the employee incentive scheme and productivity bonuses, in compliance with IAS which require costs to be classified by “nature” of the expense.

The payroll costs for directors include the share of prior year net income payable to the same.

11.2 Average number of employees, by level: banking group

Banking Insurance Other 31/12/2007 31/12/2006 group companies companies

1. Employees 5,108 – – 5,108 4,874 a) Managers 116 – – 116 102 b) Middle managers 1,953 – – 1,953 1,816 of which: 3rd and 4th level 990 – – 990 920 c) Other employees 3,039 – – 3,039 2,956 2. Other personnel 24 – – 24 35

Total 5,132 – – 5,132 4,909

180 181 The average number of employees does not include the 219 staff of the 61 branches acquired from the UBI Banca Group on 31 December 2007.

11.5 Other administrative costs: analysis

31/12/2007 31/12/2006

1. Indirect taxes (53,217) (48,076) 2. Non-professional products and services (88,518) (84,883) 2.1. postage, telephone charges (15,535) (13,166) 2.2. security and valuables transportation (6,339) (5,224) 2.3. electricity, heating and water (5,879) (5,789) 2.4. transport (2,138) (1,711) 2.5. hire of programs and microfiches (1,290) (695) 2.6. data processing (50,230) (52,010) 2.7. stationery and printing (3,631) (2,779) 2.8. cleaning of premises (3,476) (3,509) 3. Professional services (19,582) (18,947) 4. Rentals (23,592) (21,037) 4.1. rent of buildings (22,490) (19,829) 4.2. machine lease installments (1,102) (1,208) 5. Maintenance of furniture and installations (7,227) (5,920) 6. Insurance premiums (3,328) (3,232) 7. Other expenses (42,511) (35,495) 7.1. surveys, searches and subscriptions (5,984) (3,747) 7.2. meal vouchers (4,833) (4,296) 7.3. emoluments of statutory auditors (968) (865) 7.4. membership fees (1,795) (1,466) 7.5. advertising and entertainment (13,337) (11,144) 7.6. other miscellaneous expenses (15,594) (13,977)

Total (237,975) (217,590)

180 181 SECTION 12

Net provisions for risks and charges – Line item 190

12.1 Net provisions for risks and charges: analysis

31/12/2007 31/12/2006 a) Provisions for legal disputes and other charges (12,119) (12,337) b) Provisions for other risks and charges (28,973) (4,572)

Total (41,092) (16,909) The provisions for legal disputes cover claims from the liquidators of bankrupt customers and other claims against the Group. The provisions for other risks and charges mainly relate to potential costs associated with the effects on customer loans of the current adverse climate on financial markets and the likely negative impact on the Group in terms of recovering its loans.

182 183 SECTION 13

Net adjustments to property, plant and equipment – Line item 200

13.1 Net adjustments to property, plant and equipment: analysis

13.1.1 attributable to the banking group

Assets/Income items Depreciation Impairment Writebacks Net result adjustments

A. Property, plant and equipment A.1 Owned (17,389) – – (17,389) – for business purposes (17,389) – – (17,389) – for investment purposes – – – – A.2 Held under finance lease: – – – – – for business purposes – – – – – for investment purposes – – – –

Total (17,389) – – (17,389)

13.1.2 attributable to insurance companies

Assets/Income items Depreciation Impairment Writebacks Net result adjustments

A. Property, plant and equipment A.1 Owned (12) – – (12) – for business purposes (12) – – (12) – for investment purposes – – – – A.2 Held under finance lease: – – – – – for business purposes – – – – – for investment purposes – – – –

Total (12) – – (12)

182 183 SECTION 14

Net adjustments to intangible assets – Line item 210

14.1 Net adjustments to intangible assets: analysis

14.1.1. attributable to the banking group

Assets/Income items Amortization Impairment Writebacks Net result adjustments

A. Intangible assets A.1 Owned (3,750) – – (3,750) – internally generated – – – – – other (3,750) – – (3,750) A.2 Held under finance lease – – – –

Total (3,750) – – (3,750)

14.1.2 attributable to insurance companies

Assets/Income items Amortization Impairment Writebacks Net result adjustments

A. Intangible assets A.1 Owned (2) – – (2) – internally generated – – – – – other (2) – – (2) A.2 Held under finance lease – – – –

Total (2) – – (2)

184 185 SECTION 15

Other operating charges/income – Line item 220

15.1 Other operating charges: analysis

31/12/2007 31/12/2006

1. Amortization of leasehold improvements (5,364) (4,052) 2. Other charges (5,013) (5,914)

Total (10,377) (9,966) The amount in line 1 relates to the amortization of leasehold improvements that cannot be separated from the related assets and which, accordingly, are not reported separately under property, plant and equipment. These costs are amortized over the period they are expected to benefit or the residual duration of the lease, whichever is shorter.

15.2 Other operating income: analysis

31/12/2007 31/12/2006

1. Expenses recharged to third parties on current and savings accounts 1,749 1,864 2. Property rental income 1,310 1,722 3. Recharge of stamp duty and other indirect taxes 37,438 36,557 4. Other income 29,954 22,046

Total 70,451 62,189 Other income includes Euro 1,915 for the additional return received during the year on junior notes held in relation to the Group’s own securitizations.

184 185 SECTION 16

Profit (loss) from equity investments – Line item 240

16. Profit (loss) from equity investments: analysis

Income item/Segments Banking Insurance Other 31/12/2007 31/12/2006 group companies companies

1) Companies under joint control A. Income 6,473 – – 6,473 6,439 1. Revaluations – – – – – 2. Profits from disposals – – – – – 3. Writebacks – – – – – 4. Other positive changes 6,473 – – 6,473 6,439 B. Charges – – – – – 1. Writedowns – – – – – 2. Impairment writedowns – – – – – 3. Loss from disposals – – – – – 4. Other negative changes – – – – –

Net result 6,473 – – 6,473 6,439

2) Companies subject to significant influence A. Income 41,283 – – 41,283 98 1. Revaluations – – – – – 2. Profits from disposals 38,828 – – 38,828 – 3. Writebacks – – – – – 4. Other positive changes 2,455 – – 2,455 98 B. Charges (845) – – (845) (43) 1. Writedowns – – – – – 2. Impairment writedowns – – – – – 3. Loss from disposals (395) – – (395) – 4. Other negative changes (450) – – (450) (43)

Net result 40,438 – – 40,438 55

Total 46,911 – – 46,911 6,494 “Profits from disposals” reported in line 2.A.2 all refer to the disposal of 50% of the insurance companies Berica Vita and Vicenza Life and the fund management company BPVi Fondi under the partnership agreement with the Cattolica Assicurazioni Group.

186 187 SECTION 17

Net gains (losses) arising on fair value adjustments to property, plant and equipment and intangible assets – Line item 250

17.1 Net gains (losses) arising on fair value adjustments to property, plant and equipment and intangible assets: analysis

17.1.1 Attributable to the banking group

Assets/Income item Revaluations Writedowns Exchange differences Net result at Net result at Positive Negative 31/12/2007 31/12/2006

A. Property, plant and equipment 335 (163) – – 172 102 A.1 Owned: 335 (163) – – 172 102 – for business purposes – – – – – – – for investment purposes 335 (163) – – 172 102 A.2 Held under finance lease: – – – – – – – for business purposes – – – – – – – for investment purposes – – – – – – B. Intangible assets – – – – – – B.1 Owned: – – – – – – B.1.1 internally generated – – – – – – B.1.2 other – – – – – – B.2 Held under finance lease – – – – – –

Total 335 (163) – – 172 102

186 187 SECTION 18

Adjustments to goodwill – Line item 260

31/12/2007 31/12/2006 a) Adjustments to goodwill (660) (1,040)

The adjustments reflect the impairment of goodwill arising on consolidation of Nuova Merchant SpA.

188 189 SECTION 19

Gains (losses) on disposal of investments – Line item 270

19.1 Gains (losses) on disposal of investments: analysis

Income item/Segments Banking Insurance Other 31/12/2007 31/12/2006 group companies companies

A. Buildings 651 – – 651 632 – Profit from disposals 671 – – 671 952 – Loss from disposals (20) – – (20) (320) B. Other assets (6) – – (6) 8 – Profit from disposals 22 – – 22 45 – Loss from disposals (28) – – (28) (37)

Net result 645 – – 645 640 The profits and losses reported above relate to the sale and/or retirement of certain property, plant and equipment.

188 189 SECTION 20

Income taxes on current operations – Line item 290

20.1 Income taxes on current operations: analysis

Income item/Segments Banking Insurance Other 31/12/2007 31/12/2006 group companies companies

1. Current income taxes (-) (87,838) (846) – (88,684) (79,242) 2. Change in prior period income taxes (+/-) 1,752 – – 1,752 (54) 3. Reduction in current taxes (+) – – – – – 4. Change in deferred tax assets (+/-) (4,466) (636) – (5,102) 18,874 5. Change in deferred tax liabilities (+/-) 15,382 – – 15,382 (33,434) 6. Income taxes for the year (75,170) (1,482) – (76,652) (93,856) Current income taxes include withholding taxes on income from capitalization policies and taxes paid abroad, as well as the option taken up by the Parent Bank to pay a flat tax under art. 1.48 of the 2008 Finance Act, releasing it from further tax on the differences between the book value and tax base of assets arising from deductions made for tax but not in the accounts up until 31 December 2007 (known as the “Form EC” release).

The change in prior period income taxes refers to surplus tax provisions booked in previous years.

The changes in deferred tax assets and deferred tax liabilities also include the effect of reducing the IRES and IRAP rates, as decreed by the 2008 Finance Act with effect from 1 January 2008.

SECTION 21

“Profit (loss) from disposal groups, net of tax” – Line item 310

Nothing has been classified in this section.

190 191 SECTION 22

Minority interests – Line item 330

22.1 Minority interests: analysis

31/12/2007 31/12/2006

1. Cassa di Risparmio di Prato SpA (2,569) (3,426) 2. Banca Nuova SpA (41) (52) 3. Nordest Merchant SpA (86) (163) 4. PrestiNuova SpA (138) – 5. BPVi Fondi Sgr SpA (227) – 6. Farbanca SpA (407) – 5. Verona Gestioni Sgr SpA (341) –

Total (3,809) (3,641)

190 191 SECTION 23

Other information

23.1 Amounts collected on behalf of third parties: debit and credit adjustments

31/12/2007 31/12/2006 a) Debit adjustments 3,515,066 3,259,745 1. Current accounts 14,498 13,402 2. Central portfolio 3,481,319 3,224,592 3. Cash 19,249 21,751 4. Other accounts – – b) Credit adjustments 3,684,124 3,391,089 1. Current accounts 9,767 11,329 2. Transferors of notes and documents 3,650,810 3,355,008 3. Other accounts 23,547 24,752

The difference between the “debit” and “credit” adjustments during the year, Euro 169,058, is classified in line item 100 “Other liabilities”.

192 193 SECTION 24

Earnings per share

Basis earnings per share and diluted earnings per share are reported below, as required by para. 70.b) of IAS 33.

Basic earnings per share is determined by dividing the results attributable to the holders of the Parent Bank’s ordinary equity instruments (the numerator) by the weighted average number of ordinary shares outstanding during the year (the denominator).

Diluted earnings per share is determined by adjusting both the results attributable to the holders of the Parent Bank’s ordinary equity instruments and the weighted average number of shares outstanding to take account of any dilutive effects associated with the new convertible bond issued during the year.

31/12/2007 31/12/2006

Earnings per share (basic) 1.684 2.359 Earnings per share (diluted) 1.685 2.274

24.1 Average number of ordinary shares on dilution of share capital

31/12/2007 31/12/2006

Weighted average number of ordinary shares 67,545,273 61,268,342 Dilution adjustment 1,691,987 5,871,922 Weighted average number of ordinary shares (fully diluted) 69,237,260 67,140,264

In order to determine the basic earnings per share, the weighted average number of ordinary shares outstanding is calculated with reference to the number of ordinary shares outstanding at the start of the year, as adjusted by the number of ordinary shares acquired or issued during the year multiplied by the number of days such shares were in circulation in proportion to the total number of days in the year. Treasury shares are not included in the total number of shares outstanding.

In order to determine the diluted earnings per share, the weighted average number of ordinary shares outstanding is increased by the weighted average number of additional ordinary shares that would have been outstanding had all potential ordinary shares with a dilutive effect been converted. The potential ordinary shares with a dilutive effect, calculated on the basis of the conversion ratio established by the regulations of the convertible bond issued in the year, were treated as if they had been converted into ordinary shares on the bond issue date (31 July 2007).

24.2 Other information

Since there are no preference shares, the results attributable to the holders of ordinary equity instruments coincide with net income for the year.

192 193 Part D SEGMENT INFORMATION

The composition of the various business segments is as follows:

Retail banks: Banca Popolare di Vicenza SCpA Cassa di Risparmio di Prato SpA Banca Nuova SpA Farbanca SpA

Product companies: B.P.Vi. Fondi SGR SpA Nordest Merchant SpA NEM Sgr SpA NEM 2 SGR SpA BPV Finance (International) Plc PrestiNuova SpA Verona Gestioni SGR SpA Nuova Merchant SpA

Service companies: Immobiliare Stampa SpA Monforte 19 Srl Servizi Bancari SpA

The composition of the various geographical areas is as follows:

Northern Italy: Banca Popolare di Vicenza SCpA Immobiliare Stampa SpA Servizi Bancari SpA B.P.Vi. Fondi SGR SpA Nordest Merchant SpA NEM Sgr SpA NEM 2 SGR SpA Monforte 19 Srl Verona Gestioni SGR SpA

Central Italy: Cassa di Risparmio di Prato SpA Nuova Merchant SpA Farbanca SpA

Southern Italy and the Islands: Banca Nuova SpA PrestiNuova SpA

Other EU countries: BPV Finance (International) Plc

194 195 A. PRIMARY SEGMENT

A.1 Distribution by business segments: income statement

Line items/Segments Retail Product Service Other Total banks companies companies

1. Interest income and similar revenues (line item 10) 1,198,637 57,613 223 - 313 1,256,160 2. Interest expense and similar charges (line item 20) - 639,018 - 41,595 - 908 15,197 - 666,324 3. Net fee and commission income (line item 60) 255,579 15,601 - 42 - 5,722 265,416 4. Dividend and similar income (line item 70) 77,207 1,043 – - 39,426 38,824 5. Net change in value of financial assets and liabilities (line items 80, 90, 100 and 110) - 13,060 527 – - 4,377 - 16,910 6. Net impairment adjustments to financial assets (line item 130) - 144,926 - 3,914 - 108 2,657 - 146,291 7. Net income from insurance activities (line items 150 and 160) – – – 4,847 4,847 8. Administrative costs (line item 180) - 578,284 - 16,857 - 11,076 19,790 - 586,427 9. Net provisions for risks and charges (line item 190) - 40,928 - 164 – – - 41,092 10. Net adjustments to property, plant and equipment (line items 200 and 210) - 14,810 - 522 - 5,591 - 230 - 21,153 11. Other operating charges/income (line items 220, 240, 250, 260 and 270) 96,675 2,336 26,588 - 18,457 107,142

Net result 197,072 14,068 9,086 -26,034 194,192 The “Other” column includes the eliminations not considered since they relate to other segments and consolidation adjustments.

194 195 A.2 Distribution by business segment: balance sheet

Retail Product Service Other Total banks companies companies

1. Loans and advances to customers (line item 70) 20,876,025 392,034 2,016 - 378,617 20,891,458 2. Deposits with banks and 2,308,574 27,780 9,476 - 170,054 2,175,776 liquid assets (line items 10 and 60) 3. Financial assets (line items 20, 30, 40 and 50) 1,597,213 640,492 4,106 - 68,528 2,173,283 4. Equity investments (line item 100) 1,143,050 2,700 – -1,093,365 52,385 5. Property, plant and equipment and intangible assets (line items 120 and 130) 945,779 5,455 250,852 220,459 1,422,545 6. Other assets (line items 150 and 160) 368,196 9,594 – 20,769 398,559

Total assets 27,238,837 1,078,055 266,450 -1,469,336 27,114,006

1. Due to customers (line item 20) 11,337,902 50,152 – 91,305 11,479,359 2. Deposits from banks (line item 10) 2,942,583 831,107 32,403 - 527,399 3,278,694 3. Financial liabilities (line items 30, 40 and 50) 8,938,318 23,517 – - 169,959 8,791,876 4. Other liabilities (line items 100, 110 and 120) 713,598 35,366 5,267 - 3,298 750,933

Total liabilities 23,932,401 940,142 37,670 -609,351 24,300,862

Total indirect deposits 17,639,088 – – – 17,639,088 The “Other” column includes the eliminations not considered since they relate to other segments and consolidation adjustments.

196 197 B. SECONDARY SEGMENT

B.1 Distribution by geographical area: income statement

Line items/Segments Italy Other Other Total Northern Central Southern Italy EU Italy Italy and Islands countries

1. Interest income and similar revenues (line item 10) 877,338 195,117 177,633 531 5,541 1,256,160 2. Interest expense and similar charges (line item 20) - 521,949 - 85,800 - 76,976 – 18,401 - 666,324 3. Net fee and commission income (line item 60) 189,415 41,103 40,306 7,169 - 12,577 265,416 4. Dividends and similar income (line item 70) 68,497 4,692 4,216 – - 38,581 38,824 5. Net change in value of financial assets and liabilities (line items 80, 90, 100 and 110) - 15,789 1,110 1,706 77 - 4,014 - 16,910 6. Net impairment adjustments to financial assets (line item 130) - 112,310 - 22,190 - 10,834 – - 957 - 146,291 7. Net income from insurance activities (line items 150 and 160) – – – – 4,847 4,847 8. Administrative costs (line item 180) - 373,851 – 107,356 - 105,137 - 4,582 4,499 - 586,427 9. Net provisions for risks - 26,240 - 8,369 - 6,740 – 257 - 41,092 and charges (line item 190) – 10. Net adjustments to property, plant and equipment (line items 200 and 210) - 13,620 - 3,496 - 3,782 - 111 - 144 - 21,153 11. Other operating charges/income (line items 220, 240, 250, 260 and 270) 92,986 9,941 6,653 353 - 2,791 107,142

Net result 164,477 24,752 27,045 3,437 - 25,519 194,192

The “Other” column includes the eliminations not considered since they relate to other segments and consolidation adjustments.

196 197 B.2 Distribution by geographical area: balance sheet

Line items/Segments Italy Other Other Total Northern Central Southern Italy EU Italy Italy and Islands countries

1. Loans and advances to customers (line item 70) 14,910,383 3,202,083 2,749,069 3,301 26,622 20,891,458 2. Deposits with banks and liquid assets (line items 10 and 60) 2,800,880 354,793 485,554 7,618 - 1,473,069 2,175,776 3. Financial assets (line items 20, 30, 40 and 50) 1,501,873 74,730 43,915 10,289 542,476 2,173,283 4. Equity investments (line item 100) 1,109,885 2,468 33,372 300 - 1,093,640 52,385 5. Property, plant and equipment and intangible assets (line items 120 and 130) 1,005,635 112,331 83,983 893 219,703 1,422,545 6. Other assets (line items 150 and 160) 238,985 52,694 73,277 601 33,002 398,559

Total assets 21,567,641 3,799,099 3,469,170 23,002 - 1,744,906 27,114,006

1. Due to customers (line item 20) 7,201,093 1,853,782 2,198,038 50,000 226,446 11,529,359 2. Deposits from banks (line item 10) 3,433,575 693,694 206,902 – - 1,055,477 3,278,694 3. Financial liabilities (line items 30, 40 and 50) 7,373,504 848,839 707,507 – - 137,974 8,791,876 4. Other liabilities (line items 100, 110 and 120) 542,521 110,657 109,649 10,691 - 22,585 750,933

Total liabilities 18,550,693 3,506,972 3,222,096 60,691 - 989,590 24,350,862

Total indirect deposits 14,216,009 2,089,580 1,333,499 – – 17,639,088

The “Other” column includes the eliminations not considered since they relate to other segments and consolidation adjustments.

198 199 Part E INFORMATION ON RISKS AND RELATED HEDGING POLICY

SECTION 1–RISKS OF THE BANKING GROUP

CREDIT RISK

QUALITATIVE DISCLOSURES

1. General aspects

Credit risk is the risk of losses due to non–performance by the counterparty (specifically the obligation to repay loans) or, more broadly, the failure of customers or their guarantors to meet their obligations.

Credit risk also usually includes Country risk, being the risk that public and private borrowers in a country might be affected by the political, economic and financial situation there. In such cases, the failure to meet their obligations may depend on external factors beyond their control (political and economic risks, currency controls etc.) that relate to the country in which they are resident.

Lending by the BPVi Group aims to support the development and consolidation of businesses, especially small and medium–sized firms, while also sustaining the borrowing needs of households. The primary objective of such lending is to facilitate the expansion of the local economies in which the Group’s banks are based.

In view of the general principles described above, the lending policy applied during the year was designed to respond to the needs of individuals and firms, while paying particular attention to the risk/return ratio and obtaining an adequate level of guarantees. These include mortgages, especially for longer–term exposures.

With reference to private customers, the development of activities focused on the longer–term segment with the granting of home mortgages and personal loans either directly via the Group’s banks or via other companies. In fact, during the year Prestinuova, a subsidiary of Banca Nuova specializing in the consumer credit sector in the form of loans against one–fifth of salary/pension, started to work on behalf of other Group banks.

The activities of the Group in relation to small businesses have mainly focused on short–term lending, where the risk is spread widely, using technical forms that are supported by underwrit- ing syndicates wherever possible. Medium–term lending has been expanded in relation to larger businesses, with a special focus on those secured against real estate. In all cases, special care has been taken in the selection of economic sectors, giving preference to lower risk activities. We have also supported the special financing needs of businesses.

The Group is not active in the field of credit derivatives.

2. Credit risk management policies

2.1 Organizational aspects

The Group’s regulations for the management of lending, contained in its Credit Manual, require a prudent approach to the assessment of risk. At the investigation stage, borrowers are required to provide all the documentation needed for an adequate assessment of their credit–worthiness.

198 199 Such documentation must allow assessment of the consistency between the amount requested, the technical form of the loan and the project to be financed; it must also allow the characteristics and qualities of borrowers to be identified, having regard for all forms of relationship with them.

The risks associated with individual customers of the same bank must be considered separately. If there are legal or economic relations between individual customers, these parties form a unit in risk terms and represent a Group (economic group or risk group). When granting and/or renewing lines of credit, it is necessary to verify the exposure by the entire BPVI Group to borrowers and that to any groups to which they belong. Pricing and/or income from the relationship cannot be a factor when evaluating credit–worthiness and agreeing a loan.

Account managers monitor and administer loans day by day and are responsible for their granting. If customer risk increases, the operating objective is to contain the bank’s risk by adopting the appropriate measures on a timely basis.

Further to the “New prudential supervisory instructions for banks” (Bank of Italy Circular 263/06), the Group has adopted a process which, as far as property securing loans is concerned, constantly checks and updates its estimated value, also by using statistical methods based on georeferenced systems. These instructions have also introduced a new category of anomalous loan (called “Past due”) for the purposes of isolating “Past due exposures”. Unlike the other existing classifications, the new one originates solely from the causes defined by the new supervisory rules.

With regard to the Basel II project, the rating models for retail customers (individuals and small firms) and for corporate customers were largely completed. The rating models for retail and corporate customers with up to 50 million euro in sales have been loaded on to the computer systems and are expected to enter use in the first half of 2008. The rating models for companies with over 50 million euro in sales are being tested by the Loans departments of Group banks.

2.2 Management, measurement and monitoring systems

The lending process is organized as follows:

– The granting of loans involves: investigation, assessment, decision, formalization of the loan and any guarantees; – The management of loans involves: way utilized, monitoring, review of facility, management of anomalies; – Management of non–performing loans and recovery of loans.

The first and most important step in the measurement and management of risk is taken when loans are granted. In particular, the investigation process identifies the parties involved, obtains and examines the documentation, checks the available databases and prepares the proposal. The investigation process is supported by different IT systems/functions that depend on the type of customer concerned. For individual and small businesses, the granting or otherwise of the facility requested is dealt with at branch or Area level for relatively small amounts. This follows a simplified process using an internal scoring system, which is an IT tool that checks credit– worthiness at the time new lines of credit are granted, using both internal and external sources of information.

200 201 The risk–management system (SGR) plays an important role in the monitoring and management of credit risk, allowing account managers to check on changes in the credit status of customers and quickly identify any deterioration in the standing of borrowers.

As required by the Supervisory Instructions (Part IV, Chapter 11, Section II), suitable systems for the identification, measurement and control of risks have been adopted in order to manage lending in a proper and prudent manner. Controls form an integral part of the daily activities of the Bank. There are four types:

– Functional controls: these are performed at organizational level (e.g. hierarchical controls) or are built into procedures or carried out as part of back–office work; – Risk–management controls: these contribute to defining the ways in which risk is measured, check compliance with the limits established for the various functions and monitor the consistency of operations. These controls are performed by functions without operational responsibilities; – Updating of customer profiles: the purpose of this activity is to update the credit rating of individual borrowers, at predetermined intervals; – Inspections: these are carried out by the audit function both on–site and on a remote basis, in order to verify the quality of loans and the support for decisions taken by the functions responsible for granting and administering loans.

2.3. Credit risk mitigation techniques

The credit risk associated with individual counterparties or groups is mitigated by obtaining security (pledges, mortgages and special privileges) and/or personal guarantees (sureties, endorse- ments, credit mandates and letters of patronage). The degree of mitigation attributed to each guarantee is governed by specific regulations that take account of the varying nature of the guarantees obtained.

Analysis of these guarantees does not reveal a special degree of concentration within the various technical forms of cover/guarantee since, except with regard to general sureties, they are essentially “specific” to each position. In addition, overall, there are no contractual restrictions that might undermine the legal validity of the guarantees obtained.

2.4 Impaired financial assets

Anomalous loans not classified as non–performing are monitored in a standard fashion by all banks by both the retail network and the Anomalous Loans units, whose mission is to “prevent default”. These Units, which report hierarchically and functionally to the Loans Department, are staffed at Head Office and, with regard to the Parent Company, in the Area offices responsible for the branch network.

The main tool used to identify “anomalous” loans is the SGR procedure which provides a “performance rating”. Each month, this procedure analyzes all individual and corporate customers who have borrowed at least 200 euro (the greater of the line of credit or the drawdown), excluding the positions that are already classified as past due, watchlist or non–performing, allocating them a rating that ex- presses the probability of default on a 12 point scale. This classification represents a forecast for the next 6–12 months.

Based on the class of risk identified, the SGR system proposes to the account manager a clas-

200 201 sification of the position in one of the following categories: “performing” (BO), “observation” (OS), “high risk” (AR) “past due” (SC).

The account manager, having assessed the real situation of the customer with regard to all positions that are not automatically classified as “performing”, may:

– agree with the proposed classification and therefore establish a suitable plan for improving the position; – disagree with the proposed classification, being in possession of information that justifies an exception to the system’s proposal, and not confirm the proposal. This option is not available for “past due” classifications since the anomaly is identified on the basis of objective factors (as defined by Basel 2) and may not be “excepted” by the account manager.

Accordingly, with regard to customers with “anomalies”, account managers are required to take a preventive approach rather than one based on justifications, thereby minimizing the need to take action for the forced recovery of loans. In general, positions remain under “observation” or “high risk” or “past due” for a maximum predefined period, after which they are either returned to “performing“ or transferred to “default”.

“Restructured” loans are not automatically identified and managed by the SGR procedure, but in compliance with the supervisory rules (“Cash and off–balance sheet exposures (...) for which a bank, due to deterioration in the borrower’s economic and financial status, allows the original contractual conditions to be revised (...) giving rise to a loss”), their management focuses on checking observance of the agreed restructuring plan and the fact that they may be compatible with other internal classifications, such as “watchlist”.

Activities relating to watchlist loans give priority to friendly, even if gradual, recovery of credit or at least to the mitigation of any negative effects in the event of default.

The classification of loans as “non–performing” is based on the criteria laid down in the supervisory regulations. Accordingly, this category comprises loans to parties that are insolvent or in similar circumstances, even if not confirmed by a judge, the recovery of which is the subject of court action or other suitable measures.

Specific staff functions within Banca Nuova and CariPrato are responsible for the management of non–performing loans and the recovery of loans, while since the start of 2008 the Parent Bank’s “Non–performing loans, recovery and disputed loans” unit has been incorporated in the Anomalous Loans unit forming part of the Loans Department.

These units consist of internal lawyers and personnel who carry out administrative and accounting activities in relation to the non–performing loans concerned. The accounting processes make use of an IT procedure common to all members of the Sec Servizi consortium.

Recovery activities are carried out on a pro–active basis, with a view to optimizing the legal procedures and maximizing the outcome in economic and financial terms. In particular, when evaluating the steps to take, internal lawyers prefer to take out–of–court action with recourse to settlements that accelerate recoveries and contain the level of costs incurred. Where this route is not applicable, and especially with regard to larger amounts and when greater recoveries can be expected, external lawyers are instructed to take legal action since this represents both a method of putting legitimate pressure on the debtor and a way to resolve disputes.

Small loans that are uncollectible or difficult to collect are generally grouped together and sold without recourse, given that legal action would be uneconomic in cost/benefit terms.

202 203 For financial reporting purposes, non–performing loans are analyzed on a case–by–case basis to determine the provisions required to cover expected losses. The extent of the loss expected from each relationship is determined with reference to the solvency of the debtor, the nature and value of the guarantees obtained and the progress made by recovery procedures. Estimates are made on a prudent basis and adopting discounting criteria, as required by accounting standards. This complex evaluation process is assisted by the subdivision of the loan portfolio into similar categories and year of origin, taking account of the realizable value of the personal and/or corporate assets of the debtor and the guarantors.

Lastly, the proper performance of the task of administering and evaluating non–performing loans is assured by both periodic internal audit checks and by external verification activities, carried out by the Board of Statutory Auditors and the independent auditors.

202 203 QUANTITATIVE DISCLOSURES

A. CREDIT QUALITY

A.1 IMPAIRED AND PERFORMING EXPOSURES: SIZE, ADJUSTMENTS, TRENDS, ECONOMIC AND TERRITORIAL DISTRIBUTION

A.1.1 Distribution of financial assets by portfolio and credit quality (book values)

Portfolio/Quality Banking group Other companies Total Non–performing Watchlist Restructured Past due Country Other Impaired Other risk assets assets

1. Financial assets held for trading 30 1,703 – 2,095 – 881,945 – – 885,773 2. Financial assets available for sale – – – – – 1,215,589 – – 1,215,589 3. Financial assets held to maturity – – – – – 46,129 – – 46,129 4. Loans and advances to banks – – – – 5,353 1,983,477 – – 1,988,830 5. Loans and advances to customers 315,531 272,254 40,360 87,815 2,829 20,172,669 – – 20,891,458 6. Financial assets at fair value – – – – – 25,792 – – 25,792 7. Financial assets being sold – – – – – – – – – 8. Hedging derivatives – – – – – – – – –

Total at 31/12/2007 315,561 273,957 40,360 89,910 8,182 24,325,601 – – 25,053,571

Total at 31/12/2006 271,813 220,156 8,863 108,376 23,340 20,775,301 – – 21,407,849

204 205 A.1.2 Distribution of financial assets by portfolio and credit quality (gross and net values)

Portfolio/quality Impaired assets Other assets Total Gross Specific Portfolio Net Gross Portfolio Net exposure adjustments adjustments exposure exposure adjustments exposure

A. Banking group 1. Financial assets held for trading 4,395 (567) – 3,828 881,945 – 881,945 885,773 2. Financial assets available for sale – – – – 1,215,594 (5) 1,215,589 1,215,589 3. Financial assets held to maturity – – – – 46,129 – 46,129 46,129 4. Loans and advances to banks – – – – 1,988,830 – 1,988,830 1,988,830 5. Loans and advances to customers 1,060,868 (300,568) (44,340) 715,960 20,281,331 (105,833) 20,175,498 20,891,458 6. Financial assets at fair value – – – – 25,792 – 25,792 25,792 7. Financial assets being sold – – – – – – – – 8. Hedging derivatives – – – – – – – –

Total A 1,065,263 (301,135) (44,340) 719,788 24,439,621 (105,838) 24,333,783 25,053,571

B. Other consolidated companies 1. Financial assets held for trading – – – – – – – – 2. Financial assets available for sale – – – – – – – – 3. Financial assets held to maturity – – – – – – – – 4. Loans and advances to banks – – – – – – – – 5. Loans and advances to customers – – – – – – – – 6. Financial assets at fair value – – – – – – – – 7. Financial assets being sold – – – – – – – – 8. Hedging derivatives – – – – – – – –

Total B – – – – – – – –

Total at 31/12/2007 1,065,263 (301,135) (44,340) 719,788 24,439,621 (105,838) 24,333,783 25,053,571

Total at 31/12/2006 894,837 (243,177) (42,452) 609,208 20,881,451 (82,810) 20,798,641 21,407,849

204 205 A.1.3 Cash and off–balance sheet exposures to banks: gross and net values

Type of exposure/Amounts Gross Specific Portfolio Net exposure adjustments adjustments exposure

A. CASH EXPOSURES A.1 Banking group a) Non–performing loans – – – – b) Watchlist loans – – – – c) Restructured exposures – – – – d) Past due exposures – – – – e) Country risk 5,353 x – 5,353 f) Other assets 2,446,725 x – 2,446,725

TOTAL A.1 2,452,078 – – 2,452,078

A.2 Other companies a) Impaired assets – x – – b) Other – x – –

TOTAL A.2 – – – –

TOTAL A 2,452,078 – – 2,452,078

B. OFF–BALANCE SHEET EXPOSURES B.1 Banking group a) Impaired assets – – – – b) Other 693,934 x – 693,934

TOTAL B.1 693,934 – – 693,934

B.2 Other companies a) Impaired assets – – – – b) Other – x – –

TOTAL B.2 – – – –

TOTAL B 693,934 – – 693,934

206 207 A.1.4 Cash exposures to banks: changes in gross impaired loans and loans subject to “country risk”

Categories Non–performing Watchlist Restructured Past due Country risk

A. Opening gross exposure 192 – – – 22,257 of which: sold but not derecognized – – – – –

B. Increases 22 – – – – B.1 Transfers from performing loans – – – – – B.2 Transfers from other categories of impaired exposure – – – – – B.3 Other increases 22 – – – – C. Decreases 214 – – – 16,904 C.1 Transfers to performing loans – – – – – C.2 Write–offs 214 – – – 258 C.3 Collections – – – – 16,646 C.4 Proceeds from disposals – – – – – C.5 Transfers to other categories of impaired exposure – – – – – C.6 Other decreases – – – – –

D. Closing gross exposure – – – – 5,353 of which: sold but not derecognized – – – – –

A.1.5 Cash exposures to banks: changes in total writedowns

Categories Non–performing Watchlist Restructured Past due Country risk

A. Total opening adjustments 192 – – – 1,000 of which: sold but not derecognized – – – – –

B. Increases 22 – – – – B.1 Adjustments 22 – – – – B.2 Transfers from other categories of impaired exposure – – – – – B.3 Other increases – – – – – C. Decreases 214 – – – 1,000 C.1 Write–backs on valuation – – – – 742 C.2 Write–backs due to collections – – – – – C.3 Write–offs 214 – – – 258 C.4 Transfers to other categories of impaired exposure – – – – – C.5 Other decreases – – – – –

D. Total closing adjustments – – – – – of which: sold but not derecognized – – – – –

206 207 A.1.6 Cash and off–balance sheet exposures to customers: gross and net values

Type of exposure/Amounts Gross Specific Portfolio Net exposure adjustments adjustments exposure

A. CASH EXPOSURES A.1 Banking group a) Non–performing loans 568,372 (252,841) – 315,531 b) Watchlist loans 358,409 (46,561) (39,594) 272,254 c) Restructured exposures 41,526 (1,166) – 40,360 d) Past due exposures 92,561 – (4,746) 87,815 e) Country risk 2,829 x – 2,829 f) Other assets 21,414,184 x (105,838) 21,308,346

TOTAL A.1 22,477,881 (300,568) (150,178) 22,027,135

A.2 Other companies a) Impaired assets – x – – b) Other – x – –

TOTAL A.2 – – – –

TOTAL A 22,477,881 (300,568) (150,178) 22,027,135

B. OFF–BALANCE SHEET EXPOSURES B.1 Banking group a) Impaired assets 19,578 (987) – 18,591 b) Other 4,217,179 x (178) 4,217,001

TOTAL B.1 4,236,757 (987) (178) 4,235,592

B.2 Other companies a) Impaired assets – – – – b) Other – x – –

TOTAL B.2 – – – –

TOTAL B 4,236,757 (987) (178) 4,235,592

208 209 A.1.7 Cash exposures to customers: changes in gross impaired loans and loans subject to “country risk”

Categories Non–performing Watchlist Restructured Past due Country risk

A. Opening gross exposure 477,740 321,105 9,055 110,862 2,083 of which: sold but not derecognized 6,317 22,790 – – –

B. Increases 213,868 338,242 32,639 95,440 746 B.1 Transfers from performing loans 24,081 303,978 32,639 89,689 – B.2 Transfers from other categories of impaired exposure 152,737 24,742 – 274 – B.3 Other increases 37,050 9,522 – 5,477 746 C. Decreases 123,236 300,938 168 113,741 – C.1 Transfers to performing loans 2,450 47,115 – 78,292 – C.2 Write–offs 66,319 7,207 – 1,436 – C.3 Collections 53,331 80,872 168 7,609 – C.4 Proceeds from disposals 730 13,633 – – – C.5 Transfers to other categories of impaired exposure – 151,349 – 26,404 – C.6 Other decreases 406 762 – – –

D. Closing gross exposure 568,372 358,409 41,526 92,561 2,829 of which: sold but not derecognized 22,454 43,392 – – –

208 209 A.1.8 Cash exposures to customers: changes in total writedowns

Categories Non–performing Watchlist Restructured Past due Country risk

A. Total opening adjustments 199,982 81,462 192 5,260 – of which: sold but not derecognized 255 1,654 – – –

B. Increases 146,069 43,575 976 2,058 – B.1 Adjustments 111,969 43,271 976 1,847 – B.2 Transfers from other categories of impaired exposure 20,566 – – – – B.3 Other increases 13,534 304 – 211 – C. Decreases 93,210 38,882 2 2,572 – C.1 Write–backs on valuation 20,277 4,478 2 322 – C.2 Write–backs due to collections 6,594 5,802 – – – C.3 Write–offs 66,319 7,207 – 1,436 – C.4 Transfers to other categories of impaired exposure – 19,752 – 814 – C.5 Other decreases 20 1,643 – – –

D. Total closing adjustments 252,841 86,155 1,166 4,746 – of which: sold but not derecognized 7,386 2,372 – – –

210 211 A. CREDIT QUALITY

A.2 CLASSIFICATION OF EXPOSURES BASED ON EXTERNAL AND INTERNAL RATINGS

A.2.1 Distribution of cash and “off–balance sheet” exposures by external rating class

This table is not provided given the modest value of exposures with an “external rating”.

A.2.2 Distribution of cash and “off–balance sheet” exposures by internal rating class

Group banks do not currently use a system of internal ratings in the process of making and renewing loans. Accordingly, this table has not been provided.

210 211 A.3 DISTRIBUTION OF GUARANTEED EXPOSURES BY TYPE OF GUARANTEE

A.3.1 Guaranteed cash exposures to banks and customers

Amount Secured guarantees Unsecured guarantees Total of exposure (1) (2) (1)+(2) Buildings Securities Other Credit derivatives Guarantees assets Governments Other public Banks Other Governments Other public Banks Other entities parties entities parties

1. Guaranteed exposures to banks: 22,800 – – – – – – – – – – 22,800 22,800 1.1 fully guaranteed 22,800 – – – – – – – – – – 22,800 22,800 1.2 partially guaranteed – – – – – – – – – – – – –

2. Guaranteed exposures to customers: 12,155,195 7,791,132 413,752 115,891 – – – – – 14,357 66,864 3,260,344 11,662,340 2.1 fully guaranteed 11,106,729 7,763,012 213,764 70,740 – – – – – 13,923 57,900 2,987,390 11,106,729 2.2 partially guaranteed 1,048,466 28,120 199,988 45,151 – – – – – 434 8,964 272,954 555,611

A.3.2 Guaranteed “off–balance sheet” exposures to banks and customers

1. Guaranteed exposures to banks: 197,013 – – – – – – – 196,837 – 176 – 197,013 1.1 fully guaranteed 197,013 – – – – – – – 196,837 – 176 – 197,013 1.2 partially guaranteed – – – – – – – – – – – – –

2. Guaranteed exposures to customers: 663,771 5,592 24,889 70,754 – – – – – 132 6,104 449,583 557,054 2.1 fully guaranteed 470,716 5,534 18,723 59,945 – – – – – 132 4,586 381,796 470,716 2.2 partially guaranteed 193,055 58 6,166 10,809 – – – – – – 1,518 67,787 86,338

212 213 A.3.3 Guaranteed impaired cash exposures to banks and customers

Amount Amount Guarantees (fair value) of exposure guaranteed Secured guarantee Unsecured guarantees Buildings Securities Other Credit derivatives assets Governments Other Banks Financial Insurance Non–financial Other and central public companies companies institutions issuers banks entities

1 Guaranteed exposures to banks: – – – – – – – – – – – – 1.1 150% or more – – – – – – – – – – – – 1.2 between 100% and 150% – – – – – – – – – – – – 1.3 between 50% and 100% – – – – – – – – – – – – 1.4 up to 50% – – – – – – – – – – – –

2 Guaranteed exposures to customers: 556,567 538,343 361,145 19,028 2,835 – – – – – – – 2.1 150% or more 197,341 197,341 169,699 682 379 – – – – – – – 2.2 between 100% and 150% 173,444 173,444 136,152 576 867 – – – – – – – 2.3 between 50% and 100% 175,208 163,105 53,346 17,290 1,279 – – – – – – – 2.4 up to 50% 10,574 4,453 1,948 480 310 – – – – – – –

Guarantees (fair value) Total Excess Unsecured guarantees fair value, Guarantees guarantee Governments Other Banks Financial Insurance Non– Other and central public companies companies financial parties banks entities institutions

1 Guaranteed exposures to banks: – – – – – – – – – 1.1 150% or more – – – – – – – – – 1.2 between 100% and 150% – – – – – – – – – 1.3 between 50% and 100% – – – – – – – – – 1.4 up to 50% – – – – – – – – –

2 Guaranteed exposures to customers: – 854 5,358 39,673 3,215 40,620 184,653 657,381 – 2.1 150% or more – 715 3,653 13,388 1,942 25,031 81,191 296,680 – 2.2 between 100% and 150% – – 1,645 14,661 1,273 11,771 26,200 193,145 – 2.3 between 50% and 100% – 139 60 11,379 – 3,712 75,900 163,105 – 2.4 up to 50% – – – 245 – 106 1,362 4,451 –

214 215 A.3.4 Guaranteed impaired “off–balance sheet” exposures to banks and customers

2 Guaranteed exposures to customers: 6,424 6,144 58 668 1,279 – – – – – – – 2.1 150% or more – – – – – – – – – – – – 2.2 between 100% and 150% 1,281 1,281 – 389 422 – – – – – – – 2.3 between 50% and 100% 5,143 4,863 58 279 857 – – – – – – – 2.4 up to 50% – – – – – – – – – – – –

2 Guaranteed exposures to customers: – – 80 160 – 1,386 2,513 6,144 – 2.1 150% or more – – – – – – – – – 2.2 between 100% and 150% – – 80 160 – 106 124 1,281 – 2.3 between 50% and 100% – – – – – 1,280 2,389 4,863 – 2.4 up to 50% – – – – – – – – –

216 217 B. DISTRIBUTION AND CONCENTRATION OF CREDIT

B.1 Distribution by sector of cash and “off–balance sheet” exposures to customers

Exposures/Counterparties Governments and central banks Other public entities Financial companies Gross Specific Portfolio Net Gross Specific Portfolio Net Gross Specific Portfolio Net exposure adjustments adjustments exposure exposure adjustments adjustments exposure exposure adjustments adjustments exposure

A. Cash exposures A.1 Non–performing loans – – – – – – – – 1,767 (1,638) – 129 A.2 Watchlist loans – – – – – – – – 469 (134) (2) 333 A.3 Restructured exposures – – – – – – – – – – – – A.4 Past due exposures – – – – – – – – 57 – (3) 54 A.5 Other exposures 87,108 x – 87,108 34,678 x (9) 34,669 1,701,191 x (7,620) 1,693,571

Total 87,108 – – 87,108 34,678 – (9) 34,669 1,703,484 (1,772) (7,625) 1,694,087

B. “Off–balance sheet” exposures B.1 Non–performing loans – – – – – – – – 2 – – 2 B.2 Watchlist loans – – – – – – – – – – – – B.3 Other impaired assets – – – – – – – – – – – – B.4 Other exposures 88,410 x – 88,410 8,761 x – 8,761 71,295 x – 71,295

Total 88,410 – – 88,410 8,761 – – 8,761 71,297 – – 71,297

Total at 31/12/2007 175,518 – – 175,518 43,439 – (9) 43,430 1,774,781 (1,772) (7,625) 1,765,384

Total at 31/12/2006 418,674 – 21 418,695 35,367 – – 35,367 1,654,276 (1,461) (3,839) 1,648,976

Exposures/Counterparties Insurance companies Non–financial institutions Other parties Gross Specific Portfolio Net Gross Specific Portfolio Net Gross Specific Portfolio Net exposure adjustments adjustments exposure exposure adjustments adjustments exposure exposure adjustments adjustments exposure

A. Cash exposures A.1 Non–performing loans – – – – 403,281 (173,496) – 229,785 163,324 (77,707) – 85,617 A.2 Watchlist loans – – – – 210,857 (31,953) (26,179) 152,725 147,083 (14,474) (13,413) 119,196 A.3 Restructured exposures – – – – 41,526 (1,166) – 40,360 – – – – A.4 Past due exposures 6 – (1) 5 67,683 – (3,492) 64,191 24,815 – (1,250) 23,565 A.5 Other exposures 286,275 x (16) 286,259 12,051,321 x (73,261) 11,978,060 7,256,440 x (24,932) 7,231,508

Total 286,281 – (17) 286,264 12,774,668 (206,615) (102,932) 12,465,121 7,591,662 (92,181) (39,595) 7,459,886

B. “Off–balance sheet” exposures B.1 Non–performing loans – – – – 3,698 (436) – 3,262 15 – – 15 B.2 Watchlist loans – – – – 7,847 (484) – 7,363 3,204 – – 3,204 B.3 Other impaired assets – – – – 4,445 (67) – 4,378 367 – – 367 B.4 Other exposures 7,822 x – 7,822 2,358,026 x (178) 2,357,848 1,682,865 x – 1,682,865

Total 7,822 – – 7,822 2,374,016 (987) (178) 2,372,851 1,686,451 – – 1,686,451

Total at 31/12/2007 294,103 – (17) 294,086 15,148,684 (207,602) (103,110) 14,837,972 9,278,113 (92,181) (39,595) 9,146,337

Total at 31/12/2006 120,392 – 547 120,939 12,867,702 (180,754) (112,346) 12,574,602 6,395,065 (61,563) (33,601) 6,299,901 218 219 B.2 Distribution of loans to non–financial businesses

31/12/2007 31/12/2006 a) Other services for sale 3,686,867 3,054,898 b) Commerce, salvage and repair services 1,993,807 1,490,963 c) Construction and public works 1,404,974 1,130,735 d) Textiles, leather and footwear, clothing 916,035 828,010 e) Other industrial products 567,000 522,765 f) Other sectors 3,822,974 3,137,413

Total 12,391,657 10,164,784

B.3 Geographical distribution of cash and “off–balance sheet” exposures to customers (book value)

Exposures/Counterparties ITALY OTHER EU COUNTRIES AMERICA ASIA REST OF THE WORLD Gross exposure Net exposure Gross exposure Net exposure Gross exposure Net exposure Gross exposure Net exposure Gross exposure Net exposure

A. Cash exposures A.1 Non–performing loans 562,184 315,419 5,743 92 417 – 28 20 – – A.2 Watchlist loans 358,409 272,254 – – – – – – – – A.3 Restructured exposures 41,526 40,360 – – – – – – – – A.4 Past due exposures 92,500 87,757 23 22 37 35 1 1 – – A.5 Other exposures 20,690,370 20,586,071 627,055 625,536 88,973 88,967 1,595 1,583 9,020 9,018

TOTAL 21,744,989 21,301,861 632,821 625,650 89,427 89,002 1,624 1,604 9,020 9,018

B. “Off–balance sheet” exposures B.1 Non–performing loans 3,715 3,279 – – – – – – – – B.2 Watchlist loans 11,051 10,567 – – – – – – – – B.3 Other impaired assets 4,812 4,745 – – – – – – – – B.4 Other exposures 4,176,070 4,175,892 11,722 11,722 29,315 29,315 – – 72 72

TOTAL 4,195,648 4,194,483 11,722 11,722 29,315 29,315 – – 72 72

Total at 31/12/2007 25,940,637 25,496,344 644,543 637,372 118,742 118,317 1,624 1,604 9,092 9,090

Total at 31/12/2006 20,714,968 20,329,295 721,454 714,556 51,001 50,600 2,163 2,140 1,890 1,889

220 221 B.4 Geographical distribution of cash and “off–balance sheet” exposures to banks

Exposures/Counterparts ITALY OTHER EU COUNTRIES AMERICA ASIA REST OF THE WORLD Gross exposure Net exposure Gross exposure Net exposure Gross exposure Net exposure Gross exposure Net exposure Gross exposure Net exposure

A. Cash exposures A.1 Non–performing loans – – – – – – – – – – A.2 Watchlist loans – – – – – – – – – – A.3 Restructured exposures – – – – – – – – – – A.4 Past due exposures – – – – – – – – – – A.5 Other exposures 1,953,778 1,953,778 332,337 332,337 80,738 80,738 7,808 7,808 77,417 77,417

TOTAL 1,953,778 1,953,778 332,337 332,337 80,738 80,738 7,808 7,808 77,417 77,417

B. “Off–balance sheet” exposures B.1 Non–performing loans – – – – – – – – – – B.2 Watchlist loans – – – – – – – – – – B.3 Other impaired assets – – – – – – – – – – B.4 Other exposures 344,815 344,815 303,475 303,475 28,476 28,476 12,422 12,422 4,746 4,746

TOTAL 344,815 344,815 303,475 303,475 28,476 28,476 12,422 12,422 4,746 4,746

Total at 31/12/2007 2,298,593 2,298,593 635,812 635,812 109,214 109,214 20,230 20,230 82,163 82,163

Total at 31/12/2006 1,840,502 1,849,852 851,274 852,813 142,246 141,281 28,558 28,558 88,800 88,800

B.5 Significant risks (pursuant to supervisory regulations)

31/12/2007 31/12/2006 a) amount 533,402 464,272 b) number 2 1

On the basis of instructions issued by the Bank of Italy, positions are considered significant if the overall exposure of a single customer is equal to or greater than 10% of the Group’s regulatory capital. The total weighted amount is indicated.

222 223 C. SECURITIZATIONS AND DISPOSAL OF ASSETS

C.1 SECURITIZATIONS

Qualitative disclosures

Objectives, strategies and processes underlying securitizations

In terms of the objectives and goals pursued, the Banca Popolare di Vicenza Group has arranged six securitizations of performing mortgage loans, the sole originator for the first three of which was the Parent Bank. The last three were multi–originator securitizations involving the other banks in the Group: Banca Nuova S.p.A. and CariPrato–Cassa di Risparmio di Prato S.p.A.

All these securitizations form a strategic part of the Group’s expectations of further expansion in the mortgage sector and the general process of expanding bank lending, which requires adequate liquidity to be raised in advance to meet future loan applications.

More specifically, the securitizations carried out address the following objectives: – to free up assets, while improving the treasury position; – to reduce maturity mismatching between deposits and long–term lending; – reduce the ratio of long–term lending to total lending.

The securitizations arranged between 2000 and 2006 are as follows: – Berica MBS Srl – Berica 2 MBS Srl – Berica 3 MBS Srl – Berica Residential MBS 1 Srl – Berica 5 Residential MBS Srl – Berica 6 Residential MBS Srl

With regard to the first four securitizations, the securitized assets were not reinstated on the first–time adoption of IAS 39, as allowed by para. 27 of IFRS 1.

The latest securitizations known as Berica 5 Residential Mbs and Berica 6 Residential Mbs, arranged subsequent to 1/1/2004, do not meet the derecognition requirements of IAS 39 since the Group subscribed for all of the junior asset–backed securities issued by the vehicle company. Accordingly, the residual securitized assets were reinstated at the above date and the related junior notes were eliminated. The securitized assets reported in the balance sheet have been valued using the same principles as for the Group’s own assets.

The individual banks involved in each securitization have signed specific servicing contracts with the respective vehicle companies for the coordination and supervision of the management, administration and collection of the securitized loans, as well as for recovery activities in the event of default by the borrowers. Both contracts require the payment of an annual fee for servicing and recompense for each position recovered. The function of servicer is carried out by specific structures within the company, whose work has been duly organized and is checked by internal auditors, who verify the propriety and conformity of its conduct with respect to the terms of the servicing contract.

Lastly, the banks concerned also act as the administrative servicer for the above securitizations, receiving a contractually–agreed fee from the vehicle company for providing this service.

BPV Finance specializes in managing several investment books, one of which is entirely devoted

224 225 to ABS. It applies a “buy and hold” policy to ABS deriving from the securitization of residential and commercial mortgages, as well as from other forms of financing, such as leasing, loans to small and medium–sized firms, and credit cards. The assets underlying the securitizations are geographically distributed in Western Europe and North America, the securities are denominated in Euro and must have a minimum single “A” rating (unless otherwise specifically approved by the Board of Directors).

BPV Finance’s front office is responsible for managing and selecting these positions, based on research produced by various investment banks.

The process of monitoring and measuring the risks involves the periodic collection and analysis of the investor reports published by the various originators during the year. In addition, the various positions are monitored through Bloomberg and websites specialized in monitoring such securities, and through publications and analysis produced by the different investment houses.

Internal systems for the measurement and control of risk

The residual risk for each bank in relation to the total insolvency of borrowers represents, for the own securitizations not reinstated, the value of the junior securities (highest degree of subordination) held.

The Group’s banks monitor changes in the key lending and financial variables relating to each securitization.

With a view to controlling risk, special attention is focused on the performance of the trigger ratios, which indicate default and delinquency experience, with respect to the excess spread that remunerates the junior securities held by the Group. The Board of Directors of each bank re- ceives a summary and detailed statement about the securitizations at least every six months.

Together with the issue of the ABS, a number of back–to–back swaps were arranged in the form of Interest Rate Swaps (IRS), in order to shield the vehicle company (SPV) from interest–rate risk. These instruments are measured at fair value, as discussed below, and are included in the periodic Asset & Liability Management (ALM) analysis which is performed at least every quarter.

Results from positions relating to securitizations

The risk relating to the first four own securitizations, not reinstated pursuant to para. 27 of IFRS 1, is represented by the junior securities held and the related back–to–back swaps arranged by Banca Popolare di Vicenza. The fair value of these financial instruments is measured with reference to analysis performed using a financial–mathematical model, developed together with an external firm of consultants, that evaluates the performance of the assets underlying the securities concerned. These evaluations were based on the results of the individual underlying transactions at the reference date, using specific assumptions about the principal variables that affect performance (rate of early loan repayments, rate of recognition of non–performing loans, percentage of expected losses, etc.).

224 225 The multi–originator securitization known as “Berica 5 Residential MBS Srl” did not meet the derecognition requirements established by IAS 39 and, accordingly, the securitized assets and the related liabilities have been reinstated in the financial statements. The residual amounts of the loans sold is classified as “assets sold but not derecognized” in asset line item 70 “Loans and advances to customers” and the related liabilities are classified as “liabilities relating to assets sold but not derecognized” in liability line item 20 “Due to customers”, while the corresponding junior securities have been eliminated. The “interest income and similar revenues” and “interest expense and similar charges” arising during the year in relation to the above assets and liabilities have been recognized, and an overall assessment of the reinstated securitized loans has also been performed with any writedowns reported in “net impairment adjustments to: loans and advances”.

Similarly, the last multi–originator securitization arranged at the start of the year, known as “Ber- ica 6 Residential MBS Srl”, has been reinstated in the financial statements. The residual amounts of the loans sold is classified as “assets sold but not derecognized” in asset line item 70 “Loans and advances to customers” and the related liabilities are classified as “liabilities relating to assets sold but not derecognized” in liability line item 20 “Due to customers”, while the corresponding junior securities have been eliminated. Accordingly, in relation to this securitization, the “interest income and similar revenues” and “interest expense and similar charges” arising during the year in relation to the above assets and liabilities have been recognized, and an overall assessment of the reinstated securitized loans has also been performed with any writedowns reported in “net impairment adjustments to: loans and advances”.

226 227 The principal results from positions relating to securitizations are summarized in the following table:

Securitizations Interest Positive Writebacks Other Gains Gains Total income (negative) (writedowns) income (losses) (losses) (expense) differential of loans (expenses) from disposals on valuation

1. Berica Mbs Srl 1,390 (771) – 181 154 (786) 168 – ABS 1,390 – – – 154 (1,006) 538 – Assets & liabilities reinstated in balance sheet – – – – – – – – Back to back swaps – (771) – – – 220 (551) – Securitization servicing – – – 181 – – 181 2. Berica 2 Mbs Srl 790 (983) – 577 628 (1,184) (172) – ABS 790 – – 301 628 (1,255) 464 – Assets & liabilities reinstated in balance sheet – – – – – – – – Back to back swaps – (983) – – – 71 (912) – Securitization servicing – – – 276 – – 276 3. Berica 3 Mbs Srl 892 (1,645) – 1,961 115 (1,476) (153) – ABS 892 – – 1,615 115 (2,139) 483 – Assets & liabilities reinstated in balance sheet – – – – – – – – Back to back swaps – (1,645) – – – 663 (982) – Securitization servicing – – – 346 – – 346 4. Berica Residential Mbs 1 Srl 923 (1,837) – 672 (239) (2,488) (2,969) – ABS 923 – – – (239) – 684 – Assets & liabilities reinstated in balance sheet – – – – – – – – Back to back swaps – (1,837) – – – (2,488) (4,325) – Securitization servicing – – – 672 – – 672 5. Berica 5 Residential Mbs Srl 8,435 (1,494) (2,849) 889 – – 4,981 – ABS – – – – – – – – Assets & liabilities reinstated in balance sheet 8,435 – (2,849) – – – 5,586 – Back to back swaps – (1,494) – – – – (1,494) – Securitization servicing – – – 889 – – 889 6. Berica 6 Residential Mbs Srl 13,430 405 (4,559) 2,143 – – 11,419 – ABS – – – – – – – – Assets & liabilities reinstated in balance sheet 13,430 – (4,559) – – – 8,871 – Back to back swaps – 405 – – – – 405 – Securitization servicing – – – 2,143 – – 2,143

Total 25,860 (6,325) (7,408) 6,423 658 (5,934) 13,274

This table does not include the changes in fair value of mezzanine and junior securities held by the Group and classified as “financial assets available for sale”, which are reported in the specific equity reserve. This reserve reported a negative balance of 22 Euro at 31 December 2007.

226 227 Rating agencies The following rating agencies were engaged to perform due diligence work on the above transactions and give ratings to the related ABS: – Berica MBS Srl securitization: Standard & Poor’s, Fitch Ibca, Moody’s; – Berica 2 MBS Srl securitization: Standard & Poor’s, Fitch Ibca; – Berica 3 MBS Srl securitization: Standard & Poor’s, Fitch Ibca; – Berica Residential MBS 1 Srl securitization: Standard & Poor’s, Fitch Ibca; – Berica 5 Residential MBS Srl securitization: Standard & Poor’s, Fitch Ibca; – Berica 6 Residential MBS Srl securitization: Standard & Poor’s, Fitch Ibca, Moody’s.

C.1.1 Exposures deriving from securitizations analyzed by quality of the underlying assets

Quality of underlying assets/Exposures Cash exposures Guarantees given Credit lines Senior Mezzanine Junior Senior Mezzanine Junior Senior Mezzanine Junior Gross Net Gross Net Gross Net Gross Net Gross Net Gross Net Gross Net Gross Net Gross Net exposure exposure exposure exposure exposure exposure exposure exposure exposure exposure exposure exposure exposure exposure exposure exposure exposure exposure

A. Own securitized underlying assets: 4,443 4,443 55,516 52,659 124,592 96,164 – – – – – – 12,374 12,374 – – – – a) Impaired loans – – – – – – – – – – – – – – – – – – b) Other 4,443 4,443 55,516 52,659 124,592 96,164 – – – – – – 12,374 12,374 – – – –

B. Third–party securitized underlying assets: 65,176 63,764 121,911 111,987 2,826 2,826 – – – – – – – – – – – – a) Impaired loans – – – – – – – – – – – – – – – – – – b) Other 65,176 63,764 121,911 111,987 2,826 2,826 – – – – – – – – – – – –

C.1.2 Exposures deriving from the principal “own” securitizations analyzed by type of asset securitized and type of exposure Type of underlying assets/Exposures Cash exposures Guarantees given Credit lines Senior Mezzanine Junior Senior Mezzanine Junior Senior Mezzanine Junior Book Writedowns/ Book Writedowns/ Book Writedowns/ Book Writedowns/ Book Writedowns/ Book Writedowns/ Book Writedowns/ Book Writedowns/ Book Writedowns/ value writebacks value writebacks value writebacks value writebacks value writebacks value writebacks value writebacks value writebacks value writebacks

A. Fully derecognized A.1 Berica MBS S.r.l. – residential mortgage loans – – – – 4,565 (15,038) – – – – – – – – – – – – A.2 Berica 2 MBS S.r.l. – residential mortgage loans – – 7,566 (619) 7,947 (8,651) – – – – – – 2,119 – – – – – A.3 Berica 3 MBS S.r.l. – residential mortgage loans – – 9,501 (599) 13,280 (4,739) – – – – – – 2,200 – – – – – A.4 Berica Residential MBS 1 S.r.l. – residential mortgage loans 4,443 – 10,130 (1,639) 28,499 – – – – – – – 3,000 – – – – – A.5 Siena Mortgages 02–03 S.r.l. – residential mortgage loans – – – – 227 – – – – – – – – – – – – – B. Partially derecognized C. Not derecognized C.1 Berica Residential MBS 5 S.r.l. – residential mortgage loans – – 16,897 – 35,927 – – – – – – – 5,055 – – – – – C.2 Berica 6 Residential MBS S.r.l. – residential mortgage loans – – 8,565 – 5,719 – – – – – – – – – – – – –

228 229 C.1.3 Exposures deriving from the principal “third–party” securitizations analyzed by type of asset securitized and type of exposure

Type of asset securitized/Exposure Cash exposures Guarantees given Credit lines Senior Mezzanine Junior Senior Mezzanine Junior Senior Mezzanine Junior Book Writedowns/ Book Writedowns/ Book Writedowns/ Book Writedowns/ Book Writedowns/ Book Writedowns/ Book Writedowns/ Book Writedowns/ Book Writedowns/ value writebacks value writebacks value writebacks value writebacks value writebacks value writebacks value writebacks value writebacks value writebacks

A.1 Memo Sec S.r.l. – Palermo 2 – performing receivables of Palermo Chamber of Commerce (annual fees) 856 – – – – – – – – – – – – – – – – – A.2 Libeccio S.r.l. – performing and non–performing receivables of Palermo Chamber of Commerce (annual fees) 999 – – – – – – – – – – – – – – – – – A.3 Boreale Finance S.r.l. – Region of Sicily tradesperson loans 7,081 – – – – – – – – – – – – – – – – – A.4 Turchese Finance S.r.l. performing and non–performing receivables of Palermo Chamber of Commerce (annual fees) 8,011 – 2,964 – – – – – – – – – – – – – – – A.3 COUK 2003–1 A – Credit cards 2,965 (35) – – – – – – – – – – – – – – – – A.4 LINEA 2002 A – Loans 106 (1) – – – – – – – – – – – – – – – – A.5 PMI 1 A – Loans 400 (4) – – – – – – – – – – – – – – – – A.6 SANCF 2002–1 A – Loans 433 (5) – – – – – – – – – – – – – – – – A.7 RECR IV A3 – Commercial mortgages 4,844 (157) – – – – – – – – – – – – – – – – A.8 EIRLES TWO LIMITED 303 – Commercial loans 9,684 (298) – – – – – – – – – – – – – – – – A.9 HARVT IV A1B – Commercial loans 2,890 (110) – – – – – – – – – – – – – – – – A.10 LOGGI 2003–1 A – Residential mortgages 3,205 (88) – – – – – – – – – – – – – – – – A.11 SMILE 01 A1A – Loans 241 (3) – – – – – – – – – – – – – – – – A.12 E–MAC NL03–II A – Residential mortgages 2,702 (58) – – – – – – – – – – – – – – – – A.13 OXFOR 2005–1 A1 – Loans 4,931 (69) – – – – – – – – – – – – – – – – A.14 SANTM 3 A3 – Loans 14,416 (584) – – – – – – – – – – – – – – – – A.15 EXPLO 2004–1 M – Taxes and social contributions – – 6,801 (216) – – – – – – – – – – – – – – A.16 SMILS 05 C – Loans – – 3,009 (213) – – – – – – – – – – – – – – A.17 CLISL 1X II – Commercial loans – – 3,684 (316) – – – – – – – – – – – – – – A.18 EURO 21 B – Commercial mortgages – – 1,909 (107) – – – – – – – – – – – – – – 230 231 Type of asset securitized/Exposure Cash exposures Guarantees given Credit lines Senior Mezzanine Junior Senior Mezzanine Junior Senior Mezzanine Junior Book Writedowns/ Book Writedowns/ Book Writedowns/ Book Writedowns/ Book Writedowns/ Book Writedowns/ Book Writedowns/ Book Writedowns/ Book Writedowns/ value writebacks value writebacks value writebacks value writebacks value writebacks value writebacks value writebacks value writebacks value writebacks

A.19 EURO 21 C – Commercial mortgages – – 3,124 (259) – – – – – – – – – – – – – – A.20 ZOO III–x E – Loans – – 383 (217) – – – – – – – – – – – – – – A.21 AYTBT 2006–II B – Loans – – 4,607 (395) – – – – – – – – – – – – – – A.22 MESDG 1 B – Residential and commercial mortgages – – 4,140 (302) – – – – – – – – – – – – – – A.23 IMMEO 2 C – Residential and commercial mortgages – – 2,791 (181) – – – – – – – – – – – – – – A.24 PROUD 1 C – Commercial mortgages – – 2,331 (169) – – – – – – – – – – – – – – A.25 FORES 1 B – Commercial mortgages – – 3,623 (377) – – – – – – – – – – – – – – A.26 AYTDS 2006–I B – Loans – – 3,690 (310) – – – – – – – – – – – – – – A.27 PTRMO 2006–1 C – Commercial mortgages – – 3,274 (226) – – – – – – – – – – – – – – A.28 RMFE IV–A III – Commercial loans – – 3,330 (670) – – – – – – – – – – – – – – A.29 FIPF 1 A2 – Commercial mortgages – – 5,527 (503) – – – – – – – – – – – – – – A.30 AGRI 2006–1 B – Leases on buildings, machinery and vehicles – – 3,498 (502) – – – – – – – – – – – – – – A.31 CPG 1 B – Loans – – 682 (23) – – – – – – – – – – – – – – A.32 PHARM 2 B – Leases on buildings, machinery and vehicles – – 3,404 (96) – – – – – – – – – – – – – – A.33 CREDI 3 B – Residential and commercial mortgages – – 3,559 (441) – – – – – – – – – – – – – – A.34 LOCAT 2005–3 B – Leases on cars, property and industrial vehicles – – 3,621 (379) – – – – – – – – – – – – – – A.35 SHELL II B – Residential mortgages – – 977 (22) – – – – – – – – – – – – – – A.36 PARGN 12X C1B – Residential mortgages – – 5,904 (602) – – – – – – – – – – – – – – A.37 EMCP 2006–3 C – Residential mortgages – – 2,234 (266) – – – – – – – – – – – – – – A.38 MERM 2007–1 C – Residential and commercial mortgages – – 1,885 (115) – – – – – – – – – – – – – – A.39 HFP 7 4B – Residential mortgages – – 2,949 (51) – – – – – – – – – – – – – – A.40 PARGN 10X C1B – Residential mortgages – – 3,208 (293) – – – – – – – – – – – – – – A.41 PARGN 11X CB – Residential mortgages – – 3,447 (354) – – – – – – – – – – – – – –

232 233 Type of asset securitized/Exposure Cash exposures Guarantees given Credit lines Senior Mezzanine Junior Senior Mezzanine Junior Senior Mezzanine Junior Book Writedowns/ Book Writedowns/ Book Writedowns/ Book Writedowns/ Book Writedowns/ Book Writedowns/ Book Writedowns/ Book Writedowns/ Book Writedowns/ value writebacks value writebacks value writebacks value writebacks value writebacks value writebacks value writebacks value writebacks value writebacks

A.42 GRAN 2003–2 2B – Residential mortgages – – 1,702 (62) – – – – – – – – – – – – – – A.43 GRAN 2004–1 2B – Residential mortgages – – 2,912 (88) – – – – – – – – – – – – – – A.44 UCI 17 B – Residential mortgages – – 5,944 (1.043) – – – – – – – – – – – – – – A.45 GRANM 2007–2 3M2 – Residential mortgages – – 6,302 (698) – – – – – – – – – – – – – – A.46 PARGN 15X CB – Residential mortgages – – 4,572 (428) – – – – – – – – – – – – – – A.47 SIENA MORTGAGES – Loans – – – – 2,826 – – – – – – – – – – – – –

C.1.4 Exposures to securitizations analyzed by portfolio and by type C.1.5 Total amount of securitized assets underlying the junior securities or other forms of credit instrument

Exposure/Portfolio Financial Financial Financial Financial Loans 31/12/2007 31/12/2006 Assets/Amounts Traditional securitizations Synthetic securitizations assets assets assets assets held for at fair available held to trading value for sale maturity A. Own underlying assets: 2,485,722 – A.1 Fully derecognized 783,072 1. Non–performing loans 20,226 x 2. Watchlist loans 19,598 x 1 Cash exposures 19,508 25,792 192,028 – 27,407 264,735 263,253 3. Restructured exposures – x – Senior 14,615 – 32,202 – 21,390 68,207 55,545 4. Past due exposures – x – Mezzanine 4,893 – 131,327 – 2,964 139,184 137,006 5. Other assets 743,248 x – Junior – 25,792 28,499 – 3,053 57,344 70,702 A.2 Partially derecognized – 1. Non–performing loans – x 2. “Off–balance sheet” exposures – – – – – – – 2. Watchlist loans – x – Senior – – – – – – – 3. Restructured exposures – x – Mezzanine – – – – – – – 4. Past due exposures – x – Junior – – – – – – – 5. Other assets – x A.3 Not derecognized 1,702,650 – 1. Non–performing loans 15,068 – 2. Watchlist loans 41,020 – 3. Restructured exposures – – 4. Past due exposures – – 5. Other assets 1,646,562 – B. Third–party underlying assets: 728,694 – B.1 Non–performing loans 8,128 – B.2 Watchlist loans 955 – B.3 Restructured exposures – – B.4 Past due exposures – – B.5 Other assets 719,611 –

234 235 C.1.6 Holdings in vehicle companies

Name Registered offices Interest %

– Berica MBS S.r.l. Milan 5.0 – Berica 2 MBS S.r.l. Vicenza 5.0 – Berica 3 MBS S.r.l. Vicenza 5.0 – Berica Residential MBS 1 S.r.l. Vicenza 5.0 – Berica 5 Residential MBS S.r.l. Vicenza 5.0 – Berica 6 Residential MBS S.r.l. Vicenza 5.0 – Siena Mortgages 02–03 S.r.l. Conegliano (TV) 0.9

C.1.7 Servicer activities–collection of securitized loans and redemption of securities issued by the vehicle company

Type of asset securitized/Exposure Securitized assets Loans collected Percentage of securities redeemed 31/12/2007 during the year 31/12/2007 Impaired Performing Impaired Performing Senior Mezzanine Junior assets assets assets assets Impaired Performing Impaired Performing Impaired Performing loans assets loans assets loans assets

– Berica MBS S.r.l. – 64,795 – 23,347 – 100.00% – 62.72% – 3.64% – Berica 2 MBS S.r.l. – 121,400 – 27,669 – 10.00% – 25.62% – 11.30% – Berica 3 MBS S.r.l. – 175,016 – 43,842 – 55.93% – – – 16.58% – Berica Residential MBS 1 S.r.l. – 363,166 – 58,446 – 37.53% – – – 13.47% – Berica 5 Residential MBS S.r.l. – 494,307 – 66,375 – 24.27% – – – – – Berica 6 Residential MBS S.r.l. – 1,208,343 – 126,479 – 100.00% – 1.48% – – – Siena Mortgages 02–3 S.r.l. – 58,695 – 13,308 – 52.50% – – – 95.80% – Memo Sec S.r.l.–Palermo 1 – – – 999 – – 100.00% – – 100.00% – Memo Sec S.r.l.–Palermo 2 1,649 – 170 – – 100%* 42.86%** – – – – Libeccio S.r.l. 2,406 – 226 – – 89.09%* – – – – – Rubino Finance S.r.l. – 49,306 – 10,421 – – – – – – – Boreale Finance S.r.l. – 6,278 – 2,654 – – – – – – – Turchese Finance S.r.l. – 15,050 – 8,446 – – – – – –

* Class A securities ** Class B securities

236 237 C.2 DISPOSALS

C.2.1. Financial assets sold but not derecognized

Type of asset securitized/Exposure Financial assets Financial assets Financial assets held for trading at fair value available for sale A B C A B C A B C

A. Cash assets 80,552 – – – – – – – – 1. Debt securities 80,552 – – – – – – – – 2. Equities – – – – – – – – – 3. Mutual funds – – – – – – – – – 4. Loans – – – – – – – – – 5. Impaired assets – – – – – – – – –

B. Derivatives – – – x x x x x x

Total at 31/12/2007 80,552 – – – – – – – –

Total at 31/12/2006 313,700 – – – – – – – –

Type of asset securitized/Exposure Financial assets held Loans and advances Loans and advances Total to maturity to banks to customers A B C A B C A B C

A. Cash assets – – – – – – 1,702,650 – – 1,783,202 1. Debt securities – – – – – – – – – 80,552 2. Equities x x x x x x x x x – 3. Mutual funds x x x x x x x x x – 4. Loans – – – – – – 1,646,562 – – 1,646,562 5. Impaired assets – – – – – – 56,088 x x 56,088

B. Derivatives x x x x x x x x x –

Total at 31/12/2007 – – – – – – 1,702,650 – – 1,783,202

Total at 31/12/2006 – – – – – – 1,715,353 – 177,284 2,206,337

236 237 C.2.2 Financial liabilities relating to financial assets sold but not derecognized

Liabilities/Assets portfolio Financial Financial Financial Financial Loans and Loans and Total assets assets assets assets advances advances held at fair available held to to banks to for trading value for sale maturity customers

1 Due to customers – – – – – 1,631,160 1,631,160 a) for assets recognized in full – – – – – 1,631,160 1,631,160 b) for assets recognized in part – – – – – – – 2 Deposits from banks 77,137 – – – – – 77,137 a) for assets recognized in full 77,137 – – – – – 77,137 b) for assets recognized in part – – – – – – –

Total at 31/12/2007 77,137 – – – – 1,631,160 1,708,297

Total at 31/12/2006 316,425 – – – – 1,859,739 2,176,164

238 239 D. MODELS USED FOR MEASURING CREDIT RISK

The Parent Bank has used the SGR (risk management system) since October 2004. This system was subsequently adopted by Cariprato (January 2005) and Banca Nuova (April 2005).

The related scoring system classifies customers in descending order of credit–worthiness. This is calculated with reference to performance parameters and information drawn from the Bank’s IT systems that may be indicative of changes in the level of risk associated with each counterparty.

The scores are calculated using three separate models: – private individuals: sector 600; – small businesses: personal businesses and firms with sales of less than 1.5 million euro; – corporate: firms with sales of more than 1.5 million euro.

The SGR is not a rating system: it is principally used to provide early–warning signals to account managers about possible problems with specific customers and encourage them, on a clearly– defined basis, to take appropriate corrective action in relation to higher–risk situations.

Operational aspects are described in paragraph 2 on “Credit risk management policies” found earlier in Part E.

Credit risk management activities in 2007 concentrated on developing new rating models for the various segments. The rating system for the Corporate segment is being used experimentally by the Credit Laboratory and has been revised using the customer database and qualitative information, as a result of which its performance has improved. A new rating model, based on “internal models”, for the Retail segment (private individuals and small businesses) was completed, which will be used in the process of making loans to this segment with the goal improved efficiency and more effective risk management.

Both models have been tested by the bank’s analysts and have provided very reassuring results in terms of how their expert opinions matched up to the models’ output.

238 239 1.2 – MARKET RISK

1.2.1 INTEREST–RATE RISK–TRADING BOOK FOR SUPERVISORY PURPOSES

QUALITATIVE DISCLOSURES

A. General aspects

Interest rate risk represents the risk of incurring losses due to adverse trends in the rates of return on debt securities and other interest rate related instruments. Three types of interest–rate risk can be identified:

– level. Risk associated with an absolute change in the forward structure of risk–free interest rates (parallel shifts in the yield curve); – curve and fundamental. The first identifies the risk deriving from a relative change in the structure of interest rates. The second derives from the imperfect correlation of the elements of a position, particularly with reference to hedging strategies; – credit spread. Risk deriving from changes in the prices of bonds and credit derivatives associated with unexpected changes in the issuer’s credit rating.

The investment policy adopted by the Group focuses on the optimization of operating results and on reducing their volatility.

The bond sector had a mixed performance in 2007. The first half of the year reported a clear rise in yields, across all markets and all maturities, stimulated by fears of inflation due to slack world economic growth; this was followed by a dramatic reversal with the explosion of the US real estate crisis and general credit crisis, resulting in a huge reduction in investor propensity for risk.

The Group’s own bond portfolio was managed by focusing on relative value strategies, by investing in positions sensitive to the steepening in yield curves and to differentials between rates implied in government securities and in rate derivatives such as futures and swaps. Management imposed a strategy for increasing duration near to important technical thresholds, using funded and unfunded products, even if strong sell–offs at the end of the first half of the year, just before the subprime crisis burst, forced a reduction in interest rate exposures, and prevented the portfolio from fully benefiting from the subsequent recovery in the second half of the year. The trading book also suffered from the extremely difficult situation in the credit sector, where the expo- nential, sudden widening of spreads, primarily in the financial sector, resulted in unsatisfactory performance even by external managers responsible for major investments. Given such a market crisis, the portfolio of BPV Finance, particularly exposed to widening of spreads, suffered a major decrease in the price of securities, resulting in a reduction in the value of the related equity reserve.

Important measures were taken in the last quarter to achieve a general reduction in the risk profile of the bond portfolio and to adopt a more flexible approach and less cash absorption when implementing investment strategies.

240 241 B. Management and measurement of interest rate risk

The control of all financial risks is centralized for all Group banks (including BPV Finance Plc) within the Risk Management unit of the Parent Bank’s Planning and Risk Management De- partment. Operational limits guide the activities of individual desks. These are monitored and checked at a first level by the Financial Control function within the Parent Bank’s Finance De- partment.

The parameters monitored and the related limits are described below, together with the first and second level controls over financial activity. In general, the limits distinguish between the various types of risk (rate, price and exchange) which, however, are managed within a single framework developed following consistent logic.

There are four operational levels within the finance department: a) Operational limits; b) Position limits: concentration and credit risk; c) Stop loss limits; d) Value at Risk (VaR) limits.

The structure of operational limits involves use of the following indicators: 1. Exchange rate risk: delta in monetary terms (cash equivalent position for spot, forward and rate derivative portfolios), Vega (change in market value on a change in volatility). 2. Equity risk: delta equivalent (market value of shares and cash equivalent position for equity derivatives). 3. Interest rate risk: sensitivity (change in profit or loss on a parallel shift in the reference curve by one–hundredth of a point), Vega (change in market value on a change in volatility). 4. Maximum invested amount: book value of cash securities/funds (gross of the derivatives’ delta) to ensure that assets and liabilities are balanced within the assigned budget limits.

The position limits set: 1. limits on the acceptance of credit risk: overall limits are established for the exposure to each rating class, especially those below investment grade; 2. limits on the concentration in individual issuers / issues, with tighter restrictions as the rating class of the issuer diminishes.

Stop loss limits are monitored with respect to the cumulative realized and unrealized results (including dividends on shares) at the start of each month, backed up by a cumulative check since the start of the year, with reporting to the responsible decision makers if cumulative losses exceed twice the monthly stop loss limits.

Responsibility for the daily first level checks on operating limits, position limits and stop loss limits is entrusted to the Financial Control office within the Finance Department, while the Risk Management office within the Planning and Risk Management Department carries out a weekly, second–level check of compliance with these limits.

VaR limits: Value at Risk (VaR) represents an estimate of the maximum potential loss on a portfolio of securities due to adverse market conditions.

240 241 The Risk Management Office is responsible for reporting VaR. This analysis is performed on a daily basis, partly to check that the VaR remains within the parameters established and defined by the Board of Directors.

The Group uses the historical simulation method for calculating VaR, based on 250 scenarios and using a 99% confidence level and a 10–day holding period. The VaR limits have been fixed for the three categories, rate, price, exchange rate.

Although adopting a common method of calculation, the method of reporting used two different software platforms in 2007: RiskManager by RiskMetrics© for the investment book, and the Murex VaR program for rate and exchange risks on OTC derivatives resulting from trading with customers. This explains why the summation of the three risk categories is still partly additive.

For the purposes of having a standard representation of the underlying risk factors and a consistent method of calculation, the Bank completed its testing of and migrated to a single risk calculation system using the VaR program by Murex, which has been operational since 1 January 2008. This decision has the benefit not only of using the same system of position keeping as for managing and measuring risks but also of producing important operational synergies. In addition, operational risks have also been reduced as a result of no longer having to replicate in a third system the positions and deals contained in the Bank’s official system. The adoption of the new system has involved the addition of adequate backtesting and stress testing functionalities, allowing VaR reports to present different scenarios in adverse market conditions and allowing risk measurements to be validated by daily comparison between the estimated loss and the theoretical profit & loss.

The calculation of VaR extends to all the trading book reported for supervisory purposes.

With regard to the back testing of the model with reference to actual results: – the component monitored using RiskManager by RiskMetrics© was subjected to model– based back testing, whereby the book positions at the time of calculating the VaR are revalued using the actual values taken by the risk factors on the following day. The overall results during the period analyzed were in line with expectations; – the component measured using the Murex VaR program was monitored by comparison with actual P&Ls, but this approach had an objective limitation due to the fact that the program cannot exclude intraday transactions, meaning that the results of the comparison are unreli- able. Work was begun to revise the Murex VaR program in order to overcome this technical limitation, so that it now provides a complete and adequate system of backtesting.

Stress testing was carried out on a daily basis, adopting two different types of scenario: the first actually took place in the not too distant past (11 September 2001), while the second is based on “ad hoc” assumptions. After revising the VaR calculation system, stress testing has been en- hanced with the addition of new scenarios providing a more complete picture of the portfolio’s performance in extreme market conditions.

The following scenarios have been adopted: 1. 11 September 2001. This considers the changes in the risk factors (stockmarket indices, interest rates and exchange rates) that occurred in the 10 days immediately following the terrorist attack on the World Trade Center in New York;

2. Flight to quality. This hypothesis assumes that, following a market shock, there is a surge in the demand for bonds that pushes up their prices and, consequently, lowers their yields. The assumptions involve a 10% reduction in market indices and a reduction via the steepening of

242 243 the yield curve, by lower amounts as maturities increase: –20 basis points (bp) up to 2 years, –15 bp from 2 to 5 years, –10 bp from 5 to 10 years, –5 bp beyond.

Only the portfolios monitored using the RiskManager by RiskMetrics© system were tested against these scenarios. The VaR models are used solely for management control purposes and are not used for the calculation of capital adequacy. The trends in VaR for the Bank’s trading book are described in point 2 below.

242 243 QUANTITATIVE DISCLOSURES

1.Trading book for supervisory purposes: distribution by residual maturity (repricing date) of recorded financial assets and liabilities and financial derivatives

Currency: EURO

Type/Residual duration Sight Up to 3 3 to 6 6 to 12 1 to 5 5 to 10 Over Unspecified months months months years years 10 years duration

1. Cash assets 1.1 Debt securities – with early redemption option – – – – – – – – – other – 76,841 45,111 12,643 31,392 71,590 106 – 1.2 Other assets – – – – – – – –

2. Cash liabilities 2.1 Debt securities – with early redemption option – – – – – – – – – other – (89,947) (92) – – – – – 2.2 Other liabilities – – – – – – – –

3. Financial derivatives 3.1 With underlying security – Options – long positions – 171,461 63,540 14,141 319 – 7,917 – – short positions – (155,702) (66,366) (6,654) – – (7,917) – – Other derivatives – long positions – 102,190 65,316 1,688 117 – – – – short positions – (302,779) (21,268) – (220) (56) – – 3.2 Without underlying security – Options – long positions 46,427 5,484,583 1,302,475 2,684,855 14,652,789 273,917 28,399 – – short positions (674,118) (6,523,111) (2,083,170) (3,007,938) (11,943,871) (224,163) (34,615) – – Other derivatives – long positions 673,513 10,251,859 5,602,187 7,399,865 6,556,536 1,216,518 123,431 – – short positions (544,811) (12,647,320) (6,653,721) (2,426,124) (8,019,091) (1,372,650) (77,774) –

244 245 Currency: USD

Type/Residual duration Sight Up to 3 3 to 6 6 to 12 1 to 5 5 to 10 Over Unspecified months months months years years 10 years duration

1. Cash assets 1.1 Debt securities – with early redemption option – – – – – – – – – other – – – – – – – – 1.2 Other assets – – – – – – – –

2. Cash liabilities 2.1 Debt securities – with early redemption option – – – – – – – – – other – – – – – – – – 2.2 Other liabilities – – – – – – – –

3. Financial derivatives 3.1 With underlying security – Options – long positions – 136,205 56,872 1,289 – – – – – short positions – (157,398) (61,864) (8,418) (296) – – – – Other derivatives – long positions – 239,693 6,890 – – – – – – short positions – (91,915) (395) (1,285) – – – – 3.2 Without underlying security – Options – long positions – – – – – – – – – short positions – – – – – – – – – Other derivatives – long positions – 285,081 258,385 328,523 245,228 – – – – short positions – (637,632) (120,704) (149,831) (259,697) – – –

244 245 Currency: GBP

Type/Residual duration Sight Up to 3 3 to 6 6 to 12 1 to 5 5 to 10 Over Unspecified months months months years years 10 years duration

1. Cash assets 1.1 Debt securities – with early redemption option – – – – – – – – – other – – – – – – – – 1.2 Other assets – – – – – – – –

3. Financial derivatives 3.1 With underlying security – Options – long positions – – 11,710 – – – – – – short positions – (9,580) (3,552) – – – – – – Other derivatives – long positions – 8,836 – – – – – – – short positions – – – – – – – – 3.2 Without underlying security – Options – long positions – – – – – – – – – short positions – – – – – – – – – Other derivatives – long positions – 4,246 1,473 – – – – – – short positions – (5,055) (1,773) (406) – – – –

246 247 Currency: CHF

Type/Residual duration Sight Up to 3 3 to 6 6 to 12 1 to 5 5 to 10 Over Unspecified months months months years years 10 years duration

1. Cash assets 1.1 Debt securities – with early redemption option – – – – – – – – – other – – – – – – – – 1.2 Other assets – – – – – – – –

3. Financial derivatives 3.1 With underlying security – Options – long positions – – – – – – – – – short positions – – – – – – – – – Other derivatives – long positions – – – – – – – – – short positions – – – – – – – – 3.2 Without underlying security – Options – long positions – – – – – – – – – short positions – – – – – – – – – Other derivatives – long positions – 302,390 140 139 – – – – – short positions – (326,208) (134) – – – – –

246 247 Currency: JPY

Type/Residual duration Sight Up to 3 3 to 6 6 to 12 1 to 5 5 to 10 Over Unspecified months months months years years 10 years duration

1. Cash assets 1.1 Debt securities – with early redemption option – – – – – – – – – other – – – – – – – – 1.2 Other assets – – – – – – – –

3. Financial derivatives 3.1 With underlying security – Options – long positions – 12,972 17,433 – – – – – – short positions – (6,701) (17,433) – – – – – – Other derivatives – long positions – – 61 – – – – – – short positions – (416) – (182) – – – – 3.2 Without underlying security – Options – long positions – – – – – – – _ – short positions – – – – – – – – – Other derivatives – long positions – 306,762 2,728 1,062 – – – – – short positions – (305,660) (3,637) (1,728) – – – –

248 249 Currency: Other currencies

Type/Residual duration Sight Up to 3 3 to 6 6 to 12 1 to 5 5 to 10 Over Unspecified months months months years years 10 years duration

1. Cash assets 1.1 Debt securities – with early redemption option – – – – – – – – – other – – – – – – – – 1.2 Other assets – – – – – – – –

3. Financial derivatives 3.1 With underlying security – Options – long positions – 14,745 – – – – – – – short positions – (3,134) – – – – – – – Other derivatives – long positions – 298 – – – – – – – short positions – (406) – – – – – – 3.2 Without underlying security – Options – long positions – – – – – – – – – short positions – – – – – – – – – Other derivatives – long positions – 2,406 248 45 – – – – – short positions – (305) (104) (45) – – – –

248 249 2. Trading book for supervisory purposes: internal models and other methods of sensitivity analysis Trends in VaR for the Group’s trading book in 2007 are described below. The portfolios of Ban- ca Nuova and Cariprato were almost entirely centralized with the Parent Bank’s Finance Depart- ment as from July 2006. The VaR of BPV Finance is not considered in the daily series shown below, since it is calculated on a weekly basis. The overall VaR of the entire Group (including BPV Finance) is however discussed with reference to the year–end situation.

VaR of the entire book

During the period examined, the Group’s 10–day Value at Risk (VaR) 99% averaged 7.6 million euro (0.88% of the theoretical market value of the portfolios analyzed), with a maximum and minimum of respectively 13.5 million euro (1.40%) and 4.2 million euro (0.50%).

At year end, the 10–day VaR (with a 99% confidence level) of the entire book (including BPV Finance) was 5.7 million euro.

The stress tests applied to the entire book on 31 December 2007 (last working day of the year) gave the following results: 1. 11 September 2001: if this scenario was applied to the book at this date, the Bank would have realized 1.2 million euro in profits thanks to the “flight to quality” effect on its securities.

2. Flight to quality: in this situation, the Parent Bank would have realized profits of 4.5 million euro. This result reflects the predominant proportion of bonds in the Bank’s overall securities book.

250 251 VaR regarding rate risk

The average VaR during the period was about 2.3 million euro (0.32% of the theoretical market value of the portfolios analyzed), with a maximum and minimum of respectively 3.7 million euro (0.53%) and 1.3 million euro (0.21%). At year end, the 10–day VaR (with a 99% confidence level) of the book subject to rate risk (including BPV Finance) was 2.6 million euro.

Sensitivity to interest rate risk (change in the portfolio’s value in the event of a parallel shift of one basis point in the rate curve) was –60 thousand euro at year end.

250 251 VaR of the equity book (price risk)

The VaR of the Parent Bank’s equity book during the period averaged 2.7 million euro and 5.21% in terms of market value. The maximum amounts in value and percentage terms were, respectively, 8.8 million euro and 12.61%, with minimums of 1 million euro and 0.35%. At year end, the 10–day VaR (with a 99% confidence level) of the equity book (including BPV Finance) was 1.6 million euro.

The VaR of this aggregate averaged 530 thousand euro, with a peak of 1.8 million euro and a minimum of 81 thousand euro. At 31 December 2007, the VaR was 250 thousand Euro.

252 253 1.2.2 INTEREST RATE RISK–BANKING BOOK

QUALITATIVE DISCLOSURES

A. General aspects, management and measurement of interest rate risk

The banking book comprises all the financial instruments, both assets and liabilities, that are not included in the trading book for supervisory purposes. The interest–rate risk incurred by Group banks in relation to their banking books mainly derives from intermediation activities and the consequent transformation of the maturities, arising in particular from the mis–match of assets and liabilities in terms of amount, due date, financial duration and rate.

Currently, no macro hedges have been arranged, but specific hedges have been arranged for the bonds issued by the Group and these are reported using the fair–value option (FVO). The derivative instruments arranged for the management of rate risk are plain vanilla hedges that are structured depending on the specific characteristics of the underlying instruments. The Parent Bank’s Planning and Risk Management Department is responsible for reporting the interest–rate risk relating to the banking book, and also does this for the subsidiary banks and other interest–rate sensitive Group companies, which maintain an interface for the analysis of these reports.

The Group’s ALM model satisfies the principal requirement of monitoring exposure of all interest–earning assets and interest–bearing liabilities to interest rate risk arising from changes in market conditions. A report is currently produced once a month for the purpose of analyzing interest rate exposure of both net interest income and the economic value of equity. Rate risk is monitored by performing the following types of analysis:

– net interest income (maturity gap analysis): estimate of the change in net interest income following a sudden, parallel shock to the rate curve (+100 bp); – fixed rate items: the analysis identifies any mis–matches (timing and amount) between fixed– rate financial items, as well as the effects of any hedging; – cash flow: estimate of the time distribution of balance sheet aggregates with reference to their redemption or expiry dates; – sensitivity of value (duration gap analysis): market value, duration, sensitivity, bucket sensitivity of value to a sudden, parallel shock to the rate curve of +/– 100 bp and +/–200 bp. Bucket sensitivity is calculated in accordance with the provisions of the Second Pillar of Basel 2, and is expressed as a percentage of regulatory capital.

The analyses currently performed are static and therefore exclude assumptions about future changes in the structure of assets and liabilities. The analyses also are performing by representing sight items in two ways. Under the first representation these balances adjust completely and instantly to the new market conditions. The second representation requires the differential between sight liabilities and sight assets with customers to be allocated to 12 monthly buckets over the year. In particular, the classification of assets and liabilities in the time bands recommended by the Bank of Italy involves:

Current accounts reported as assets are classified in “sight”, while the sum of current accounts reported as liabilities and unrestricted deposits is allocated as follows: to “sight” up to the amount of current accounts reported as assets; the balance, in the following four time bands (“up to 1 month”, “1 to 3 months”, “3 to 6 months”, “6 to 12 months”) in proportion to the number of months in each band. More details can be found in Bank of Italy Circular 263 dated 27 December 2006 – Part III – Annex C.

252 253 As planned, the new ALMPro system by Prometeia was activitated in the second half of 2007, with the purpose of having a tool capable of performing dynamic ALM modelling.

The Finance and ALMS Committee within the Parent Company is responsible for the overall management of the Group’s interest–rate risk. Monitoring and control activities are carried out on a monthly basis. The documentation produced is submitted to the Finance and ALMS Com- mittee. The Boards of Directors of the Parent Bank and its subsidiaries receive quarterly information on ALM.

Operational and strategic decisions regarding the banking book by the Finance and ALMS Com- mittee are designed to minimize the volatility in net interest income expected in the financial year (12 months) and so minimize the volatility in total equity value when interest rates change.

B. Fair value hedges

As mentioned earlier, the Group has arranged specific hedges for fixed–rate or structured bonds, which are reported using the fair value option (FVO). The strategy underlying the hedge is to reduce the duration of the liability or obtain certainty for the cost of structured issues.

C. Cash flow hedges Cash flow hedges are not arranged.

254 255 QUANTITATIVE DISCLOSURES

1. Banking book: distribution by residual duration (repricing date) of financial assets and liabilities

Currency: EURO

Type/Residual duration Sight Up to 3 3 to 6 6 to 12 1 to 5 5 to 10 Over Unspecified months months months years years 10 years duration

1. Cash assets 1.1 Debt securities – with early redemption option – – – – – – – – – other – 252,298 103,633 56,073 177,412 333,633 74,638 – 1.2 Loans to banks 569,123 1,123,609 75,064 1,297 32,029 – – 87,264 1.3 Loans to customers – current accounts 3,938,985 – – – – – – – – other loans – with early redemption option 12,352,792 335,769 30,785 23,684 140,486 141,936 343,502 – – other 799,038 69,382 27,318 42,680 203,911 107,009 288 403,346

2. Cash liabilities 2.1 Due to customers – current accounts (7,885,059) – (86) – – – – – – other payables – with early redemption option – – – – – – – – – other (640,061) (995,186) (4,694) (1,824) (50,155) – (184,812) – 2.2 Deposits from banks – current accounts (94,098) – – – – – – – – other payables (408,597) (2,323,300) (45,703) – (284,212) – – – 2.3 Debt securities – with early redemption option – – – – – – – – – other (25,473) (3,995,764) (542,430) (785,750) (2,313,839) (525,874) (14,042) – 2.4 Other liabilities – with early redemption option – – – – – – – – – other – – – – – – – –

3. Financial derivatives 3.1 With underlying security – Options – long positions – – – – – – – – – short positions – – – – – – – – – Other derivatives – long positions – – – – – – – – – short positions (25,435) – – – – – – – 3.2 Without underlying security – Options – long positions 5,219 – 4,024 – – – – – – short positions (560) (41,241) (4,024) – – – – – – Other derivatives – long positions 1,392,882 231,551 25,000 – – – – – – short positions – – (10,000) – – – – –

254 255 Currency: USD

Type/Residual duration Sight Up to 3 3 to 6 6 to 12 1 to 5 5 to 10 Over Unspecified months months months years years 10 years duration

1. Cash assets 1.1 Debt securities – with early redemption option – – – – – – – – – other – – – – – – – – 1.2 Loans to banks 15,298 2,443 – 297 – – – – 1.3 Loans to customers – current accounts 205 – – – – – – – – other loans – with early redemption option 67,551 189,515 14,487 10,242 18 – – – – other 916 – 476 – – – – –

2. Cash liabilities 2.1 Due to customers – current accounts (114,662) – – – – – – – – other payables – with early redemption option – – – – – – – – – other (205) (11,252) (1,921) (680) – – – – 2.2 Deposits from banks – current accounts (153) – – – – – – – – other payables – (166,408) (29,634) (29,012) – – – – 2.3 Debt securities – with early redemption option – – – – – – – – – other – – – – – – – – 2.4 Other liabilities – with early redemption option – – – – – – – – – other – – – – – – – –

3. Financial derivatives 3.1 With underlying security – Options – long positions – – – – – – – – – short positions – – – – – – – – – Other derivatives – long positions – – – – – – – – – short positions – – – – – – – – 3.2 Without underlying security – Options – long positions – – – – – – – – – short positions – – – – – – – – – Other derivatives – long positions – – 1,122 11 – – – – – short positions – (1,133) – – – – – –

256 257 Currency: GBP

Type/Residual duration Sight Up to 3 3 to 6 6 to 12 1 to 5 5 to 10 Over Unspecified months months months years years 10 years duration

1. Cash assets 1.1 Debt securities – with early redemption option – – – – – – – – – other – – – – – – – – 1.2 Loans to banks 2,269 – – – – – – – 1.3 Loans to customers – current accounts – – – – – – – – – other loans – with early redemption option 522 52 – – – – – – – other 4,228 – 463 – – – – –

2. Cash liabilities 2.1 Due to customers – current accounts (6,628) – – – – – – – – other payables – with early redemption option – – – – – – – – – other – (89) – – – – – – 2.2 Deposits from banks – current accounts (879) – – – – – – – – other payables (4,909) – – – – – – – 2.3 Debt securities – with early redemption option – – – – – – – – – other – – – – – – – – 2.4 Other liabilities – with early redemption option – – – – – – – – – other – – – – – – – –

3. Financial derivatives 3.1 With underlying security – Options – long positions – – – – – – – – – short positions – – – – – – – – – Other derivatives – long positions – – – – – – – – – short positions – – – – – – – – 3.2 Without underlying security – Options – long positions – – – – – – – – – short positions – – – – – – – – – Other derivatives – long positions – 4,730 – – – – – – – short positions – (4,364) – – – – – –

256 257 Currency: CHF

Type/Residual duration Sight Up to 3 3 to 6 6 to 12 1 to 5 5 to 10 Over Unspecified months months months years years 10 years duration

1. Cash assets 1.1 Debt securities – with early redemption option – – – – – – – – – other – – – – – – – – 1.2 Loans to banks 4,387 25,163 10,000 – – – – – 1.3 Loans to customers – current accounts – – – – – – – – – other loans – with early redemption option 43,620 997 291 – – – – – – other – – – – – – – –

2. Cash liabilities 2.1 Due to customers – current accounts (1,517) – – – – – – – – other payables – with early redemption option – – – – – – – – – other – (45) – – – – – – 2.2 Deposits from banks – current accounts (2,091) – – – – – – – – other payables (907) (31,021) (8,071) – – – – – 2.3 Debt securities – with early redemption option – – – – – – – – – other – – – – – – – – 2.4 Other liabilities – with early redemption option – – – – – – – – – other – – – – – – – –

3. Financial derivatives 3.1 With underlying security – Options – long positions – – – – – – – – – short positions – – – – – – – – – Other derivatives – long positions – – – – – – – – – short positions – – – – – – – – 3.2 Without underlying security – Options – long positions – – – – – – – – – short positions – – – – – – – – – Other derivatives – long positions 129 – – 229 – – – – – short positions – (358) – – – – – –

258 259 Currency: JPY

Type/Residual duration Sight Up to 3 3 to 6 6 to 12 1 to 5 5 to 10 Over Unspecified months months months years years 10 years duration

1. Cash assets 1.1 Debt securities – with early redemption option – – – – – – – – – other – – – – – – – – 1.2 Loans to banks 1,685 791 1,033 – – – – – 1.3 Loans to customers – current accounts – – – – – – – – – other loans – with early redemption option 13,784 584 – – – – – – – other – – – – – – – –

2. Cash liabilities 2.1 Due to customers – current accounts (1,995) – – – – – – – – other payables – with early redemption option – – – – – – – – – other (65) (88) (452) – – – – – 2.2 Deposits from banks – current accounts – – – – – – – – – other payables (8,412) (5,648) (3,462) – – – – – 2.3 Debt securities – with early redemption option – – – – – – – – – other – – – – – – – – 2.4 Other liabilities – with early redemption option – – – – – – – – – other – – – – – – – –

3. Financial derivatives 3.1 With underlying security – Options – long positions – – – – – – – – – short positions – – – – – – – – – Other derivatives – long positions – – – – – – – – – short positions – – – – – – – – 3.2 Without underlying security – Options – long positions – – – – – – – – – short positions – – – – – – – – – Other derivatives – long positions – 6,670 2 – – – – – – short positions – (6,672) – – – – – –

258 259 Currency: Other currencies

Type/Residual duration Sight Up to 3 3 to 6 6 to 12 1 to 5 5 to 10 Over Unspecified months months months years years 10 years duration

1. Cash assets 1.1 Debt securities – with early redemption option – – – – – – – – – other – – – – – – – – 1.2 Loans to banks 12,647 – – – – – – – 1.3 Loans to customers – current accounts – – – – – – – – – other loans – with early redemption option – – – – – – – – – other 11,485 104 – – – – – –

2. Cash liabilities 2.1 Due to customers – current accounts – – – – – – – – – other payables – with early redemption option – – – – – – – – – other (6,092) – – – – – – – 2.2 Deposits from banks – current accounts (7,859) – – – – – – – – other payables (7,542) (7,903) – – – – – – 2.3 Debt securities – with early redemption option – – – – – – – – – other – – – – (27,026) – – – 2.4 Other liabilities – with early redemption option – – – – – – – – – other – – – – – – – –

3. Financial derivatives 3.1 With underlying security – Options – long positions – – – – – – – – – short positions – – – – – – – – – Other derivatives – long positions – – – – 27,828 – – – – short positions – – – – – – – – 3.2 Without underlying security – Options – long positions – – – – – – – – – short positions – – – – – – – – – Other derivatives – long positions – – – – – – – – – short positions – – – – – – – –

260 261 2. Banking book: internal models and other methods of sensitivity analysis

As mentioned earlier, the Parent Bank uses a static ALM model to measure the sensitivity of current profits and the economic value of equity to the impact of changes in the structure of interest rates on the banking book.

With reference to expected net interest income, the model estimates the effect over 12 months of a parallel shift on the reference date of +100 basis points. With reference to the economic value of equity, the same assumed changes in the rate curve are used to measure the change in the present value of interest–rate sensitive balance sheet items for shifts of +/– 100 basis points and +/– 200 basis points.

As stated before, both estimates are currently made by assuming that the structure of the balance sheet remains unchanged in terms of aggregates and the mix of assets and liabilities. Stickiness of sight items is managed by applying the provisions of the Bank of Italy model.

The principal indicators of the banking book’s interest rate risk at 31 December 2007 are set out below. This data refers to the combined total of Banca Popolare di Vicenza, Cassa di Risparmio di Prato, Banca Nuova, FarBanca and PrestiNuova.

Banca Popolare di Vicenza Group

▲ Net interest income +100 bp euro -2,485,652 % Net interest income -0.42%

▲ Equity economic value +100 bp euro -73,519,235 % Regulatory capital -3.21%

▲ Equity economic value +200 bp euro -138,016,510 % Regulatory capital -6.02%

amounts in euro

260 261 1.2.3 PRICE RISK–TRADING BOOK FOR SUPERVISORY PURPOSES

QUALITATIVE DISCLOSURES

A. General aspects

Price risk represents the risk associated with changes in the value of equity portfolios due to fluctuations in market prices. This risk is analyzed between:

– Generic risk. Change in the price of an equity instrument following fluctuations in the market concerned; – Specific risk. Change in the market price of a specific equity instrument due to revised market expectations about the financial strength or prospects of the issuer.

Investment policy focuses on optimizing operating results and on reducing their volatility. The trading book is managed in accordance with the strategic guidelines provided by the Board of Directors.

After a sharp dip between February and March 2007, stockmarkets continued the bullish trend seen in the second half of the previous year, in some cases exceeding all–time highs towards the close of the half year, on the strength of expectations of strong economic growth. The summer macroeconomic figures, the unleashing of problems linked to the US credit and real estate crisis and the serious crisis on the money market put a stop to the upswing, while also provoking a major increase in volatility and a general repricing of risk premiums. This situation resulted in systematic intervention by central banks, particularly by the Federal Reserve , and produced a widespread feeling of uncertainty, resulting in unstable stockmarkets which nonetheless closed the year not far off their record levels.

After its investment book had fully benefited from the bull market at the start of the year, the Group’s strategy reflected expectations of a worsening situation for the macroeconomy and stockmarkets, based on acknowledged overvaluation of certain driving sectors and the market’s failure to understand the problems of the real estate market and the associated financial assets. This caused a few problems in the second quarter, made worse by the performance of certain positions in shares and the tactical decision in July when the real size of the downswing was partially underestimated. Having acknowledged the new market conditions produced by repeated stockmarket slumps over the summer, the Group took advantage of the natural and inconsistent rebounds over following months to sell off completely its remaining positions in shares, mutual funds and derivatives (options and futures), except for the more strategic bank stocks held.

B. Management and measurement of price risk

The processes for the management and measurement of price risk were described in section 2.1 “Interest–rate risk – Trading book for supervisory purposes”, to which reference is made.

262 263 QUANTITATIVE DISCLOSURES

1. Trading book for supervisory purposes: cash exposures in equities and mutual funds

Assets/Values Book value Listed Unlisted

A. Equities 17,631 – A.1 Shares 17,631 – A.2 Innovative equity instruments – – A.3 Other equities – – B. Mutual funds 9,812 46,317 B.1 Italian – 38,053 – open-end harmonized – – – open-end, not harmonized – – – closed-end – – – reserved – 33,728 – hedge funds – 4,325 B.2 Other EU nations 9,812 – – open-end harmonized 843 – – open-end, not harmonized 8,969 – – closed-end, not harmonized – – B.3 Non-EU nations – 8,264 – open-end – 8,264 – closed-end – –

Total 27,443 46,317

2. Trading book for supervisory purposes: distribution of the exposures in equities and stock indices by principal country and market of listing

Assets/Amounts Listed Unlisted Italy Usa UK France Holland

A. Equities – long positions 16,264 – – 260 394 – – short positions – – – – – – B. Unsettled transactions in equities – long positions – – – – – – – short positions – – – – – – C. Other derivatives on equities – long positions – – – – – 2,401 – short positions – – – – – (2,402) D. Derivatives on equity indices – long positions – – – – – 40,873 – short positions – – – – – (40,916)

3. Trading book for supervisory purposes: internal models and other methods of sensitivity analysis

The processes for the management and measurement of price risk in relation to listed equities and mutual funds were described in section 2.1 “Interest–rate risk – Trading book for supervisory purposes”, to which reference is made. 262 263 1.2.4. PRICE RISK–BANKING BOOK

QUALITATIVE DISCLOSURES

A. General aspects, management and measurement of price risk

The Group’s banking book comprises minority holdings in equities classified as available for sale (AFS) and investments in mutual funds. Majority interests are also included.

B. Hedging of price risk

No hedges are arranged.

264 265 QUANTITATIVE DISCLOSURES

1. Banking book: cash exposures in listed equities and mutual funds

Assets/Amounts Book value Listed Unlisted

A. Equities 233,268 230,059 A.1 Shares 233,268 229,815 A.2 Innovative equity instruments – – A.3 Other equities – 244 B. Mutual funds 4,235 35,842 B.1 Italian 4,235 35,842 – open-end harmonized – 631 – open-end, not harmonized – – – closed-end 4,235 8,292 – reserved – 8,684 – hedge funds – 18,235 B.2 Other EU nations – – – open-end harmonized – – – open-end, not harmonized – – – closed-end, not harmonized – – B.3 Non-EU nations – – – open-end – – – closed-end – –

Total 237,503 265,901

2. Banking book: internal models and other methods of sensitivity analysis

The processes for the management and measurement of price risk in relation to listed equities and mutual funds were described in section 2.1 “Interest–rate risk – Trading book for supervisory purposes”, to which reference is made. Unlisted equities are currently not subject to specific sensitivity analysis.

264 265 1.2.5 EXCHANGE RATE RISK

QUALITATIVE DISCLOSURES

A. General aspects, management and measurement of exchange rate risk

Exchange rate risk represents the risk associated with changes in the value of positions denominated in foreign currencies deriving from unexpected variations in the cross rates. Exchange rate risk is principally generated by the support provided for commercial activity in foreign currencies and by trading in foreign securities.

Automatic network systems interfaced with a single position–keeping system enable the Finance Department to monitor constantly, in real time, the currency flows that are processed instantane- ously on the interbank forex market. In addition, a specific unit within the Finance Department is responsible for managing on own account positions and products relating to the exchange derivatives needed to meet the various hedging requirements of Group customers.

A front office and control system (Murex) and an external pricing system (SuperDerivatives) assure the efficient management of spot, forward and option flows within the framework of specific limits set by the Board of Directors and the Finance Department.

B. Hedging of exchange rate risk

Hedging of exchange rate risk involves transactions that minimize currency exposure (purchase and sale of currency on the interbank market) and management of the derivatives book by delta hedging and managing the risk curves within precise limits.

266 267 QUANTITATIVE DISCLOSURES

1. Breakdown by currency of assets, liabilities and derivatives

Line items Currency US Sterling Japanese Canadian Swiss Other Dollars Yen Dollars Francs currencies

A. Financial assets 346,940 7,534 17,875 2,636 63,484 31,370 A.1 Debt securities 20,653 – – – – – A.2 Equities – – – – – 8,358 A.3 Loans to banks 18,705 2,269 3,508 2,230 39,550 11,796 A.4 Loans to customers 307,582 5,265 14,367 406 23,934 11,216 A.5 Other financial assets – – – – – –

B. Other assets 3,176 7,875 101 360 1,125 11,825 C. Financial liabilities (412,440) (19,749) (20,641) (2,989) (43,678) (68,115) C.1 Deposits from banks (273,574) (5,789) (17,522) (535) (42,088) (23,346) C.2 Due to customers (128,719) (6,716) (2,600) (2,444) (1,571) (4,290) C.3 Debt securities – – – – – (27,026) C.4 Other financial liabilities (10,147) (7,244) (519) (10) (19) (13,453)

D. Financial derivatives 62,363 5,895 5,260 1,091 (23,674) 40,117 – Options (33,609) (1,422) 6,271 1,061 – 10,550 – long positions 194,367 11,710 30,405 1,061 – 13,684 – short positions (227,976) (13,132) (24,134) – – (3,134) – Other derivatives 95,972 7,317 (1,011) 30 (23,674) 29,567 – long positions 431,145 14,553 68,086 269 500 30,561 – short positions (335,173) (7,236) (69,097) (239) (24,174) (994) Total assets 975,628 41,672 116,467 4,326 65,109 87,440

Total liabilities (975,589) (40,117) (113,872) (3,228) (67,852) (72,243)

Net balance (+/-) 39 1,555 2,595 1,098 (2,743) 15,197

2. Internal models and other methods of sensitivity analysis

The exchange rate risk generated by the trading book and the banking book is monitored using the VaR model described in detail in section 2.1 “Interest–rate risk–Trading book for supervisory purposes”, to which reference is made. With regard to the estimation of exchange–rate risk, reference is made to the tables included in the quantitative information for that section.

266 267 1.2.6 DERIVATIVE PRODUCTS

A. FINANCIAL DERIVATIVES

A.1 Trading book: period–end and average notional amounts

Type of transaction/Underlyings Debt securities Equities and Exchange rates and interest rates equity indices and gold Listed Unlisted Listed Unlisted Listed Unlisted

1. Forward rate agreements – – – – – – 2. Interest rate swaps – 29,267,452 – – – – 3. Domestic currency swaps – – – – – – 4. Currency interest rate swaps – – – – – 349,972 5. Basic swaps – 4,221,470 – – – – 6. Swap of stock indices – – – – – – 7. Swap of real indices – – – – – – 8. Futures 477,165 – – – – – 9. Cap options – 41,208,264 – – – – – purchased – 20,450,857 – – – – – issued – 20,757,407 – – – – 10. Floor options – 35,989,773 – – – – – purchased – 15,455,066 – – – – – issued – 20,534,707 – – – – 11. Other options – 2,547,950 – 710,280 – 1,443,169 – Purchased – 1,273,975 – 354,300 – 720,815 – Plain vanilla – 1,273,975 – 83,470 – 696,805 – Exotic – – – 270,830 – 24,010 – Issued – 1,273,975 – 355,980 – 722,354 – Plain vanilla – 1,273,975 – 85,150 – 720,269 – Exotic – – – 270,830 – 2,085 12. Forward contracts – 12,475 – – – 335,187 – Purchases – 12,062 – – – 113,374 – Sales – 413 – – – 187,829 – Currency against currency – – – – – 33,984 13. Other derivative contracts – – – – – –

Total 477,165 113,247,384 – 710,280 – 2,128,328

268 269 Type of transaction/Underlyings Other instruments 31/12/2007 31/12/2006 Listed Unlisted Listed Unlisted Listed Unlisted

1. Forward rate agreements – – – – – 5,000 2. Interest rate swaps – – – 29,267,452 – 28,451,558 3. Domestic currency swaps – – – – – – 4. Currency interest rate swaps – – – 349,972 – 789,407 5. Basic swaps – – – 4,221,470 – 3,939,777 6. Swap of stock indices – – – – – – 7. Swap of real indices – – – – – – 8. Futures – – 477,165 – – – 9. Cap options – – – 41,208,264 – 78,918,087 – purchased – – – 20,450,857 – 39,290,486 – issued – – – 20,757,407 – 39,627,601 10. Floor options – – – 35,989,773 – 47,923,462 – purchased – – – 15,455,066 – 20,339,382 – issued – – – 20,534,707 – 27,584,080 11. Other options – – – 4,701,399 – 6,590,728 – Purchased – – – 2,349,090 – 3,322,173 – Plain vanilla – – – 2,054,250 – 2,926,949 – Exotic – – – 294,840 – 395,224 – Issued – – – 2,352,309 – 3,268,555 – Plain vanilla – – – 2,079,394 – 2,895,463 – Exotic – – – 272,915 – 373,092 12. Forward contracts – – – 347,662 – 593,498 – Purchases – – – 125,436 – 323,756 – Sales – – – 188,242 – 195,060 – Currency against currency – – – 33,984 – 74,682 13. Other derivative contracts – – – – – –

Total – – 477,165 116,085,992 – 167,211,517

A.2 Banking book: period–end and average notional amounts

A.2.1 For hedging

The Group does not have any hedging derivatives. The related table is therefore not being presented.

268 269 A.2.2 Other derivatives

Type of transaction/Underlyings Debt securities Equities and Exchange rates and interest rates equity indices and gold Listed Unlisted Listed Unlisted Listed Unlisted

1. Forward rate agreements – – – – – – 2. Interest rate swaps – 1,889,549 – – – – 3. Domestic currency swaps – – – – – – 4. Currency interest rate swaps – – – – – 27,828 5. Basic swaps – 1,133,029 – – – – 6. Swap of stock indices – – – – – – 7. Swap of real indices – – – – – – 8. Futures – – – – – – 9. Cap options – 47,250 – – – – – purchased – 32,250 – – – – – issued – 15,000 – – – – 10. Floor options – 116,500 – – – – – purchased – 116,500 – – – – – issued – – – – – – 11. Other options – 10,900 – 59,563 – – – Purchased – 5,900 – 59,563 – – – Plain vanilla – 5,000 – – – – – Exotic – 900 – 59,563 – – – Issued – 5,000 – – – – – Plain vanilla – 5,000 – – – – – Exotic – – – – – – 12. Forward contracts – – – – – – – Purchases – – – – – – – Sales – – – – – – – Currency against currency – – – – – – 13. Other derivative contracts – – – – – –

Total – 3,197,228 – 59,563 – 27,828

270 271 Type of transaction/Underlyings Other instruments 31/12/2007 31/12/2006 Listed Unlisted Listed Unlisted Listed Unlisted

1. Forward rate agreement – – – – – – 2. Interest rate swap – – – 1.889.549 – 1.173.137 3. Domestic currency swap – – – – – – 4. Currency interest rate swap – – – 27.828 – – 5. Basic swap – – – 1.133.029 – 3.572.298 6. Swap of stock indices – – – – – – 7. Swap of real indices – – – – – – 8. Futures – – – – – – 9. Cap options – – – 47.250 – 66.750 – purchased – – – 32.250 – 51.750 – issued – – – 15.000 – 15.000 10. Floor options – – – 116.500 – 97.000 – purchased – – – 116.500 – 97.000 – issued – – – – – – 11. Other options – – – 70.463 – 10.000 – Purchased – – – 65.463 – 5.000 – Plain vanilla – – – 5.000 – 5.000 – Exotic – – – 60.463 – – – Issued – – – 5.000 – 5.000 – Plain vanilla – – – 5.000 – 5.000 – Exotic – – – – – – 12. Forward contracts – – – – – – – Purchases – – – – – – – Sales – – – – – – – Currency against currency – – – – – – 13. Other derivative contracts – – – – – –

Total – – – 3.284.619 – 4.919.185

270 271 A.3 Financial derivatives: purchase and sale of underlyings

Type of transaction/Underlyings Debt securities Equities and Exchange rates and interest rates equity indices and gold Listed Unlisted Listed Unlisted Listed Unlisted

A. Trading book 1. With exchange of capital – 60,456 – 31,600 – 2,128,328 – purchases – 36,060 – 15,800 – 902,422 – sales – 24,396 – 15,800 – 923,879 – currency against currency – – – – – 302,027 2. Without exchange of capital 477,165 108,965,458 – 678,680 – – – purchases 293,050 50,121,991 – 338,500 – – – sales 184,115 58,843,467 – 340,180 – – – currency against currency – – – – – – B. Banking book: B.1 Hedging 1. With exchange of capital – – – – – – – purchases – – – – – – – sales – – – – – – – currency against currency – – – – – – 2. Without exchange of capital – 188,412 – – – – – purchases – 168,912 – – – – – sales – 19,500 – – – – – currency against currency – – – – – – B.2 Other derivatives 1. With exchange of capital – – – – – 27,828 – purchases – – – – – 27,828 – sales – – – – – – – currency against currency – – – – – – 2. Without exchange of capital – 1,875,787 – 59,563 – – – purchases – 1,838,537 – 59,563 – – – sales – 37,250 – – – – – currency against currency – – – – – –

272 273 Type of transaction/Underlyings Other instruments 31/12/2007 31/12/2006 Listed Unlisted Listed Unlisted Listed Unlisted

A. Trading book 1. With exchange of capital – – – 2,220,384 – 4,513,968 – purchases – – – 954,282 – 1,825,793 – sales – – – 964,075 – 1,501,195 – currency against currency – – – 302,027 – 1,186,980 2. Without exchange of capital – – 477,165 109,644,138 – 158,689,914 – purchases – – 293,050 50,460,491 – 74,213,850 – sales – – 184,115 59,183,647 – 84,476,064 – currency against currency – – – – – – B. Banking book: B.1 Hedging 1. With exchange of capital – – – – – – – purchases – – – – – – – sales – – – – – – – currency against currency – – – – – – 2. Without exchange of capital – – – 188,412 – – – purchases – – – 168,912 – – – sales – – – 19,500 – – – currency against currency – – – – – – B.2 Other derivatives 1. With exchange of capital – – – 27,828 – – – purchases – – – 27,828 – – – sales – – – – – – – currency against currency – – – – – – 2. Without exchange of capital – – – 1,935,350 – 1,346,887 – purchases – – – 1,898,100 – 1,290,137 – sales – – – 37,250 – 56,750 – currency against currency – – – – – –

272 273 A.4 Over–the–counter financial derivatives: positive fair value–counterparty risk

Counterpart/Underlyings Debt securities and interest rates Equities and equity indices Exchange rates and gold Other instruments Different underlyings Gross Gross Future Gross Gross Future Gross Gross Future Gross Gross Future Offset Future not offset offset exposure not offset offset exposure not offset offset exposure not offset offset exposure exposure

A. Trading book for supervisory purposes A.1 Governments and central banks – – – – – – – – – – – – – – A.2 Public entities – – – – – – – – – – – – – – A.3 Banks 365,225 394,225 131,337 45,738 45,738 31,490 9,617 9,617 4,925 – – – – – A.4 Financial companies 33,233 33,233 12,412 – – – 5,975 5,975 2,772 – – – – – A.5 Insurance companies 13 13 26 – – – – – – – – – – – A.6 Non-financial institutions 140,425 140,425 47,324 2,401 2,401 948 6,582 6,582 1,678 – – – – – A.7 Other issuers 321 321 1 – – – 930 930 226 – – – – –

Total at 31/12/2007 539,217 568,217 191,100 48,139 48,139 32,438 23,104 23,104 9,601 – – – – –

Total at 31/12/2006 476,248 476,248 319,871 51,192 51,192 33,068 38,330 38,330 20,333 – – – – –

B. Banking book B.1 Governments and central banks – – – – – – – – – – – – – – B.2 Public entities – – – – – – – – – – – – – – B.3 Banks 41,587 41,587 7,367 – – – – – – – – – – – B.4 Financial companies 90 90 213 – – – – – – – – – – – B.5 Insurance companies – – – – – – – – – – – – – – B.6 Non-financial institutions – – – – – – – – – – – – – – B.7 Other issuers – – – – – – – – – – – – – –

Total at 31/12/2007 41,677 41,677 7,580 – – – – – – – – – – –

Total at 31/12/2006 49,229 49,229 3,381 – – – – – – – – – – –

274 275 A.5 Over–the–counter financial derivatives: negative fair value–financial risk

A. Trading book for supervisory purposes A.1 Governments and central banks – – – – – – – – – – – – – – A.2 Public entities – – – – – – – – – – – – – – A.3 Banks 446,434 26,362 42,611 14,502 – – 23,853 1,660 1,449 – – – – – A.4 Financial companies 43,924 38 5,241 2,264 – 6 6,841 – 906 – – – – – A.5 Insurance companies 180 – 22 31,419 – – – – – – – – – – A.6 Non-financial institutions 25,801 6,203 6,580 – – – 3,931 131 631 – – – – – A.7 Other issuers 17,802 5,123 15 – – – 639 45 171 – – – – –

Total at 31/12/2007 534,141 37,726 54,469 48,185 – 6 35,264 1,836 3,157 – – – – –

Total at 31/12/2006 531,517 531,517 55,947 50,810 50,810 – 36,526 36,526 7,987 – – – – –

B. Banking book B.1 Governments and central banks – – – – – – – – – – – – – – B.2 Public entities – – – – – – – – – – – – – – B.3 Banks 142,364 9,383 4,398 – – – – – – – – – – – B.4 Financial companies 565 – 125 – – – – – – – – – – – B.5 Insurance companies – – – – – – – – – – – – – – B.6 Non-financial institutions – – – – – – – – – – – – – – B.7 Other issuers – – – – – – – – – – – – – –

Total at 31/12/2007 142,929 9,383 4,523 – – – – – – – – – – –

Total at 31/12/2006 82,471 82,471 6,064 – – – – – – – – – – –

276 277 A.6 Residual life of over–the–counter financial derivatives: notional value

Underlyings/residual life Within 12 months 1 to 5 years Over 5 years 31/12/2007

A. Trading book for supervisory purposes 43,910,386 68,055,455 4,597,316 116,563,157 A.1 Financial derivatives on debt securities and interest rates 41,643,509 67,519,724 4,561,316 113,724,549 A.2 Financial derivatives on equities and equity indices 140,791 533,489 36,000 710,280 A.3 Financial derivatives on exchange rates and gold 2,126,086 2,242 – 2,128,328 A.4 Financial derivatives on other instruments – – – – B. Banking book 1,383,445 1,582,873 318,301 3,284,619 B.1 Financial derivatives on debt securities and interest rates – – – – B.2 Financial derivatives on equities and equity indices 1,383,445 1,495,482 318,301 3,197,228 B.3 Financial derivatives on exchange rates and gold – 59,563 – 59,563 B.4 Financial derivatives on other instruments – 27,828 – 27,828

Total at 31/12/2007 45,293,831 69,638,328 4,915,617 119,847,776

Total at 31/12/2006 54,332,086 112,879,904 4,964,220 172,176,210

278 279 SECTION 1.3 – LIQUIDITY RISK

QUALITATIVE DISCLOSURES

A. General aspects, management and measurement of liquidity risk

Liquidity risk is the risk of being unable to meet payment obligations caused by inability to obtain funding (funding liquidity risk) and/or the presence of restrictions on the ability to sell assets (market liquidity risk). This risk can also take the form of a loss relative to fair value deriving from a forced sale, or more generally, of a loss in terms of reputation or business opportunities.

Funding liquidity risk is incurred in banking activities when institutional counterparties with- draw their usual funding, or request a significantly higher return than in normal circumstances.

The Finance Department manages the Group’s liquidity risk by seeking to maintain the opti- mum balance between average maturities of lending and funding, and by diversifying positions by counterparty and agreed due date both over the counter and on the Interbank Deposits Mar- ket. In addition to usual banking treasury activities (daily monitoring of the Group’s liquidity and optimization of its short–term management), any medium and long–term imbalances are managed using appropriate policies established by the Finance and ALMS Committee.

As far as the management of liquidity risk is concerned, 2007 was a fairly tough year due to ten- sions on the money market and the Group’s financial obligations. The growing commitments to disburse funds, associated with the increase in the Group’s assets, produced a large negative cash balance, making it even more important to have a precise, diversified funding policy, involving a gradual shift towards longer dated interbank deposits and avoidance of any overnight positions of more than 500 million euro. Market liquidity risk was limited by gradually selling off most of the less readily marketable investments in the Parent Bank’s trading book.

Work was started towards the end of 2007 on examining asset securitizations, particularly RMBS (residential mortgage–backed securities) with the principal goal of making the loans eligible for lending repurchase agreements with the ECB (so–called own securitizations eligible for refinancing with the ECB). Such securitizations would allow assets to be financed at relatively competitive rates in situations of liquidity stress. The conduct of funding repurchase agreements with the ECB and with direct customers would help diversify the sources of funds relative to the interbank market, also in view of the recent injections of liquidity by the ECB through repo transactions.

In terms of measuring and managing liquidity risks, the system used for almost all of 2007 has now migrated to the ALMPro system by Prometeia with the purpose of having a tool capable of carrying out dynamic modelling by performing more realistic simulations under different scenarios (construction of a maturity ladder and stress testing). As part of this project, the specialists at Prometeia have been asked to estimate parameters for a specific model for sight items in order to have indications about their stickiness and volatility.

278 279 QUANTITATIVE DISCLOSURES

1. Breakdown of the residual contractual duration of financial assets and liabilities

Currency: EURO

Items/Time bands Sight 1 to 7 7 to 15 15 days to 1 to 3 3 to 6 6 to 12 1 to 5 Over 5 days days 1 month months months months years years

Cash assets A.1 Government securities – – 4,498 505 303 10,051 4,418 60,187 2,908 A.2 Listed debt securities 35 – 5,004 – 8,244 121,089 47,808 270,970 424,042 A.3 Other debt securities 2 – – 214 13,117 – 214 38,765 219,347 A.4 Mutual funds 78,876 – – – – – – – 15,422 A.5 Loans – Banks 646,494 71,625 211,247 815,204 26,890 74,454 3,021 37,217 1,202 – Customers 3,044,021 275,250 369,227 1,626,941 1,451,850 707,895 618,229 4,673,820 5,886,355

Cash liabilities B.1 Deposits – Banks (452,283) (514,445) (274,801) (899,999) (184,110) (77,680) – (284,012) – – Customers (8,572,905) (1,695) (1,281) (15,451) (16,638) (7,590) (12,815) (52,813) (24,425) B.2 Debt securities (25,175) (5,886) (18,437) (42,323) (158,230) (172,323) (655,082) (5,311,303) (1,814,412) B.3 Other liabilities (127,503) (247,734) (175,282) (336,991) (756,069) (11,652) (27,912) (11,799) (4,515)

Off-balance sheet transactions C.1 Financial derivatives with exchange of capital – long positions – 123,885 25,468 26,633 262,585 146,610 32,327 2,148 8,643 – short positions – (128,912) (47,334) (45,925) (347,785) (99,343) (13,839) (25,831) (8,678) C.2 Deposits and loans to be received – long positions – 113,000 3,004 3,804 15,373 6,962 – – – – short positions (142,143) – – – – – – – – C.3 Irrevocable commitments to make loans – long positions 196,787 65,000 – – – – – – – – short positions – (261,787) – – – – – – –

280 281 Currency: USD

Items/Time bands Sight 1 to 7 7 to 15 15 days to 1 to 3 3 to 6 6 to 12 1 to 5 Over 5 days days 1 month months months months years years

Cash assets A.1 Government securities – – – – – – – – – A.2 Listed debt securities – – – – – – – – – A.3 Other debt securities – – – – – – – – – A.4 Mutual funds – – – – – – – – – A.5 Loans – Banks 52,536 – – 115 8,818 – 384 – – – Customers 6,045 5,239 15,857 135,272 86,426 20,761 10,337 777 2,714

Cash liabilities B.1 Deposits – Banks (14,360) – – (13,938) (129,209) (19,927) (18,498) – – – Customers (114,857) (148) (201) (1,532) (9,381) (1,921) (680) – – B.2 Debt securities – – – – – – – – – B.3 Other liabilities – – – – (40,372) (11,179) (9,042) – (1,041)

Off-balance sheet transactions C.1 Financial derivatives with exchange of capital – long positions – 3,231 50,185 44,527 334,791 70,805 7,143 – 679 – short positions – (24,814) (28,244) (25,639) (263,446) (74,275) (23,674) (1,858) (679) C.2 Deposits and loans to be received – long positions – – – – – – – – – – short positions – – – – – – – – – C.3 Irrevocable commitments to make loans – long positions – – – – – 1,122 11 – – – short positions – (1,133) – (8,804) (59,723) (24,432) (21,190) – –

280 281 Currency: GBP

Items/Time bands Sight 1 to 7 7 to 15 15 days to 1 to 3 3 to 6 6 to 12 1 to 5 Over 5 days days 1 month months months months years years

Cash assets A.1 Government securities – – – – – – – – – A.2 Listed debt securities – – – – – – – – – A.3 Other debt securities – – – – – – – – – A.4 Mutual funds – – – – – – – – – A.5 Loans – Banks 2,269 – – – – – – – – – Customers 4,229 11 7 128 398 492 – – –

Cash liabilities B.1 Deposits – Banks (5,617) – – – – – – – – – Customers (6,469) – – – (89) – – – – B.2 Debt securities – – – – – – – – – B.3 Other liabilities – – – – – – – – –

Off-balance sheet transactions C.1 Financial derivatives with exchange of capital – long positions – 613 – – 12,612 13,331 – – – – short positions – (101) – (9,580) (5,247) (5,473) (409) – – C.2 Deposits and loans to be received – long positions – 4,364 – – – – – – – – short positions – (4,364) – – – – – – – C.3 Irrevocable commitments to make loans – long positions – – – – – – – – – – short positions – – – – – – – – –

282 283 Currency: CHF

Items/Time bands Sight 1 to 7 7 to 15 15 days to 1 to 3 3 to 6 6 to 12 1 to 5 Over 5 days days 1 month months months months years years

Cash assets A.1 Government securities – – – – – – – – – A.2 Listed debt securities – – – – – – – – – A.3 Other debt securities – – – – – – – – – A.4 Mutual funds – – – – – – – – – A.5 Loans – Banks 4,387 – 15,827 1,469 7,867 10,000 – – – – Customers 1,709 1,523 3,949 5,518 10,628 20,250 249 – 1,083

Cash liabilities B.1 Deposits – Banks (5,001) – (25,013) (1,469) (21,565) (10,000) – – – – Customers (1,526) – – – – – – – – B.2 Debt securities – – – – – – – – – B.3 Other liabilities – – – – – – – – –

Off-balance sheet transactions C.1 Financial derivatives with exchange of capital – long positions – 130 – 90 – 140 140 – – – short positions – (23,995) – (92) – (134) – – – C.2 Deposits and loans to be received – long positions – – – – – – – – – – short positions – – – – – – – – – C.3 Irrevocable commitments to make loans – long positions 130 – – – – – 229 – – – short positions – (359) – – – – – – –

282 283 Currency: JPY

Items/Time bands Sight 1 to 7 7 to 15 15 days to 1 to 3 3 to 6 6 to 12 1 to 5 Over 5 days days 1 month months months months years years

Cash assets A.1 Government securities – – – – – – – – – A.2 Listed debt securities – – – – – – – – – A.3 Other debt securities – – – – – – – – – A.4 Mutual funds – – – – – – – – – A.5 Loans – Banks 1,685 – – – 791 1,033 – – – – Customers 877 360 636 2,954 6,528 2,503 33 364 112

Cash liabilities B.1 Deposits – Banks (8,786) – (1,821) – (3,827) (3,462) – – – – Customers (2,060) (88) – – – (452) – – – B.2 Debt securities – – – – – – – – – B.3 Other liabilities – – – – – – – – –

Off-balance sheet transactions C.1 Financial derivatives with exchange of capital – long positions – 60,035 1,031 3,897 12,244 20,222 1,062 – – – short positions – (58,696) (1,194) (4,307) (6,054) (21,070) (1,910) – – C.2 Deposits and loans to be received – long positions – 6,669 – – – – – – – – short positions – (6,669) – – – – – – – C.3 Irrevocable commitments to make loans – long positions – – – – – 1 – – – – short positions – (1) – – – – – – –

284 285 Currency: Other currencies

Items/Time bands Sight 1 to 7 7 to 15 15 days to 1 to 3 3 to 6 6 to 12 1 to 5 Over 5 days days 1 month months months months years years

Cash assets A.1 Government securities – – – – – – – – – A.2 Listed debt securities – – – – – – – – – A.3 Other debt securities – – – – – – – – – A.4 Mutual funds – – – – – – – – – A.5 Loans – Banks 12,267 – – – – – – – – – Customers – – 70 4,230 7,267 22 – – –

Cash liabilities B.1 Deposits – Banks (19,767) (7,903) – – – – – – – – Customers (4,882) – – – (333) (877) – – – B.2 Debt securities – – – – – – – (27,026) – B.3 Other liabilities – – – – – – – – –

Off-balance sheet transactions C.1 Financial derivatives with exchange of capital – long positions – 153 1,013 14,078 2,205 248 45 27,829 – – short positions – (641) – (3,204) – (104) (45) – – C.2 Deposits and loans to be received – long positions – 5,591 – – – – – – – – short positions – (4,624) (967) – – – – – – C.3 Irrevocable commitments to make loans – long positions – 692 – – – – – – – – short positions – (692) – – – – – – –

284 285 2. Sector breakdown of financial liabilities

Exposures/Counterparts Governments Other Financial Insurance Non-financial Other and central banks public entities companies companies institutions parties

1. Due to customers 50,129 321,874 344,160 113,020 2,973,803 6,045,791 2. Debt securities in issue 5 10,150 33,092 173,299 165,230 2,315,867 3. Financial liabilities held for trading – – 46,997 31,599 10,040 33,284 4. Financial liabilities at fair value – 48,988 16,740 325,643 71,496 796,999

31/12/2007 50,134 381,012 440,989 643,561 3,220,569 9,191,941

31/12/2006 29,972 265,672 464,045 385,156 2,634,184 10,035,769

3. Geographical distribution of financial liabilities

Exposures/Counterparts ITALY OTHER EU AMERICA ASIA REST COUNTRIES OF THE WORLD

1. Due to customers 9,736,970 94,385 12,957 616 3,271 2. Deposits from banks 1,799,784 1,372,933 180 2,017 103,780 3. Debt securities in issue 2,421,204 3,162,531 11 – – 4. Financial liabilities held for trading 126,333 444,799 91,022 – – 5. Financial liabilities at fair value 1,544,804 1,001,172 – – –

31/12/2007 15,629,095 6,075,820 104,170 2,633 107,051

31/12/2006 14,913,215 4,121,329 87,397 9,281 6,946

286 287 1.4 – OPERATIONAL RISK

QUALITATIVE DISCLOSURES

A. General aspects, management and measurement of operational risk

Operational risk is defined as the risk of losses deriving from inadequate or dysfunctional procedures, human resources or internal systems, or external events. This includes legal risk, but not strategic risk or the risk to reputation.

The Internal Audit Department performed checks during the year to verify that operational risk is properly controlled. This activity is carried out on an ongoing basis, either periodically or when exceptions arise, both via on–site checks and the use of monitoring tools pursuant to the Supervisory Instructions.

The audit checks of processes in the operational/accounting area, the financial area and lending covered the operational risks associated with Human Resources (organization and management of work), Processes (efficiency and effectiveness of business procedures and processes, and the functioning of the system of internal controls), Physical Assets (security, controls over the risk of fraud and mal–practice) and Compliance (internal and external regulations).

The Network Line Controls manual was formalized in 2006 as far as line controls were concerned. This contains the first level controls already reflected in company processes, and other new controls considered useful for governing specific additional risks. All the network line controls are divided by individual process and function responsible for their conduct (from the area branch manager to the individual operator) and specify the frequency of control, the support tools and the related legislation/regulations. This initiative, currently being refined still further, will make it possible to improve the performance of first level controls and hence reduce the network’s operational risk.

With regard to the monitoring of operational risks, the Bank was a founding member in 2002 of DIPO, the interbank consortium promoted by ABI that maintains an Italian database of operational losses. As a consequence, the Group gathers regular information about its operational losses.

Lastly in this area, the Group commenced an “ORM” (Operational Risk Management) project during the first half of 2006 as part of alignment with the Basel II requirements.

The new Basel 2 accord establishes capital adequacy requirements for banks with regard to credit risk, market risk and, for the first time, operational risk. With regard to this last risk, there are three possible approaches of increasing complexity:

– BIA – Basic Standard Approach: this involves the application of a fixed coefficient of 15% to the average of net interest and other banking income over the last three years. – TSA – Traditional Standardized Approach: this involves the application of fixed coefficients to net interest and other banking income for the last three years deriving from the various lines of business envisaged in the New Capital Accord. This approach also and more especially envisages the creation of an integrated framework for the recording, management and measurement of operational risks, imposing on banks a tight series of organizational requirements. – AMA – Advanced Measurement Approach: this applies the organizational model for the recording, management and measurement of operational risks adopted by the standardized approach, but on an even more stringent basis which allows banks to adopt internal models for calculating the related capital adequacy requirements.

286 287 The Operational Risk Management project, organized into four modules is intended to define an framework for the measurement and management of Operational Risks that is consistent with the requirements of Basel 2, while also working towards alignment with the requirements of the standardized approach.

Various stages in this project have already been completed: “Classification Models and Risk Mapping”, “Policies for and Governance of Operational Risk Management” and “Self Risk As- sessment”. This last stage included the direct involvement of managers from the Departments subject to Operational Risks and the Area offices, who took part in a top–down analysis of risks by completing a detailed questionnaire designed to gather quali–quantitative information useful for the management of risk. The fourth and final stage of the project, whose organizational implications were reviewed in the first half of 2007, was intended to define and develop a structured process for Loss Data Collection in place of the current process used to provide information to the DIPO consortium. This work was completed at the end of October 2007 with the publication of the “Operational Risks Manual – Loss Data Collection”.

The same work will be carried out in 2008 at a local level for Banca Nuova and Cassa di Ris- parmio di Prato, so that operational risks are managed throughout the Group.

QUANTITATIVE DISCLOSURES

The Group continued to gather data on operational losses for reporting to DIPO, which was more complete thanks to the more structured approach used after adopting the manual. The information gathered was not only more accurate, but also contained details of events not previously considered, such as those associated with “employment practices and workplace safety”. Banca Nuova and Cariprato carried on gathering information in the previous way, until such time as they also adopt the procedures and processes already used by the Parent Bank (see pre- ceding paragraph).

In particular, 68 events arose in 2007 resulting in losses or provision for losses, totaling 5.758 million euro. Of these new events, 47% (32 in total) were caused by “external fraud” (42.4% in value terms, including all the robberies during the year), 19% by “customers, products and business practice” (7.5% in value terms), 13.2% by errors in “execution, delivery and process management” (2% in value terms), 8.8% by “employment practices and workplace safety” (30% in value terms), 7.35% by “damage to physical assets” (4.7% in value terms), and 4.41% (3 events) by “internal fraud” (12.9% in value terms).

Events are analyzed by line of business as well as by type. These lines of business are the same as those envisaged in the New Capital Accord (Basel 2). In particular: – “retail banking” includes the losses deriving from customers served operationally by the Pri- vate Banking or Retail businesses; – “retail intermediation” includes the operational losses incurred on security instructions from retail customers that were handled incorrectly; – “trading and sale” includes the operational losses incurred on security instructions from corporate customers that were handled incorrectly; – “commercial banking” includes the operational losses attributable to the corporate segment.

In 2007, 72% of loss events related to the retail business (64.6% in value terms), 14.7% to trading and sale (6.7% in value terms), 7.3% to retail intermediation (4% in value terms) and 5.88% to commercial banking (24.5% in value terms).

288 289 SECTION 2

Risks pertaining to insurance activities

2.1 INSURANCE RISKS

QUALITATIVE DISCLOSURES

Insurance risk derives from changes in the timing, frequency and severity of insured events with respect to the forecasts made by the insurer at the time of signing the contracts.

The Banca Popolare di Vicenza Group included two insurance companies until the summer of 2007: Vicenza Life, an Irish company, and Berica Vita SpA. The activities of the first were limited to section III (unit and index–linked life assurance), while those of the second included section I (life expectancy) and section V (capital accumulation). The agreement between Banca Popolare di Vicenza and Cattolica Assicurazioni has involved Cattolica acquiring on 5 September 2007 50% of Berica Vita for 20.9 million euro (valuing the company at 41.8 million euro) and 50% of Vicenza Life for 23.2 million euro (valuing the company at 46.4 million euro). As a result, both Berica Vita S.p.A. and Vicenza Life have been equity accounted at 31 December 2007.

With regard to loss cover, the agreement required BPVI to acquire 50% of ABC Assicura, the Cattolica Group’s loss insurer, for 5.2 million euro (valuing the company at 10.4 million euro).

Further to these transactions, the following paragraph refers solely to the situation up until Au- gust 2007.

Vicenza Life only operates in section III (Unit Linked and Index Linked) and does not directly accept insurance risks, except for the residual element of death cover. In particular, the company does not accept risks of this kind exceeding 20,000 euro, while for amounts over 10,000 euro the risk is reinsured with leading life insurance companies.

The situation regarding Berica Vita is more complex, since the following insurance risks are accepted: i) acceptance risk: the events covered in relation to products subject to revaluation, in both sections I and V, are low profile and the acceptance risk is suitably covered by the adoption of highly standardized processes. With regard to the coverage of pure risk, this is suitably assessed via the adoption of an appropriate pricing policy and a policy of reinsurance to limit the company’s exposure. In particular, the company has had recourse to reinsurance for the policies launched in January 2006 that cover death and total and permanent disability on a sliding scale. Given the relatively brief experience of the company in the placement of this cover, a prudent approach was adopted by determining that the capital at risk for each contract must not exceed 20,000.00 euro. This objective was achieved by signing “reinsurance agreements for higher cover” with leading insurance companies deemed to be financially very sound by leading rating agencies, in order to limit as far as possible the risk of counterparty insolvency. ii) reservation risk: this risk is currently small. The technical reserves are adequate in relation to commitments, as reflected by the level of the minimum returns guaranteed for products subject to revaluation, the use of the latest techniques for the pricing of pure risk products, and the absence of annuities.

288 289 2.1 FINANCIAL RISK

QUALITATIVE DISCLOSURES

With regard to Vicenza Life, the market risk is borne entirely by the holders of the Unit Linked and Index Linked policies; accordingly, the company’s exposure is not significant and limited to the early death of the holders of policies that envisage a payout on death. This risk is contained by limiting the age range within which this clause applies, and by reinsuring the death cover offered by these policies with leading insurance companies.

The situation is more complex with regard to Berica Vita, which distributes both index linked and traditional products. In the first case, the benefits on maturity are determined by the yield from the underlying financial assets over the contract period. The related market risk (performance) is essentially borne by the policyholders. In the case of traditional products, whose revaluation is linked to the performance of the separately–managed Bericapital, the risk of losses due to changes in the financial markets reflects the need to maintain an adequate level of assets, as well as the impact of the minimum guaranteed return envisaged.

In order to manage these risks, the company: i) establishes revaluation rates that are consistent with the current rate structure for the products offering a minimum guaranteed return, from the time such products are devised. ii) avoids exchange risk by using assets denominated in euro. iii) manages the investment in equities such that they generally represent less than 10% of the assets of the separate fund, considering a time horizon of one year. iv) manages the investment in bonds, the predominant component, to ensure that the duration of the portfolio reflects that of the related liabilities. Preference is given to investment in government securities or the listed securities of supranational bodies, while the corporate element of the portfolio–reviewed periodically having regard for changes in the premium at risk–is mainly invested in listed securities with a rating (determined by the investment committee) of not less than A–. This approach contains both the credit risk and the liquidity risk, since the assets held are readily marketable.

The company’s free capital is generally invested in bonds or the units of mutual funds invested in bonds or, without exceeding 30% of the total, equities. The company’s organization fund is kept liquid. The effectiveness of the policies adopted for the management of market risk is monitored constantly by measuring the risks affecting the company’s portfolio (volatility and ex ante VaR) and analyzing the stress tests to check the impact on the portfolio of adverse changes in the risk factors.

With regard to credit risk, both companies follow strict rules on the type of investment allowed. Berica Vita mainly invests in government securities or the listed securities of supranational bodies, while the corporate element of the portfolio–reviewed periodically having regard for changes in the premium at risk–is mainly invested in listed securities with a rating (determined by the investment committee) of not less than A–. Similarly, Vicenza Life only invests in counterparties with a rating of at least A– or A3 at the date of purchase.

These rules do not prevent investment in assets with a lower rating, on condition that these are approved by the Board of Directors.

Both companies cover liquidity risk by investing in listed bonds that are readily saleable in the market.

290 291 The credit risk involved in relations with reinsurers is covered up front, as part of the process of selecting the insurance companies with which to sign contracts; this process favors leading companies. The credit risk in relation to intermediaries is extremely limited, given that the distribution network consists of the branches of the Group’s banks.

2.3 OTHER RISKS

These mainly comprise operational risks, involving all those risks attributable to weaknesses or errors in internal processes, human resources and systems, or external events, which are not included in other categories. The situation with regard to these risks must be assessed having regard for the nature of the organizational model adopted by Group companies. In particular, given a slim structure focused on the essentials and significant recourse to the outsourcing of operational activities, some of these risks–whether direct or indirect–are mitigated or transferred by the procedures agreed with the outsourcers.

290 291 SECTION 3

Risks pertaining to other businesses

This section is not used.

292 293 Part F CAPITAL

SECTION 1

Consolidated capital

A. QUALITATIVE DISCLOSURES

Definition of consolidated capital

The definition of consolidated capital used by the Group corresponds to the sum of the following equity accounts: 140 “Valuation reserves”, 150 “Redeemable shares”, 160 “Equity instruments”, 170 “Reserves”, 180 “Additional paid–in capital”, 190 “Capital”, 200 “Treasury shares” and 220 “Net income (loss) for the year”.

Nature of the capital adequacy requirement

Since the Banking Group carries out lending activities, it is subject to the requirements of arts. 29 et seq. of Decree 385 dated 1 September 1993 “Consolidated law on banking and lending” or “TUB”. Accordingly, the Group must comply with the capital adequacy requirements detailed in the above legislation.

Management of capital

Information about the way in which the Group pursues its capital management objectives is provided in section 2.2 below.

B. QUANTITATIVE DISCLOSURES

Quantitative information is provided in Part B, Liabilities Section 15 – “Group equity” of these explanatory notes.

292 293 SECTION 2

Regulatory capital and capital adequacy ratios

2.1 Scope of application of the regulations

The calculation of consolidated regulatory capital applies the consolidation methodology envisaged in Bank of Italy Circular 155 – “Instructions for reporting capital for supervisory purposes and prudential parameters” (12th revision dated February 2008). In particular, this involves: • line–by–line consolidation of the banking, financial and related companies within the banking group; • proportional consolidation of the banking, financial and related companies in which the banking group holds an interest of 20% or more, when such companies are “jointly controlled” together with other parties under agreements with them; • application of the equity method for: a. other banking and financial companies in which the banking group holds an interest of 20% or more, or which in any case are subject to “significant influence”; b. companies, other than banking, financial and related companies, that are directly or jointly controlled by the banking group, or subject to significant influence. Accordingly, the scope of consolidation for the calculation of regulatory capital and capital adequacy is different to that used for the consolidated financial statements. The difference particularly relates to consolidation of the Linea Group on a “proportional” basis, rather than by using the “equity” method.

2.2 Regulatory capital of banks

QUALITATIVE DISCLOSURES

1. Tier 1 capital

Tier 1 capital comprises total equity pertaining to the group and minority interests (capital stock, additional paid–in capital, other equity reserves and the related allocation of 2007 net income to reserves) calculated on the basis of current legislation, less any intangible assets. “Prudential filters” make corrections to equity in order to safeguard the quality of regulatory capital and reduce the potential volatility deriving from the application of IFRS. These involve deducting from Tier 1 capital the net negative fair value reserves accumulated in relation to debt securities, equities and mutual funds classified as “Financial assets available for sale”, forward purchase commitments of assets not computable in Tier 1 capital and accumulated net gains on property, plant and equipment and subordinated liabilities computable in Tier 2 capital. Tier 1 capital as of 31 December 2007 does not include any innovative or other capital instruments.

294 295 2. Tier 2 capital

Tier 2 capital essentially comprises the special revaluation reserves recorded in relation to property, plant and equipment and the subordinated liabilities issued, to the extent allowed by the regulations. The “prudential filters” include the add–back of 50% of the accumulated net gains on property, plant and equipment.

The principal contractual characteristics of the subordinated loans included in Tier 2 capital are presented below, together with the portion included in this capital:

Isin code Issue date Maturity Rate Interest rate Nominal value Portion included in Tier 2 capital

IT0003444574 02/05/2003 02/05/2009 Fixed 4.25% 8,285 8,285 IT0003631659 23/03/2004 23/03/2011 Fixed 4.05% 9,995 8,000 IT0003631642 02/04/2004 02/04/2009 Fixed 3.64% 24,875 10,000 IT0003662498 21/05/2004 21/05/2010 Fixed 3.95% 24,956 15,000 IT0003699649 16/08/2004 16/08/2010 Fixed 4.10% 14,988 9,000 IT0003748511 30/11/2004 30/11/2011 Fixed 3.49% 49,874 40,000 XS0210870415 03/02/2005 03/02/2015 Floating Euribor 3m + 0.45 200,000 199,800 IT0004189343 30/07/2007 30/07/2015 Fixed 2.15% 250,259 250,259 XS0336683254 20/12/2007 20/12/2017 Floating Euribor 3m + 2.35 200,000 199,500 IT0003782684 15/12/2004 15/12/2011 Fixed 4.18% 20,000 16,000 IT0004015746 21/02/2006 21/02/2012 Fixed 3.779% 40,000 39,970 IT0001398392 30/11/1999 30/11/2009 Floating Euribor 6m + 0.60 3,152 3,152

Total 846,384 798,966 All the above subordinated bonds have an early redemption clause that allows the Parent Bank to redeem them early, not less than 18 months after the final date of placement, following prior authorization from the Bank of Italy and giving at least one month’s notice. Furthermore, all the above bonds contain a subordination clause whereby, if the Parent Bank were to be wound up, they would be redeemed only after all other creditors, not subordinated to the same extent, have been satisfied. The subordinated liabilities not computed in Tier 2 capital because they exceed the 50% limit of “Tier 1 capital before deductions”, amount to 25,762 euro. These have been included in capital elements forming part of Tier 3 capital and used for covering the capital requirements for market risks. Tier 2 capital does not include any hybrid debt capital instruments at 31 December 2007.

“Deductions” from regulatory capital, consisting of the equity investments in banking, financial and insurance companies held by the Bank, are deducted in accordance with the rules set out in Circular 263 of 27 December 2006 (2nd revision dated 17 March 2008) and in Circular 155 of 18 December 1991 (12th revision dated 5 February 2008). In particular, 50% of the above equity investments are deducted from Tier 1 capital and 50% from Tier 2 capital, except for the equity investments in insurance companies purchased before 20 July 2006, the full amount of which is deducted from both Tier 1 and 2 capital.

3. Tier 3 capital

The Group’s Tier 3 capital at 31 December 2007 includes the portion of Tier 2 subordinated liabilities not computed in Tier 2 capital because it exceeded 50% of “Tier 1 capital before deductions”, and is used to cover the capital requirements for market risks.

294 295 B. QUANTITATIVE DISCLOSURES

31/12/2007 31/12/2006

A. Tier 1 before the application of prudential filters 1,635,688 1,610,340

B. Prudential filters of Tier 1 capital (89,281) (2,080) B.1 Positive IFRS prudential filters (+) – – B.2 Negative IFRS prudential filters (-) (89,281) (2,080) C. Tier 1 capital after the application of prudential filters 1,546,407 1,608,260 D. Deductions from Tier 1 capital (16,796) –

E. Total Tier 1 capital 1,529,611 1,608,260

F. Tier 2 capital before the application of prudential filters 922,723 719,200 G. Prudential filters for Tier 2 capital 811 (5,065) G.1 Positive IFRS prudential filters (+) 811 669 G.2 Negative IFRS prudential filters (-) – (5,734) H. Tier 2 capital after the application of prudential filters 923,534 714,135 I. Deductions from Tier 2 capital (16,796) –

L. Total Tier 2 capital 906,738 714,135

M. Deductions from Tier 1 and Tier 2 capital (29,442) (74,214)

N. Regulatory capital 2,406,907 2,248,181

O. Tier 3 capital 25,762 –

P. Regulatory capital including Tier 3 capital 2,432,669 2,248,181

2.3 Capital adequacy

A. Qualitative disclosures

The capital management policies adopted by the Banca Popolare di Vicenza Group are intended to ensure that Tier 1 capital is consistent with the overall level of risk accepted and the plans for the expansion of the Group, as well as to optimize the composition of capital by recourse to various financial instruments that minimize the related cost.

296 297 B. Quantitative disclosures

Categories/Amounts Unweighted amounts Weighted amounts/requirements 31/12/2007 31/12/2006 31/12/2007 31/12/2006

A. Risks assets A.1 Credit risk 44,426,264 40,107,037 21,075,139 17,445,853 Standard methodology CASH ASSETS 1. Exposures (other than equities and other subordinated assets) to (or guaranteed by): 18,648,087 15,676,794 17,362,701 14,210,872 1.1 Governments and central banks 334,634 370,189 – – 1.2 Public entities 59,278 55,190 11,883 11,038 1.3 Banks 1,148,026 1,325,278 244,669 273,697 1.4 Other parties (other than mortgage loans on residential and non-residential buildings) 17,106,149 13,926,137 17,106,149 13,926,137 2. Mortgage loans on residential buildings 3,573,684 2,546,520 1,786,842 1,273,259 3. Mortgage loans on non-residential buildings – – – – 4. Shares, equity investments and subordinated assets 376,042 139,448 383,487 142,280 5. Other cash assets 984,716 772,292 633,500 419,442 OFF-BALANCE SHEET ASSETS 1. Guarantees and commitments to (or guaranteed by): 16,481,200 15,335,339 895,055 1,383,914 1.1 Governments and central banks 1,802 36,498 145 – 1.2 Public entities 370,875 522,706 1,719 1,251 1.3 Banks 1,600,410 1,814,916 5,676 36,037 1.4 Other parties 14,508,113 12,961,219 887,515 1,346,626 2. Derivative contracts with (or guaranteed by): 4,362,535 5,636,644 13,554 16,086 2.1 Governments and central banks – – – – 2.1 Public entities – – – – 2.3 Banks 4,362,535 5,636,644 13,554 16,086 2.4 Other parties – – – – B. Capital adequacy requirements B.1 Credit risk – 1,686,011 1,395,668 B.2 Market risks1 – 263,576 222,347 1 STANDARD METHODOLOGY x x 263,576 222,347 of which: + position risk on debt securities x x 212,386 163,096 + position risk on equities x x 2,691 12,487 + exchange risk x x 5,103 13,372 + other risks x x 43,396 33,392 2. INTERNAL MODELS x x – – of which: + position risk on debt securities x x – – + position risk on equities x x – – + exchange risk x x – – B.3 Other prudential requirements x x 104,136 122,058 B.4 Total prudential requirements (B1+B2+B3) x x 2,053,723 1,740,073 C. Risk assets and capital ratios x x C.1 Risk-weighted assets x x 25,671,541 21,750,916 C.2 Tier 1 capital / Risk-weighted assets (Tier 1 capital ratio) x x 5.96% 7.39% C.3 Regulatory capital / Risk-weighted assets (Total capital ratio) x x 9.38% 10.34%

1 before Tier 3 capital elements eligible for covering these risks.

296 297 The total capital ratio, including Tier 3 capital in the numerator, is 9.48%. The overall capital adequacy ratio, relating to credit risk alone, is 11.42% compared with a minimum requirement of 8%. The capital adequacy ratio determined with reference to Tier 1 capital is 7.26%.

The Supervisory Authorities issued an order on 9 October 2007 requiring the Group to increase its capital requirement for market risks; this has involved doubling the weightings currently used for counterparty risk forming part of market risks. The higher requirement amounts to 17,001 euro.

298 299 Part G BUSINESS COMBINATIONS

1.1 Business combinations

Details of business combinations are provided below in accordance with paras. 66.a, 67.a.b.c, 68 and 70 of IFRS 3.

Business units comprising 61 bank branches belonging to the UBI Banca Group

The branches acquired on 31 December 2007 (11 branches from Banca Popolare di Bergamo, 32 from Banco di Brescia and 18 from Banca Popolare Commercio e Industria) are located in the provinces of Brescia (37)and Bergamo (24) and reported total loans and deposits of 2,050 million euro at 31 December 2007, of which 470 million euro in direct deposits, 892 million euro in indirect deposits and 688 million euro in loans.

The overall balance sheet of the business units acquired is summarized below:

Situation as of 31 December 2007

Assets purchased: Liabilities purchased: – Cash and balances with central banks € 6,647 – Due to customers € 468,366 – Loans and advances to customers € 687,502 – Debt securities in issue € 1,287 – Property, plant and equipment € 3,873 – Severance indemnities € 3,191 – Other assets € 2,640 – Other liabilities € 53,906

Total assets € 700,662 Total liabilities € 526,750

Net balance € 173,912 The balance sheet reports total assets, excluding the purchased goodwill, of 700,662 euro compared with total liabilities of 526,750 euro, giving a net difference of 173,912 euro. Goodwill has been provisionally calculated as 469,215 euro, plus 2,000 euro for the implied higher value of the buildings acquired.

The above balance sheet figures, like the goodwill, should be treated as provisional because, at the date of approving the Parent Bank’s draft financial statements for 2007, the period established under contract for approving or disputing the acquisition balance sheet and for determining goodwill was still in progress.

The value recognized for this goodwill will be tested in accordance with IAS 36 at the next balance sheet date. There was no evidence of any impairment losses at 31 December 2007.

UBI Banca used the services of Rothschild as its financial advisor in this transaction and of Stu- dio Chiomenti as its legal advisor, while Banca Popolare di Vicenza used the services of Morgan Stanley as its financial advisor and of Studio Legale Bonelli, Erede, Pappalardo as its legal advisor.

298 299 Farbanca SpA

On 12 July 2007 the Parent Bank BPVi acquired 552,000 ordinary shares in Farbanca SpA from Cassa di Risparmio di Cento S.p.A. (19.33% of capital stock) and 545,948 ordinary shares from Intesa Sanpaolo SpA (19.33% of capital stock). In subsequent months the Parent Bank acquired another 241,757 shares from minority stockholders (8.78% of capital stock) for 22,841 euro (inclusive of related costs such as professional fees, reports and appraisals etc.). On 26 July 2007 the stockholders’ meeting of Farbanca S.p.A. approved the necessary changes to the articles of association, as authorized by the competent supervisory body, allowing Banca Popolare di Vicen- za to take over from Intesa Sanpaolo as the parent company of Farbanca SpA. Key figures from the company’s financial statements at 31 December 2006, the latest ones approved by its stockholders, are presented below.

(in thousands of Euro) 31/12/2006

Net interest income 5,171 Net interest and other banking income 5,693 Net income from financial activities 5,135 Net income (loss) for the year 1,032 Net loans 174,531 Direct deposits 59,016 Indirect deposits 26,898 Net interbank position (77,946) Total assets 194,755 Equity (including net profit) 34,953

Verona Gestioni SGR SpA

As part of the partnership agreement between Cattolica Assicurazioni and the Banca Popolare di Vicenza Group, involving an innovative model of cooperation and development, the Par- ent Bank acquired 3,000 shares in Verona Gestioni SGR on 5 September 2007 (50% of capital stock) for 20,612 euro (inclusive of related costs such as professional fees, reports and appraisals etc.). Key figures from the company’s financial statements at 31 December 2006, the latest ones approved by its stockholders, are presented below.

(in thousands of Euro) 31/12/2006

Net interest and other banking income 5,863 Net profit from operating activities 2,947 Net income (loss) for the year 1,783 Total assets 9,845 Equity (including net profit) 7,939 Assets under management 3,213,148

300 301 Part H RELATED–PARTY TRANSACTIONS

1. Information on the remuneration of directors and managers

The following table reports the remuneration paid to key management personnel in 2007.

Key management personnel

a) Short-term benefits 7,612 b) Post-employment benefits 589 c) Other long-term benefits – d) Indemnities due on termination of employment 350 e) Share-based payments 204

Total 8,755 Key management personnel comprise members of General Management , as defined in the Par- ent Bank’s articles of association, as well as its directors and serving statutory auditors.

The remuneration categories included in the above table comprise: a) Short–term benefits: this includes: I) for General Management: wages, salaries and related social security contributions, payment in lieu of vacation and sick leave, incentives and benefits in kinds, such as medical assistance, housing, company cars and goods and services provided free or at reduced cost; II) for Directors and Statutory Auditors: attendance fees, remuneration for the performance of their duties (including for similar offices held in Group companies), and, solely in relation to the directors, their share of 2006 net income; b) Post–employment benefits: these include the Group’s contributions to pension funds (pension and retirement plans, life assurance and health care subsequent to termination) and the provision for severance indemnities recorded on the basis required by law and in–house agreements; c) Other long–term benefits: there are no other long–term benefits worthy of mention (such as leave of absence or sabbaticals related to length of service, bonuses linked to anniversaries, other benefits linked with length of service, disability benefits and, if due more than twelve months after the balance sheet date, profit share, incentives and deferred remuneration); d) Indemnities due on termination of employment: these include the amounts paid for early termination prior to pensionable age, incentives for voluntary redundancy and incentives for early retirement; e) Share–based payments: these include the cost of shares granted on achieving a certain length of service or specific objectives.

300 301 2. Information on related–party transactions

“Related–party transactions” are defined as all transactions with parties defined as such in IAS 24.

More specifically, with reference to the organization and governance of the Group, the following parties are deemed to be “related parties”: – companies under joint control: companies over which the Group exercises joint control, whether directly or indirectly; – associated companies: companies over which the Group exercises significant influence, whether directly or indirectly; – key management personnel, being the General Management team of the Parent Bank, as defined in its articles of association, and its directors and statutory auditors; – “close family” of key management personnel; – companies controlled by, jointly controlled by or associated with key management personnel or their close family; – parties that manage pension plans for the Group’s employees and any other parties related to the Group.

“Close family” are deemed to be: (a) companion and children of the related party; (b) children of the companion; (c) persons in the care of the related party or their companion.

The following tables summarize the balances and transactions with related parties during the year and their impact on cash flow, according to their classification at 31 December 2007.

Balance sheet

Related parties Loans Loans Other Deposits Due Other Guarantees and and assers1 from banks to liabilities2 and advances advances customers commitments to banks to customers

– Associated companies – 29,618 5 – 38,360 534,174 4,823 – Companies under joint control – 547,495 121 – – 418 8,016 – Key management personnel – 2,018 – – 4,929 1,328 485 – Other related parties3 – 60,022 14 – 10,381 38,061 7,624

Total – 639,153 140 – 53,670 573,981 20,948

Total reported in balance sheet 1,988,830 20,891,458 2,127,154 3,278,694 11,479,359 8,791,876 4,355,168 % incidence 0.00% 3.06% 0.01% 0.00% 0.47% 6.53% 0.48%

1 Asset line items 20, 30 and 40 from the consolidated balance sheet. 2 Liability line items 30, 40 and 50 from the consolidated balance sheet. 3 Include the close family of key management personnel of the Parent Bank, companies controlled by, jointly controlled by or associated with key management personnel or their close family, and parties that manage pension plans for the Group’s employees and any other parties related to the Group.

302 303 Income statement

Related parties Interest Interest Net fee and Other income expense commission costs/other income revenue 1

– Associated companies 572 (8,327) 13,617 (45,669) – Companies under joint control 11,219 – 9,969 – – Key management personnel 53 (84) 42 (8,755) – Other related parties2 1,669 (134) 98 (43)

Total 13,513 (8,545) 23,726 (54,466)

Total reported in income statement 1,256,160 (666,324) 265,416 (526,353) % incidence 1.08% 1.28% 8.94% 10.35%

1 Line items 180 and 220 from the consolidated income statement. They include the remuneration paid to key management personnel of the Parent Bank. 2 Include the close family of key management personnel, companies controlled by, jointly controlled by or associated with key management personnel or their close family, and parties that manage pension plans for the Group’s employees and any other parties related to the Group.

Cash flows

Cash flows 31 December 2007

Loans and advances to customers (363,646) Other assets1 61,235

Total cash flows with related parties (302,411)

Total liquidity absorbed by financial assets (3,547,110) % incidence 8.53%

1 Asset line items 20, 30 and 40 from the consolidated balance sheet.

Cash flows 31 December 2007

Due to customers 29,725 Other liabilities2 572,227

Total cash flows with related parties 601,952

Total liquidity generated by financial liabilities 3,254,230 % incidence 18.50%

2 Liability line items 30,40 and 50 from the consolidated balance sheet.

302 303 Cash flows 31 December 2007

Interest income and similar revenues 13,513 Interest expense and similar charges (8,545) Net fee and commission income 23,726 Other income / other costs 1 (54,466)

Total cash flows with related parties (25,772)

Total cash flow from operations 427,289 % incidence -6.03%

1 Line items 180 and 220 from the consolidated income statement.

3. Corporate disclosures by listed issuers and issuers whose financial instruments are held by the general public pursuant to art. 116 of the TUF-Requirements pursuant to art. 114.5 of Decree 58/98

CONSOB Communication 6064293 dated 28 July 2006 regarding “Corporate disclosures by listed issuers and issuers whose financial instruments are held by the general public pursuant to art. 116 of the TUF-Requirements pursuant to art. 114.5 of Decree 58/98”, requires all listed companies and issuers of securities held by the public to provide detailed disclosures in their explanatory notes and report on operations regarding: related–party transactions, significant and non–recurring events and operations, and positions and transactions deriving from atypical and/or unusual transactions.

In order to comply with the above CONSOB Communication, on 23 January 2007 the Board of Directors of the Parent Bank approved the “Regulations for reporting information about: transactions with related parties, significant and non–recurring transactions and atypical and/or unusual transactions”.

These Regulations bring together all the rules applied by Banca Popolare di Vicenza S.C.p.A. and its subsidiaries to identify transactions with related parties, significant and non–recurring transactions and atypical and/or unusual transactions, defining quantitative/qualitative criteria for the identification of such transactions for the purposes of reporting them in the financial statements pursuant to the CONSOB communication referred to above.

In order to define the operational rules applying within the Group, to ensure implementation of the instructions contained in the above Regulations, a Manual has been prepared to clarify how to identify related parties, significant and non–recurring transactions and atypical and/or unusual transactions, and to establish the responsibilities for and controls over such activities.

The definitions and qualitative/quantitative criteria set out in the Regulations for the identification of the above transactions are presented below.

Related–party transactions The definition of “related parties” is included in the earlier point entitled 2 “Information on related–party transactions”.

304 305 Significant and non–recurring transactions “Significant and non–recurring” transactions are defined as all transactions that are not repeated frequently in the ordinary course of the Group’s activities and whose balance sheet and/or economic value exceeds a certain threshold of significance. In particular: – Significant transactions: Transactions whose balance sheet and/or economic value exceeds at least one of the following parameters: • 1% of Group equity, as reported in the latest consolidated financial statements; • 4% of the Group’s net income for the year, as reported in the latest consolidated financial statements.

For the purposes of the above calculation, each transaction must be considered separately; if transactions are strictly and objectively related as part of the same strategic or operational plan, the calculation must refer to all the related transactions taken together.

If no consideration is agreed for a transaction, its “normal value” must be determined before- hand to reflect the price at which the transaction would have taken place between independent parties on arms’–length terms. Standard funding, lending and investment activities conducted on normal market terms are not reported as significant transactions.

– Non–recurring transactions: Transactions that are not repeated frequently in the ordinary course of the Group’s activities. The frequency of transactions must also be assessed with reference to prior years as well as to the current year.

Atypical and/or unusual transactions These are defined as all significant transactions, as defined above, which due to the nature of the counterparties, the purpose of the transaction, the method of determining the transfer price or the timing of the event (close to the accounting reference date) may give rise to doubts about the correctness/completeness of the information reported in the financial statements, possible conflicts of interest, the safeguarding of assets or the protection of minority stockholders.

Atypical and/or unusual transactions are a subset of significant transactions and are identifiable from the atypical nature of the counterparty or purpose of the transactions and/or from the unusual way in which the transfer price is determined or from the timing of the event.

As an example, the following may be atypical and/or unusual transactions: • considering the nature of the counterparty: significant transactions arranged with related parties; • considering the purpose of the transaction: significant transactions involving the transfer of resources, services or obligations that are not conducted in the ordinary course of the Group’s activities; • considering the way that transfer price is determined: significant transactions whose transfer price is not determined on an arms’–length basis and, in any case, those for which no consideration is agreed; • considering the timing of the event: significant transactions arranged close to the accounting reference date or other relevant date for the purposes of providing information to the stockholders and/or the market.

With reference to the transactions referred to above, the following quantitative disclosures provided in accordance with the requirements of CONSOB Communication 6064293 dated 28 July 2006 was determined on the basis described above.

304 305 3.1 Related–party transactions

The related quantitative disclosures have been provided earlier in point 2 “Information on related–party transactions”.

3.2 Significant non–recurring events and transactions

Significant and non–recurring events and transactions that took place during the year are summarized below, together with their effects on the financial position, results of operations and cash flows of the Group.

1. On 5 September 2007, Banca Popolare di Vicenza sold 50% of its shares in the insurance companies Vicenza Life and Berica Vita and in the fund management company BPVi Fondi, for a total of 72.8 million euro under the partnership agreement with Cattolica Assicurazioni. 2. Under the same partnership agreement with Cattolica Assicurazioni, on 5 September 2007 Banca Popolare di Vicenza purchased 50% of the insurance company ABC Assicura and of the fund management company Verona Gestioni for a total of 25.9 million euro. 3. Also as part of this partnership agreement, Banca Popolare di Vicenza subscribed to a capital increase by Cattolica Assicurazioni, corresponding to 8% of its capital stock, for a total of 184.9 million euro. 4. A total of 61 branches were acquired from the UBI Banca Group on 31 December 2007 for a provisional price of 488 million euro.

All these significant non–recurring transactions fall within the ordinary course of business and do not represent atypical and/or unusual transactions.

Summary of significant and non–recurring events and transactions affecting the balance sheet

Transaction Amount Line item1 % incidence in thousands of Euro Description Amount

1) Disposal of interests in Berica Vita, Vicenza Life and BPVi Fondi (72,794) n.a. n.a. n.a. 2) Purchase of interest in ABC Assicura and Verona Gestioni 25,917 n.a. n.a. n.a. 3) Subscription to capital increase by Cattolica Assicurazioni 184,908 40 Assets 1,215,589 15.2% 4) Purchase of branches from the UBI Banca Group 488,000 130 Assets 984,936 49.5%

1 This refers to the total amount reported in the corresponding line item of the balance sheet.

306 307 Summary of significant and non–recurring events and transactions affecting the cash flow statement.

Transaction Amount Line item1 % incidence in thousands of Euro Description Amount

1) Disposal of interests in Berica Vita, Vicenza Life and BPVi Fondi 72,794 B.1. 79,393 91.7% 2) Purchase of interest in ABC Assicura and Verona Gestioni (25,917) B.2. (550,297) 4.7% 3) Subscription to capital increase by Cattolica Assicurazioni (184,908) A.2. (3,547,110) 5.2% 4) Purchase of branches from the UBI Banca Group (488,000) B.2. (550,297) 88.7%

1 This refers to the total cash flow generated (absorbed) reported in the corresponding line of the cash flow statement.

Summary of significant and non–recurring events and transactions affecting the income statement.

Transaction Amount Line item1 % incidence in thousands of Euro Description Amount

1) Disposal of interests in Berica Vita, Vicenza Life and BPVi Fondi – gross of tax 40,992 280 Income 194,192 21.1% statement – tax (2,164) 290 Income (76,652) 2.8% statement – net of tax 38,828 340 Income 113,731 34.1% statement

1 This refers to the total amount reported in the corresponding line item of the income statement.

3.3 Positions or transactions deriving from atypical and/or unusual transactions

No atypical and/or unusual transactions with a significant effect on the Group’s financial and operating position were arranged during the year.

306 307 PART I EQUITY–SETTLED PAYMENT ARRANGEMENTS

There are no outstanding equity–settled payment arrangements.

308 309 ATTACHMENTS AT 31 DECEMBER 2007

ATTACHMENT NO. 1 In compliance with the requirements of art. 160.1–bis of TUF (Italy’s Consolidated Financial Markets Act), the following table presents the fees earned by the independent auditors and members of its network for auditing and other services provided to the Group.

(in thousands of Euro)

Type of service Party providing service Fees1

Audit KPMG SpA 435 Attestation services KPMG SpA 31 Tax advisory services K-Studio Associato SpA 35 Other services KPMG SpA / KPMG Advisory SpA 684

Total 1,185

1 these amounts include out-of-pocket expenses recharged plus any disallowable VAT.

308 309 . FINANCIAL STATEMENTS OF SUBSIDIARY COMPANIES AT 31 DECEMBER 2007 BANCA POPOLARE DI VICENZA BALANCE SHEET AS OF 31 DECEMBER 2007 in Euro

Assets 31.12.2007 31.12.2006 10. Cash and balances with central banks 108,425,370 95,470,415 20. Financial assets held for trading 796,391,192 1,301,686,216 30. Financial assets at fair value 25,792,223 31,656,081 40. Financial assets available for sale 656,373,763 450,492,326 60. Loans and advances to banks 2,690,551,667 1,930,340,292 70. Loans and advances to customers 14,939,215,395 12,067,101,386 100. Equity investments 1,107,185,447 1,138,078,432 110. Property, plant and equipment 42,474,229 30,871,316 120. Intangible assets 711,243,074 239,742,516 of which: - goodwill 705,588,934 236,373,917 130. Tax assets 95,273,538 132,009,555 a) current 21,607,258 45,415,921 b) deferred 73,666,280 86,593,634 140. Non-current assets held for sale 81,928,764 – 150. Other assets 156,172,462 118,838,331

Total assets 21,411,027,124 17,536,286,866

312 313 Equity and liabilities 31.12.2007 31.12.2006 10. Deposits from banks 3,433,575,122 1,653,636,593 20. Due to customers 7,216,764,487 6,664,203,002 30. Debt securities in issue 4,566,190,907 4,316,364,119 40. Financial liabilities held for trading 621,977,800 614,512,494 50. Financial liabilities at fair value 2,185,335,769 1,467,498,328 80. Tax liabilities: 74,395,535 72,613,664 a) current 52,620,952 17,253,687 b) deferred 21,774,583 55,359,977 100. Other liabilities 408,669,247 290,992,594 110. Provision for severance indemnities 51,814,097 55,568,333 120. Provisions for risks and charges 68,697,406 53,126,201 b) other provisions 68,697,406 53,126,201 130. Valuation reserves (43,225,395) 16,724,407 150. Equity instruments 13,629,996 12,053,948 160. Reserves 478,158,674 410,244,233 170. Additional paid-in capital 1,963,296,772 1,557,855,602 180. Capital stock 261,656,498 230,868,285 200. Net income (loss) for the year (+/-) 110,090,209 120,025,063 Total Equity and Liabilities 21,411,027,124 17,536,286,866

312 313 BANCA POPOLARE DI VICENZA INCOME STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2007 in Euro

Captions 31.12.2007 31.12.2006 10 Interest income and similar revenues 877,720,355 644,469,179 20 Interest expense and similar charges (522,448,280) (331,550,059) 30 Net interest income 355,272,075 312,919,120 40. Fee and commission income 193,434,776 191,844,530 50. Fee and commission expense (18,446,032) (18,549,025) 60. Net fee and commission income 174,988,744 173,295,505 70. Dividend and similar income 68,299,335 60,696,320 80. Net trading income (18,437,536) 381,990 90. Net hedging gains (losses) – 2,057,526 100. Gains (losses) on disposal or repurchase of: 5,122,557 48,654,514 a) loans and advances (16,717) 359 b) financial assets available for sale 4,054,957 66,707,308 d) financial liabilities 1,084,317 (18,053,153) 110. Net change in financial assets and liabilities at fair value (2,566,634) (7,367,895) 120. Net interest and other banking income 582,678,541 590,637,080 130. Net impairment adjustments to: (112,205,499) (94,082,911) a) loans and advances (102,790,209) (81,149,491) b) financial assets available for sale (9,116,990) (12,707,652) c) financial assets held to maturity – – d) other financial transactions (298,300) (225,768) 140. Net income from financial activities 470,473,042 496,554,169 150. Administrative costs: (372,363,369) (340,236,310) a) payroll (209,629,635) (192,348,758) b) other administrative costs (162,733,734) (147,887,552) 160. Net provisions for risks and charges (26,104,834) (13,470,992) 170. Net adjustments to property, plant and equipment (5,673,226) (5,060,118) 180. Net adjustments to intangible assets (2,198,992) (2,443,392) 190. Other operating charges/income 42,339,155 38,446,500 200 Operating costs (364,001,266) (322,764,312) 210. Profit (loss) from equity investments 42,627,679 398,934 240. Gains (losses) on disposal of investments 9,438 21,096 250. Profit (loss) from current operations before tax 149,108,893 174,209,887 260. Income taxes on current operations (39,018,684) (54,184,824) 270. Profit (loss) from current operations after tax 110,090,209 120,025,063 290. Net income (loss) for the year 110,090,209 120,025,063

314 314

. BANCA NUOVA S.p.A. BALANCE SHEET AS OF 31 DECEMBER 2007 in Euro

Assets 31.12.2007 31.12.2006 10. Cash and balances with central banks 48,401,693 38,823,210 20. Financial assets held for trading 15,229,245 61,927,911 40. Financial assets available for sale 28,685,855 28,322,740 60. Loans and advances to banks 436,995,400 305,516,291 70. Loans and advances to customers 2,535,454,543 2,317,284,428 100. Equity investments 33,372,025 24,742,225 110. Property, plant and equipment 25,791,498 25,126,374 120. Intangible assets 53,835,782 53,844,442 of which: - goodwill 52,531,727 52,531,727 130. Tax assets 12,817,672 15,279,856 a) current 4,421,865 4,468,023 b) deferred 8,395,807 10,811,833 150. Other assets 72,404,758 72,592,172

Total assets 3,262,988,471 2,943,459,649

316 317 Equity and liabilities 31.12.2007 31.12.2006 10. Deposits from banks 26,842,985 151,856,943 20. Due to customers 2,210,791,744 1,886,535,753 30. Debt securities in issue 518,466,867 381,266,623 40. Financial liabilities held for trading 21,549,468 65,616,767 50. Financial liabilities at fair value 167,490,617 140,452,734 80. Tax liabilities 17,608,345 12,363,768 a) current 12,365,563 6,079,734 b) deferred 5,242,782 6,284,034 100. Other liabilities 69,173,280 82,429,959 110. Provision for severance indemnities 11,505,434 13,636,918 120. Provisions for risks and charges 14,557,008 6,150,930 b) other provisions 14,557,008 6,150,930 130. Valuation reserves 14,340,798 14,383,359 160. Reserves 42,403,332 41,961,257 170. Additional paid-in capital 108,437,771 108,437,771 180. Capital stock 29,783,868 29,783,868 200. Net income (loss) for the year (+/-) 10,036,954 8,582,999

Total Equity and Liabilities 3,262,988,471 2,943,459,649

316 317 BANCA NUOVA S.p.A. INCOME STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2007 in Euro

Captions 31.12.2007 31.12.2006 10. Interest income and similar revenues 164,003,097 123,935,530 20. Interest expense and similar charges (72,230,937) (45,515,406) 30. Net interest income 91,772,160 78,420,124 40. Fee and commission income 47,023,308 43,377,323 50. Fee and commission expense (7,842,151) (6,059,656) 60. Net fee and commission income 39,181,157 37,317,667 70. Dividend and similar income 4,215,861 177,997 80. Net trading income 1,382,864 2,166,330 100. Gains (losses) on disposals/repurchases of 454,710 173,059 a) loans and advances 15,814 9,703 b) financial assets available for sale – 2,486 d) financial liabilities 438,896 160,870 110. Net change in financial assets and liabilities at fair value (131,758) (447,759) 120. Net interest and other banking income 136,874,994 117,807,418 130. Net impairment adjustments to (10,632,850) (7,490,242) a) loans and advances (10,669,202) (7,356,782) d) other financial transactions 36,352 (133,460) 140. Net income from financial activities 126,242,144 110,317,176 150. Administrative costs (100,558,463) (95,188,577) a) payroll (55,013,628) (52,801,425) b) other administrative costs (45,544,835) (42,387,152) 160. Net provisions for risks and charges (6,711,888) (1,176,323) 170. Net adjustments to property, plant and equipment (2,752,433) (2,585,265) 180. Net adjustments to intangible assets (688,144) (544,474) 190. Other operating charges/income 7,314,685 4,272,497 200 Operating costs (103,396,243) (95,222,142) 210. Profit (loss) from equity investments (660,000) (1,040,000) 220. Net gains (losses) arising on fair value adjustments to property, plant and equipment and intangible assets (87,653) 3,000 240. Gains (losses) on disposal of investments 1,883 4,000,337 250. Profit (loss) from current operations before tax 22,100,131 18,058,371 260. Income taxes on current operations (12,063,177) (9,475,372) 270. Profit (loss) from current operations after tax 10,036,954 8,582,999 290. Net income (loss) for the period 10,036,954 8,582,999

318 319 319

. CARIPRATO S.p.A. BALANCE SHEET AS OF 31 DECEMBER 2007 in Euro

Assets 31.12.2007 31.12.2006 10. Cash and balances with central banks 30,083,437 21,201,150 20. Financial assets held for trading 35,557,355 61,855,782 40. Financial assets available for sale 39,172,771 37,762,936 60. Loans and advances to banks 324,709,018 255,981,578 70. Loans and advances to customers 3,198,350,751 2,739,508,469 100. Equity investments 2,467,804 2,467,804 110. Property, plant and equipment 105,980,263 105,017,456 120. Intangible assets 6,343,224 6,296,420 of which: - goodwill 5,764,659 5,764,659 130. Tax assets 16,066,702 15,910,064 a) current 4,166,742 4,355,075 b) deferred 11,899,960 11,554,989 150. Other assets 52,693,790 42,659,289

Total assets 3,811,425,115 3,288,660,948

320 321 Equity and liabilities 31.12.2007 31.12.2006 10. Deposits from banks 692,667,408 294,359,615 20. Due to customers 1,853,782,255 1,756,360,115 30. Debt securities in issue 637,062,779 544,358,434 40. Financial liabilities held for trading 18,627,191 20,696,999 50. Financial liabilities at fair value 193,149,283 215,264,473 80. Tax liabilities 18,561,868 30,324,724 a) current 4,022,112 11,596,056 b) deferred 14,539,756 18,728,668 100. Other liabilities 68,605,190 100,171,754 110. Provision for severance indemnities 16,240,501 17,095,464 120. Provisions for risks and charges 23,923,741 21,157,931 a) pensions and similar commitments 9,191,287 9,841,830 b) other provisions 14,732,454 11,316,101 130. Valuation reserves 50,894,099 50,152,174 160. Reserves 108,876,499 105,601,287 170. Additional paid-in capital 13,502,766 13,502,766 180. Capital stock 103,300,000 103,300,000 200. Net income (loss) for the year (+/-) 12,231,535 16,315,212

Total Equity and Liabilities 3,811,425,115 3,288,660,948

320 321 CARIPRATO S.p.A. INCOME STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2007 in Euro

Captions 31.12.2007 31.12.2006 10 Interest income and similar revenues 195,116,438 151,324,680 20 Interest expense and similar charges (85,741,734) (51,638,821) 30 Net interest income 109,374,704 99,685,859 40. Fee and commission income 43,268,469 43,048,171 50. Fee and commission expense (2,163,272) (2,241,089) 60. Net fee and commission income 41,105,197 40,807,082 70. Dividend and similar income 4,691,970 309,170 80. Net trading income 875,850 (240,317) 100. Gains (losses) on disposal or repurchase of 193,204 564,120 b) financial assets available for sale – 429,514 d) financial liabilities 193,204 134,606 110. Net change in financial assets and liabilities at fair value 41,063 46,664 120. Net interest and other banking income 156,281,988 141,172,578 130. Net impairment adjustments to (22,120,005) (14,473,021) a) loans and advances (21,792,013) (13,504,558) b) financial assets available for sale (163,670) (1,155,665) d) other financial assets (164,322) 187,202 140. Net income from financial activities 134,161,983 126,699,557 150. Administrative costs (106,383,340) (99,183,707) a) payroll (64,750,560) (60,647,458) b) other administrative costs (41,632,780) (38,536,249) 160. Net provisions for risks and charges (8,369,212) (2,124,652) 170. Net adjustments to property, plant and equipment (3,253,275) (3,446,376) 180. Net adjustments to intangible assets (237,664) (315,499) 190. Other operating charges/income 8,455,376 9,389,439 200 Operating costs (109,788,115) (95,680,795) 220. Net gains (losses) arising on fair value adjustments to property, plant and equipment and intangible assets 15,000 20,000 240. Gains (losses) on disposal of investments (8,344) 629,979 250. Profit (loss) from current operations before tax 24,380,524 31,668,741 260. Income taxes on current operations (12,148,989) (15,353,529) 270. Profit (loss) from current operations after tax 12,231,535 16,315,212 290. Net income (loss) for the year 12,231,535 16,315,212

322 323 322 323

. FARBANCA BALANCE SHEET AS OF 31 DECEMBER 2007 in Euro

Assets 31.12.2007 31.12.2006 10. Cash and balances with central banks 23,532 20,466 40. Financial assets available for sale 10,613 13,961 60. Loans and advances to banks 9,504,887 5,194,307 70. Loans and advances to customers 206,053,950 174,530,601 100. Equity investments 25,000 – 110. Property, plant and equipment 108,536 107,108 120. Intangible assets 2,203 – 130. Tax assets 152,252 107,421 a) current 74,419 – b) deferred 77,833 107,421 150. Other assets 23,637,753 14,781,421

Total assets 239,518,726 194,755,285

324 325 Equity and liabilities 31.12.2007 31.12.2006 10. Deposits from banks 136,837,894 83,140,359 20. Due to customers 56,563,758 50,515,396 30. Debt securities in issue 8,467,581 8,500,937 80. Tax liabilities 587,914 701,629 a) current 586,034 699,223 b) deferred 1,880 2,406 100. Other liabilities 970,494 16,714,403 110. Provision for severance indemnities 76,364 65,436 120. Provisions for risks and charges 185,000 163,428 b) other provisions 185,000 163,428 160. Reserves 1,069,500 714,904 170. Additional paid-in capital 4,964,286 4,964,286 180. Capital stock 28,242,100 28,242,100 200. Net income (loss) for the year (+/-) 1,553,835 1,032,407

Total Equity and Liabilities 239,518,726 194,755,285

324 325 FARBANCA INCOME STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2007 in Euro

Captions 31.12.2007 31.12.2006 10. Interest income and similar revenues 12,365,821 9,172,529 20. Interest expense and similar charges (6,222,008) (4,001,772) 30. Net interest income 6,143,813 5,170,757 40. Fee and commission income 689,999 646,119 50. Fee and commission expense (126,934) (129,291) 60. Net fee and commission income 563,065 516,828 80. Net trading income 6,760 5,690 100. Gains (losses) on disposals/repurchases of 24 – d) financial liabilities 24 – 120. Net interest and other banking income 6,713,662 5,693,275 130. Net impairment adjustments to 138,381 (557,936) a) loans and advances 141,729 (557,936) b) financial assets available for sale (3,348) – 140. Net income from financial activities 6,852,043 5,135,339 150. Administrative costs (3,765,543) (3,264,652) a) payroll (1,790,392) (1,727,297) b) other administrative costs (1,975,151) (1,537,355) 160. Net provisions for risks and charges (65,000) (115,436) 170. Net adjustments to property, plant and equipment (36,031) (65,322) 180. Net adjustments to intangible assets (193) (2,919) 190. Other operating charges/income (162,812) 114,442 200 Operating costs (4,029,579) (3,333,887) 240. Gains (losses) on disposal of investments 5 – 250. Profit (loss) from current operations before tax 2,822,469 1,801,452 260. Income taxes on current operations (1,268,634) (769,045) 270. Profit (loss) from current operations after tax 1,553,835 1,032,407 290. Net income (loss) for the year 1,553,835 1,032,407

326 327 326 327

. NORDEST MERCHANT S.p.A. BALANCE SHEET AS OF 31 DECEMBER 2007 in Euro

Assets 31.12.2007 31.12.2006 10. Cash and balances with central banks 475 479 40. Financial assets available for sale 1,559,149 1,560,381 60. Loans and advances 1,737,418 1,154,693 90. Equity investments 2,400,000 2,400,000 100. Property, plant and equipment 86,036 93,903 120. Tax assets 216,466 552,284 a) current 30,550 301,922 b) deferred 185,916 250,362 140. Other assets 12,921 6,807

Total assets 6,012,465 5,768,547

328 329 Equity and liabilities 31.12.2007 31.12.2006 10. Payables 711,116 676,208 70. Tax liabilities 65,523 170,207 a) current 65,523 170,207 90. Other liabilities 169,690 13,059 100. Provision for severance indemnities 178,038 159,214 110. Provisions for risks and charges 140,579 32,500 d) other provisions 140,579 32,500 120. Capital stock 2,000,000 2,000,000 160. Reserves 2,317,359 1,900,000 180. Net income (loss) for the year (+/-) 430,160 817,359

Total Equity and Liabilities 6,012,465 5,768,547

328 329 NORDEST MERCHANT S.p.A. INCOME STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2007 in Euro

Captions 31.12.2007 31.12.2006 10 Interest income and similar revenues 17,056 126,952 20 Interest expense and similar charges (37) (207) Net interest income 17,019 126,745 30. Fee and commission income 3,228,766 2,267,559 40. Fee and commission expense (1,493,871) (525,712) Net fee and commission income 1,734,895 1,741,847 50. Dividend and similar income 198,000 78,000 Net interest and other banking income 1,949,914 1,946,592 110. Net impairment adjustments to 4,089 (1,121) a) loans and advances 5,321 – b) financial assets available for sale (1,232) (1,121) 120. Administrative costs (1,717,675) (1,664,521) a) payroll (1,297,294) (1,252,254) b) other administrative costs (420,381) (412,267) 130. Net adjustments to property, plant and equipment (34,985) (36,155) 160. Net provisions for risks and charges (135,580) (32,500) 170. Other operating expenses (20,894) (23,320) 180. Other operating income 521,684 520,180 Net profit from operating activities 566,553 709,155 200. Gains (losses) on disposal of investments (8,881) (550) Profit (loss) from current operations before tax 557,672 708,605 210. Income taxes on current operations (127,512) 108,754 Profit (loss) from current operations after tax 430,160 817,359 Net income (loss) for the year 430,160 817,359

330 331 330 331

. NEM SGR S.p.A. BALANCE SHEET AS OF 31 DECEMBER 2007 in Euro

Assets 31.12.2007 31.12.2006 10. Cash and balances with central banks 336 208 60. Loans and advances 2,209,425 1,689,336 b) other loans and advances 2,209,425 1,689,336 120. Tax assets 7,640 100,171 a) current 75 86,685 b) deferred 7,565 13,486 140. Other assets 23,548 8,764

Total assets 2,240,949 1,798,479

332 333 Equity and liabilities 31.12.2007 31.12.2006 10. Payables 439,322 237,196 70. Tax liabilities 157,077 91,479 a) current 157,077 91,479 90. Other liabilities 118,069 122,195 120. Capital stock 1,200,000 1,200,000 160. Reserves 30,590 22,785 170. Valuation reserves (2,981) (2,981) 180. Net income (loss) for the year (+/-) 298,872 127,805

Total Equity and Liabilities 2,240,949 1,798,479

332 333 NEM SGR S.p.A. INCOME STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2007 in Euro

Captions 31.12.2007 31.12.2006 10. Fee and commission income 1,632,207 840,525 Net fee and commission income 1,632,207 840,525 40. Interest income and similar revenues 86,661 48,968 Net interest and other banking income 1,718,868 889,493 120. Administrative costs (1,264,748) (787,009) a) payroll (697,421) (522,489) b) other administrative costs (567,327) (264,520) 170. Other operating expenses (816) (1,495) 180. Other operating income 91,829 135,579 Net profit from operating activities 545,133 236,568 Profit (loss) from current operations before tax 545,133 236,568 210. Income taxes on current operations (246,261) (108,763) Profit (loss) from current operations after tax 298,872 127,805 Net income (loss) for the year 298,872 127,805

334 335 334 335

. NEM DUE SGR S.p.A. BALANCE SHEET AS OF 31 DECEMBER 2007 in Euro

Assets 31.12.2007 31.12.2006 10. Cash and balances with central banks 735 738 60. Loans and advances 2,364,293 1,388,973 b) other loans and advances 2,364,293 1,388,973 100. Property, plant and equipment 6,986 3,309 120. Tax assets 10,794 18,953 a) current – 2,013 b) deferred 10,794 16,940 140. Other assets 228,450 366

Total assets 2,611,258 1,412,339

336 337 Equity and liabilities 31.12.2007 31.12.2006 10. Payables 602,653 143,847 70. Tax liabilities 243,403 43,830 a) current 243,403 43,830 90. Other liabilities 191,651 – 100. Provision for severance indemnities 20,711 5,204 120. Capital stock 1,200,000 1,200,000 160. Reserves 19,458 – 180. Net income (loss) for the year (+/-) 333,382 19,458

Total Equity and Liabilities 2,611,258 1,412,339

336 337 NEM DUE SGR S.p.A. INCOME STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2007 in Euro

Captions 31.12.2007 31.12.2006 10. Fee and commission income 1,903,515 223,966 20. Fee and commission expense (138,750) – Net fee and commission income 1,764,765 223,966 40. Interest income and similar revenues 49,330 7,454 Net interest and other banking income 1,814,095 231,420 120. Administrative costs (1,207,983) (190,439) a) payroll (890,059) (118,249) b) other administrative costs (317,924) (72,190) 130. Adjustments to property, plant and equipment (1,147) (243) 170. Other operating expenses (386) – 180. Other operating income 5,003 – Net profit from operating activities 609,582 40,738 Profit (loss) from current operations before tax 609,582 40,738 210. Income taxes on current operations (276,200) (21,280) Profit (loss) from current operations after tax 333,382 19,458 Net income (loss) for the year 333,382 19,458

338 339 338 339

. IMMOBILIARE STAMPA S.p.A. BALANCE SHEET AS OF 31 DECEMBER 2007 in Euro

Assets 31.12.2007 31.12.2006 B) Fixed assets, indicating those under finance lease separately: I. Intangible fixed assets 4) Concessions, licenses, trademarks and similar rights 7,129 13,345 7) Other 5,414 6,594 Total 12,543 19,939 II. Tangible fixed assets 1) Land and buildings 195,334,026 189,343,468 2) Plant and machinery 210,498 197,991 4) Other assets 165,011 218,593 5) Assets under construction and advance payments 2,411,363 236,580 Total 198,120,898 189,996,632 III. Financial fixed assets, indicating amounts due within 12 months separately for each receivables account 1) Equity investments in: a) subsidiary companies – 2,436,585 d) other companies 4,101,398 4,104,398 2) Receivables: a) due from subsidiary companies within 12 months – 660,000 d) due from third parties beyond 12 months 27,521 33,945 Total 4,128,919 7,234,928 Total fixed assets (B) 202,265,360 197,251,499 C) Current assets: II. Receivables, indicating amounts due within 12 months separately for each receivables account: 1) Due from customers 2,033,923 376,842 4) Due from parent companies 594,140 298,432 4- bis) Due from tax authorities – 31,790 4- ter) Deferred tax assets 70,707 – 5) Due from third parties 5,738 1,095,839 Total 2,704,508 1,802,903 IV. Liquid funds: 1) Bank and post office accounts – 1,765,231 3) Cash and cash equivalents 275 315 Total 275 1,765,546 Total current assets (C) 2,704,783 3,568,449 D) Accrued income and prepaid expenses, indicating discounts on loans separately 173,737 176,464 Total accrued income and prepaid expenses (D) 173,737 176,464 Total assets 205,143,880 200,996,412

340 341 Liabilities and stockholders’ equity 31.12.2007 31.12.2006 A) Stockholders’ equity: I. Capital stock 125,000,000 125,000,000 II. Additional paid-in capital 69,400,000 69,400,000 IV. Legal reserve 1,427,509 1,303,058 VII. Other reserves, indicated separately – Euro rounding reserve – 1 – Extraordinary reserve 393,907 393,907 VIII. Retained earnings (accumulated losses) 33,842 31,769 IX. Net income (loss) for the year 3,220,698 2,489,025 Total stockholders’ equity (A) 199,475,956 198,617,760 B) Provisions for risks and charges 2) Provision for taxation 323,305 259,473 4) Other provisions 46,835 20,100 Total provisions for risks and charges (B) 370,140 279,573 C) Provisions for severance indemnities 631,879 582,025 Total provision for severance indemnities (C) 631,879 582,025 D) Payables, indicating amounts due beyond 12 months separately for each payables account: 3) Due to banks 2,980,595 – 7) Due to suppliers 633,141 762,622 11) Due to parent companies – 76,693 12) Due to tax authorities 254,534 21,059 13) Due to social security and pension institutions 54,118 63,279 14) Other payables – within 12 months 604,352 467,689 – beyond 12 months 61,628 64,488 Total payables (D) 4,588,368 1,455,830 E) Accrued expenses and deferred income, indicating premiums on loans separately 77,537 61,224 Total accrued expenses and deferred income (E) 77,537 61,224

Total liabilities and stockholders’ equity 205,143,880 200,996,412

MEMORANDUM ACCOUNTS 31.12.2007 31.12.2006 II. Company assets with third parties 1) Company securities with third parties 2,900,000 2,900,000 Total 2,900,000 2,900,000 III. Commitments 1) Supply contracts 216,023 996,312 2) Sale of buildings 3,559,300 980,000 3) Sureties received from third parties 820 1,650 Total 3,776,143 1,977,962 Total memorandum accounts 6,676,143 4,877,962

340 341 IMMOBILIARE STAMPA S.p.A. INCOME STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2007 in Euro

Captions 31.12.2007 31.12.2006 A) Value of production: 1) Revenues from sales and services 14,599,910 13,572,546 5) Other income and revenues, indicating contributions for operating expenses separately 878,485 14,800 Total value of production (A) 15,478,395 13,587,346 B) Production costs: 6) Raw, ancillary and consumable materials (54,373) (36,105) 7) Services received (1,858,121) (1,568,957) 8) Leases and rentals (54,217) (37,843) 9) Personnel: a) wages and salaries (1,306,397) (1,128,955) b) social security contributions (362,358) (305,750) c) severance indemnities (82,379) (74,805) d) pensions and similar commitments (35,270) (30,754) e) other costs (801) (818) 10) Amortization, depreciation and writedowns a) amortization of intangible fixed assets (14,607) (30,301) b) depreciation of tangible fixed assets (5,523,763) (5,302,356) 12) Provisions for risks (26,735) (20,100) 14) Other operating expenses (933,615) (994,747) Total production costs (B) (10,252,636) (9,531,491) DIFFERENCE BETWEEN VALUE AND COST OF PRODUCTION (A-B) 5,225,759 4,055,855 C) Financial income and charges: 16) Other financial income d) income other than the above, indicating that from subsidiary, associated and parent companies separately 76,411 188,051 17) Interest and other financial charges, indicating those from subsidiary, associated and parent companies separately (27,445) (1,604) Total financial income and charges (C) 48,966 186,447 E) Extraordinary income and charges 20) Income, indicating separately gains on disposals not classifiable in line 5) 29,943 – 21) Charges, indicating separately losses on disposals not classifiable in line 14), and taxes relating to prior years: (19,351) (58,107) – losses on disposals (382) – Total extraordinary items (E) 10,592 (58,107) Results before taxes (A - B ± C ± D ± E) 5,285,317 4,184,195 22) Income taxes for the year (current and deferred) (2,064,619) (1,695,170) 23) Net income (loss) for the year 3,220,698 2,489,025

342 343 342 343

. NUOVA MERCHANT S.p.A. BALANCE SHEET AS OF 31 DECEMBER 2007 in Euro

Assets 31.12.2007 31.12.2006 B) Fixed assets, indicating those under finance lease separately: I. Intangible fixed assets 208,351 204,801 – (Amortization) (202,302) (187,952) – (Writedowns) – – Total 6,049 16,849 II. Tangible fixed assets 15,549 14,775 – (Depreciation) (14,011) (11,645) – (Writedowns) – – Total 1,538 3,130 III. Financial fixed assets, indicating amounts due within 12 months separately for each receivables account 1,058 1,135 – (Writedowns) – – Total 1,058 1,135 Total fixed assets (B) 8,645 21,114 C) Current assets: II. Receivables, indicating amounts due within months separately for each receivables account: – within 12 months 7,518,071 1,671,346 – beyond 12 months 275,161 212,476 Total 7,793,232 1,883,822 IV. Liquid funds: 179 43,781 Total 179 43,781 Total current assets (C) 7,793,411 1,927,603 D) Accrued income and prepaid expenses, indicating discounts on loans separately 1,582 2,304 Total accrued income and prepaid expenses (D) 1,582 2,304 Total assets 7,803,638 1,951,021

344 345 Liabilities and stockholders’ equity 31.12.2007 31.12.2006 A) Stockholders’ equity: I. Capital stock 1,100,000 500,000 IV. Legal reserve 12,263 12,263 VII. Other reserves, indicated separately Extraordinary reserve 186,907 232,995 IX. Net income (loss) for the year (264,982) (46,088) Total stockholders’ equity (A) 1,034,188 699,170 B) Provisions for risks and charges – – Total provisions for risks and charges (B) – – C) Provisions for severance indemnities 147,946 116,365 Total provisions for severance indemnities (C) 147,946 116,365 D) Payables, indicating amounts due beyond months separately for each payables account: – within 12 months 6,616,586 1,135,486 – beyond 12 months – – Total payables (D) 6,616,586 1,135,486 E) Accrued expenses and deferred income, indicating premiums on loans separately 4,918 – Total accrued expenses and deferred income (E) 4,918 – Total liabilities and stockholders’ equity 7,803,638 1,951,021

344 345 NUOVA MERCHANT S.p.A. INCOME STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2007 in Euro

Captions 31.12.2007 31.12.2006 A) Value of production: 1) Revenues from sales and services 1,620,914 1,511,136 5) Other income and revenues, indicating contributions for operating expenses separately 24,412 43,609 Total value of production (A) 1,645,326 1,554,745 B) Production costs: 6) Raw, ancillary and consumable materials (4,539) (2,385) 7) Services received (870,104) (761,514) 8) Leases and rentals (141,834) (140,422) 9) Personnel a) wages and salaries (518,833) (378,728) b) social security contributions (206,418) (148,476) c) severance indemnities (40,997) (32,227) 10) Amortization, depreciation and writedowns a) amortization of intangible fixed assets (14,350) (29,410) b) depreciation of tangible fixed assets (1,592) (1,592) d) writedown of current receivables and of liquid funds (70,000) (33,662) 14) Other operating expenses (9,923) (14,926) Total production costs (B) (1,878,590) (1,543,342) DIFFERENCE BETWEEN VALUE AND COST OF PRODUCTION (A-B) (233,264) 11,403 C) Financial income and charges: 16) Other financial income d) income other than the above, indicating that from subsidiary, associated and parent companies separately 60,294 134 17) Interest and other financial charges, indicating those from subsidiary, associated and parent companies separately (127,957) (3,198) Total financial income and charges (C) (67,663) (3,064) E) Extraordinary income and charges 21) Charges, indicating separately losses on disposals not classifiable in line 14), and taxes relating to prior years: (1,584) – Total extraordinary items (E) (1,584) – Results before taxes (A - B ± C ± D ± E) (302,511) 8,339 22) Income taxes for the year (current and deferred) (37,529) (54,427) 23) Net income (loss) for the year (264,982) (46,088)

346 347 346 347

. BPVI FONDI SGR S.p.A. BALANCE SHEET AS OF 31 DECEMBER 2007 in Euro

Assets 31.12.2007 31.12.2006 10. Cash and balances with central banks 8,572 5,754 40. Financial assets available for sale 10,289,283 10,591,359 60. Loans and advances 10,910,423 11,947,457 a) for portfolio management 1,697,328 2,268,409 b) other loans and advances 9,213,095 9,679,048 90. Equity investments 300,000 300,000 100. Property, plant and equipment 127,551 125,301 110. Intangible assets 765,630 1,172,767 120. Tax assets 987,279 837,671 a) current 422,660 16,612 b) deferred 564,619 821,059 140. Other assets 600,971 888,153

Total assets 23,989,709 25,868,462

348 349 Equity and liabilities 31.12.2007 31.12.2006 10. Payables 7,928,034 7,183,425 70. Tax liabilities 67,922 110,962 a) current – 45,537 b) deferred 67,922 65,425 90. Other liabilities 1,970,010 3,928,623 100. Provision for severance indemnities 191,861 175,078 110. Provisions for risks and charges 601,500 628,600 b) other provisions 601,500 628,600 120. Capital stock 10,000,000 10,000,000 160. Reserves 1,287,359 1,149,096 170. Valuation reserves 98,845 54,415 180. Net income (loss) for the year (+/-) 1,844,178 2,638,263

Total Equity and Liabilities 23,989,709 25,868,462

348 349 BPVI FONDI SGR S.p.A. INCOME STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2007 in Euro

Captions 31.12.2007 31.12.2006 10. Fee and commission income 22,130,653 26,508,501 20. Fee and commission expense (14,961,447) (18,511,840) Net fee and commission income 7,169,206 7,996,661 40. Interest income and similar revenues 530,729 284,922 100. Gains (losses) on disposal or repurchase of 76,833 533,105 a) financial assets available for sale 76,833 533,105 Net interest and other banking income 7,776,768 8,814,688 120. Administrative costs (4,582,131) (4,830,852) a) payroll (2,521,511) (2,623,647) b) other administrative costs (2,060,620) (2,207,205) 130. Net adjustments to property, plant and equipment (54,282) (39,284) 140. Net adjustments to intangible assets (411,321) (303,206) 160. Net provisions for risks and charges – 21,400 170. Other operating expenses (10,491) (25,603) 180. Other operating income 718,990 829,269 Net profit from operating activities 3,437,533 4,466,412 210. Income taxes on current operations (1,593,355) (1,828,149) Profit (loss) from current operations after tax 1,844,178 2,638,263 Net income (loss) for the year 1,844,178 2,638,263

350 351 350 351

. BPV FINANCE (INTERNATIONAL) Plc BALANCE SHEET AS OF 31 DECEMBER 2007 in Euro

Assets 31.12.2007 31.12.2006 Cash at bank and in hand 448,967 137,588 Financial assets 621,108,372 605,483,636 – Held to maturity investments 46,128,553 46,608,411 – Held for trading investments 70,639,915 67,918,730 – Available for sale investments 504,339,904 490,956,495 Loans and advances 65,695,793 47,339,084 of which € 52,483,929 falls due after one year; 2006: € 44,839,084 Trade and other receivables 8,407,732 6,200,048 Deferred tax assets 4,414,552 – Property, plant and equipment 25,354 43,321 Derivative assets 173,873 – Total Assets 700,274,643 659,203,677

352 353 Liabilities 31.12.2007 31.12.2006 Interest bearing loans and borrowing 596,166,280 512,548,512 Debt securities in issue 23,516,618 29,469,086 Trade and other payables 4,966,457 3,378,765 of which € Nil falls due after one year; 2006: € Nil Derivative liabilities – 497,870 Deferred tax liabilities – 275,450 Total liabilities 624,649,355 546,169,683 Net assets 75,625,288 113,033,994 Capital and reserves Called up share capital 103,291 103,291 Capital contribution 103,291,380 103,291,380 Available for sale reserve (30,918,698) 1,914,354 Revenue reserve 1,128,344 1,128,344 Profit and loss account 2,020,971 6,596,625 Shareholders’ funds - equity 75,625,288 113,033,994

352 353 BPV FINANCE (INTERNATIONAL) Plc INCOME STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2007 in Euro

Captions 31.12.2007 31.12.2006 Interest receivable and similar income 35,508,494 24,712,600 Interest payable and similar charges (29,118,818) (18,730,253) Net interest income 6,389,676 5,982,347 Trading (expense)/income (938,518) 3,583,391 Other income/expense (1,324,073) (228,325) Administrative expenses (1,639,066) (1,700,680) Foreign exchange (losses)/gains (17,835) 13,783 Profit on ordinary activities before taxation 2,470,184 7,650,516 Tax on profit on ordinary activities (449,213) (1,053,891) Profit for the financial year 2,020,971 6,596,625

354 355 354 355

. SERVIZI BANCARI S.p.A. BALANCE SHEET AS OF 31 DECEMBER 2007 in Euro

Assets 31.12.2007 31.12.2006 B) FIXED ASSETS I. Intangible fixed assets 1) Start-up and expansion costs – 750 2) Research, development and advertising expenses – 67,921 4) Concessions, licenses, trademarks and similar rights 13,420 160,495 7) Other 424 4,623 Total 13,844 233,789 II. Tangible fixed assets 2) Plant and machinery 16,845 27,950 4) Other assets 131,354 153,283 Total 148,199 181,233 III. Financial fixed assets 1) Equity investments in: d) other companies 1,352 1,352 2) Receivables: d) due from third parties 2,253 2,253 Total 3,605 3,605 Total fixed assets (B) 165,648 418,627 C) CURRENT ASSETS II. Loans and advances 1) Due from customers 449,308 701,343 4) Due from parent companies 1,081,010 983,857 4- bis) Due from tax authorities – 34,854 4- ter) Deferred tax assets 420,945 537,511 5) Due from third parties 68,778 75,400 Total 2,020,041 2,332,965 IV. Liquid funds 1) Bank and post office accounts 3,964,552 1,210,769 3) Cash and cash equivalents 1,267 663 Total 3,965,789 1,211,432 Total current assets (C) 5,985,830 3,544,397 D) Accrued income and prepaid expenses, indicating discounts on loans separately 13,127 18,319 Total accrued income and prepaid expenses (D) 13,127 18,319 Total assets 6,164,605 3,981,343

MEMORANDUM ACCOUNTS 31.12.2007 31.12.2006 II. Sureties 100,000 122,094 Total memorandum accounts 100,000 122,094

356 357 Liabilities and stockholders’ equity 31.12.2007 31.12.2006 A) STOCKHOLDERS’ EQUITY I. Capital stock 100,000 100,000 IV. Legal reserve 25,144 25,144 VII. Other reserves 503,526 454,044 – Euro rounding reserve – 1 – Extraordinary reserve 399,589 350,106 – Merger surplus 103,937 103,937 VIII. Retained earnings (accumulated losses) 17 17 IX. Net income (loss) for the year 2,039,631 49,483 Total stockholders’ equity (A) 2,668,318 628,688 B) PROVISIONS FOR RISKS AND CHARGES 1) Pensions and similar commitments 24,711 24,711 3) Other 154,859 71,400 Total provisions for risks and charges (B) 179,570 96,111 C) PROVISIONS FOR SEVERANCE INDEMNITIES 1,320,739 1,344,551 Total provision for severance indemnities (C) 1,320,739 1,344,551 D) PAYABLES 4) Due to banks – – 7) Due to suppliers 216,670 229,807 11) Due to parent companies 216,634 216,076 12) Due to tax authorities 498,888 415,669 13) Due to social security and pension institutions 291,799 306,418 14) Other payables 724,216 697,067 Total payables (D) 1,948,207 1,865,037 E) ACCRUED EXPENSES AND DEFERRED INCOME 47,771 46,956 Total accrued expenses and deferred income (E) 47,771 46,956

Total Equity and Liabilities 6,164,605 3,981,343

356 357 SERVIZI BANCARI S.p.A. INCOME STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2007 in Euro

Captions 31.12.2007 31.12.2006 A) Value of production: 1) Revenues from sales and services 10,511,748 10,722,691 3) Change in contract work in process – (45,000) 5) Other revenues and income 265,964 350,950 Total value of production (A) 10,777,712 11,028,641 B) Production costs 6) Raw, ancillary and consumable materials (208,957) (351,608) 7) Services received (1,223,158) (1,733,776) 8) Leases and rentals (316,543) (382,994) 9) Personnel: a) wages and salaries (3,449,535) (3,522,903) b) social security contributions (920,234) (988,721) c) severance indemnities (180,943) (240,316) d) pensions and similar commitments (160,613) (105,186) e) other costs (5,370) (2,407) 10) Amortization, depreciation and writedowns a) amortization of intangible fixed assets (239,999) (927,035) b) depreciation of tangible fixed assets (88,834) (90,912) c) other amounts written off fixed assets (47) (1,311,152) d) writedown of current receivables (7,690) (8,468) 11) Change in inventories of raw, ancillary and consumable materials and goods for resale – (136,800) 13) Other provisions (83,459) (71,400) 14) Other operating expenses (297,080) (565,641) Total production costs (B) (7,182,462) (10,439,319) DIFFERENCE BETWEEN VALUE AND COST OF PRODUCTION (A-B) 3,595,250 589,322 C) Financial income and charges 16) Other financial income d) income other than the above – from parent companies 107,291 27,153 17) Interest and other financial charges d) charges other than the above – from parent companies (4,105) (27,578) – other (283) (11,603) Total financial income and charges (C) 102,903 (12,028) D) Adjustments to financial assets – – E) Extraordinary income and charges 20) Income – other 769 47,697 21) Charges – taxes relating to prior years (27,621) – other (48,421) (102,726) Total extraordinary items (E) (75,273) (55,029) Results before taxes (A - B ± C ± D ± E) 3,622,880 522,265 22) Income taxes – Current taxes (1,515,104) (995,349) – Deferred tax assets (68,145) 522,567 23) Net income (loss) for the year 2,039,631 49,483

358 359 358 359

. PRESTINUOVA S.p.A. BALANCE SHEET AS OF 31 DECEMBER 2007 in Euro

Assets 31.12.2007 31.12.2006 60. Loans and advances 326,694,918 285,592,833 100. Property, plant and equipment 179,147 156,092 110. Intangible assets 4,176,561 4,477,249 120. Tax assets 514,181 266,611 a) current 349,098 116,353 b) deferred 165,083 150,258 140. Other assets 872,290 545,919

Total assets 332,437,097 291,038,704

360 361 Equity and liabilities 31.12.2007 31.12.2006 10. Payables 280,210,289 250,781,605 70. Tax liabilities – 2,338,905 a) current – 2,315,937 b) deferred – 22,968 90. Other liabilities 13,946,564 10,356,130 100. Provision for severance indemnities 141,650 87,870 110. Provisions for risks and charges 343,603 406,781 b) other provisions 343,603 406,781 120. Capital stock 25,263,160 18,000,000 150. Additional paid-in capital 9,631,580 6,000,000 160. Reserves 142,413 (12,587) 180. Net income (loss) for the year 2,757,838 3,080,000

Total Equity and Liabilities 332,437,097 291,038,704

360 361 PRESTINUOVA S.p.A. INCOME STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2007 in Euro

Captions 31.12.2007 31.12.2006 10. Interest income and similar revenues 21,242,919 13,690,934 20. Interest expense and similar charges (12,357,519) (5,584,788) NET INTEREST INCOME 8,885,400 8,106,146 30. Fee and commission income 1,134,525 2,587,283 40. Fee and commission expense (9,710) (34,531) NET FEE AND COMMISSION INCOME 1,124,815 2,552,752 NET INTEREST AND OTHER BANKING INCOME 10,010,215 10,658,898 110. Net impairment adjustments to (200,777) (134,301) a) loans and advances (200,777) (134,301) 120. Administrative costs: (4,669,535) (4,849,414) a) payroll (3,013,249) (2,942,720) b) other administrative costs (1,656,286) (1,906,694) 130. Adjustments to property, plant and equipment (40,339) (21,774) 140. Adjustments to intangible assets (300,688) (156,186) 160. Net provisions for risks and charges (27,987) (220,781) 170. Other operating expenses (102,015) (160,993) 180. Other operating income 276,501 296,473 NET PROFIT FROM OPERATING ACTIVITIES 4,945,375 5,411,922 200. Gains (losses) on disposal of investments 104 – PROFIT (LOSS) FROM CURRENT OPERATIONS BEFORE TAX 4,945,479 5,411,922 210. Income taxes on current operations (2,187,641) (2,331,922) PROFIT (LOSS) FROM CURRENT OPERATIONS AFTER TAX 2,757,838 3,080,000 NET INCOME (LOSS) FOR THE YEAR 2,757,838 3,080,000

362 363 362 363

. MONFORTE 19 S.R.L. BALANCE SHEET AS OF 31 DECEMBER 2007 in Euro

Assets 31.12.2007 31.12.2006 B) Fixed assets, indicating separately: I. Intangible fixed assets 6,625 3,571 – (Amortization) (2,047) (714) – (Writedowns) – – Total 4,578 2,857 II. Tangible fixed assets 27,837,842 27,820,654 – (Depreciation) (709,347) (41,159) – (Writedowns) – – Total 27,128,495 27,779,495 Total fixed assets (B) 27,133,073 27,782,352 C) Current assets: II. Receivables, indicating amounts due within months separately for each receivables account: – within 12 months 24,302 5,486,509 – beyond 12 months 4,556,733 – Total 4,581,035 5,486,509 III. Financial assets not held as fixed assets – – Total – – IV. Liquid funds: 3,056,571 2,164,665 Total 3,056,571 2,164,665 Total current assets (C) 7,637,606 7,651,174 D) Accrued income and prepaid expenses, indicating discounts on loans separately 7,658 7,655 Total accrued income and prepaid expenses (D) 7,658 7,655 Total assets 34,778,337 35,441,181

364 365 Liabilities and stockholders’ equity 31.12.2007 31.12.2006 A) Stockholders’ equity: I. Capital stock 10,000 10,000 VII. Other reserves, indicated separately – Shareholder payment for future capital increase 6,100,200 – VIII. Retained earnings (accumulated losses) (28) – IX. Net income (loss) for the year (1,111,182) (49,828) Total stockholders’ equity (A) 4,998,990 (39,828) D) Payables, indicating amounts due beyond months separately for each payables account: – within 12 months 29,460,772 34,999,971 – beyond 12 months 312,500 312,500 Total payables (D) 29,773,272 35,312,471 E) Accrued expenses and deferred income, indicating premiums on loans separately 6,075 168,538 Total accrued expenses and deferred income (E) 6,075 168,538

Total Equity and Liabilities 34,778,337 35,441,181

MEMORANDUM ACCOUNTS 31.12.2007 31.12.2006 III. Commitments 2) Surety received from third parties 3,556,122 57,600,000 Total 3,556,122 57,600,000 Total memorandum accounts 3,556,122 57,600,000

364 365 MONFORTE 19 S.R.L. INCOME STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2007 in Euro

Captions 31.12.2007 31.12.2006 A) Value of production: 1) Revenues from sales and services 1,338,973 159,703 5) Other income and revenues, indicating contributions for operating expenses separately 4,168 – Total value of production (A) 1,343,141 159,703 B) Production costs: 6) Raw, ancillary and consumable materials (39) – 7) Services received (42,574) (19,378) 8) Leases and rentals (88,973) – 10) Amortization, depreciation and writedowns a) amortization of intangible fixed assets (1,333) (714) b) depreciation of tangible fixed assets (668,186) (41,159) 14) Other operating expenses (37,545) (3,391) Total production costs (B) (838,650) (64,642) DIFFERENCE BETWEEN VALUE AND COST OF PRODUCTION (A-B) 504,491 95,061 C) Financial income and charges: 16) Other financial income d) income other than the above, indicating that from subsidiary, associated and parent companies separately 60,603 7,479 17) Interest and other financial charges, indicating those from subsidiary, associated and parent companies separately (1,623,239) (169,943) Total financial income and charges (C) (1,562,636) (162,464) 21) Charges, indicating separately losses on disposals not classifiable in line 14), and taxes relating to prior years (10,247) – Total extraordinary items (E) (10,247) – Results before taxes (A – B ± C ± D ± E) (1,068,392) (67,403) 22) Income taxes for the year (current and deferred) (42,790) 17,575 23) Net income (loss) for the year (1,111,182) (49,828)

366 367 366 367

. PRESTINUOVA S.p.A. VERONA GESTIONI SGR BALANCE SHEET AS OF 31 DECEMBER 2006 BALANCE SHEET AS OF 31 DECEMBER 2007 in Euro in Euro

Assets 31.12.2007 31.12.2006 10. Cash and balances with central banks 79 49 20. Financial assets held for trading 2,781,874 6,595,650 40. Financial assets available for sale 4,579,458 751,555 60. Receivables 2,413,325 2,283,414 a) for portfolio management 1,078,067 998,448 b) other loans and advances 1,335,258 1,284,966 100. Property, plant and equipment 21,553 24,958 110. Intangible assets 58,610 85,560 120. Tax assets 795,628 80,965 a) current 760,901 57,641 b) deferred 34,727 23,324 140. Other assets 391,149 23,315

Total assets 11,041,676 9,845,466

368 369 Equity and liabilities 31.12.2007 31.12.2006 10. Payables 878,008 603,405 70. Tax liabilities 1,457,277 188,993 a) current 1,446,717 181,452 b) deferred 10,560 7,541 90. Other liabilities 183,842 1,086,581 100. Provision for severance indemnities 59,850 27,179 120. Capital stock 6,000,000 6,000,000 160. Reserves 269,997 156,832 170. Valuation reserves (65,260) (799) 180. Net income (loss) for the period 2,257,962 1,783,275

Total Equity and Liabilities 11,041,676 9,845,466

368 369 VERONA GESTIONI SGR INCOME STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2007 in Euro

Captions 31.12.2007 31.12.2006 10. Fee and commission income 6,930,880 5,654,010 Net fee and commission income 6,930,880 5,654,010 30. Dividend and similar revenues 28,548 – 40. Interest income and similar revenues 301,513 181,290 50. Interest expense and similar charges (1,401) – 60. Net trading income 30,454 12,452 100. Gains (losses) on disposals/repurchases of 36,923 15,665 b) financial assets available for sale 36,923 15,665 Net interest and other banking income 7,326,917 5,863,417 120. Administrative costs (3,595,071) (2,883,085) a) payroll (991,464) (799,712) b) other administrative costs (2,603,607) (2,083,373) 130. Net adjustments to property, plant and equipment (3,405) (2,520) 140. Net adjustments to intangible assets (26,950) (26,950) 170. Other operating expenses (29,274) (22,262) 180. Other operating income 22,852 18,322 Net profit from operating activities 3,695,069 2,946,922 Profit (loss) from current operations before tax 3,695,069 2,946,922 210. Income taxes on current operations (1,437,107) (1,163,647) Profit (loss) from current operations after tax 2,257,962 1,783,275 Net income for the period 2,257,962 1,783,275

370 INDEPENDENT AUDITORS’ REPORT ON THE CONSOLIDATED FINANCIAL STATEMENTS AS OF 31 DECEMBER 2007

370

CONSOLIDATED BALANCE SHEET AND CONSOLIDATED INCOME STATEMENT

IN EURO AND IN US DOLLARS BANCA POPOLARE DI VICENZA GROUP CONSOLIDATED BALANCE SHEET AS OF 31 DECEMBER, 2007 in Euro and US Dollars

Assets Thousands of Euro Thousands of US $ (1Euro=1,4721 $) 10. Cash and balances with central banks 186,946 275,203 20. Financial assets held for trading 885,773 1,303,946 30. Financial assets at fair value 25,792 37,968 40. Financial assets available for sale 1,215,589 1,789,469 50. Financial assets held to maturity 46,129 67,907 60. Loans and advances to banks 1,988,830 2,927,757 70. Loans and advances to customers 20,891,458 30,754,315 100. Equity investments 52,385 77,116 120. Property, plant and equipment 437,609 644,204 130. Intangible assets 984,936 1,449,924 of which: - goodwill 976,996 1,438,236 140. Tax assets 140,613 206,997 a) current 37,506 55,213 b) deferred 103,107 151,784 150. Non-current assets held for sale 101,320 149,153 160. Other assets 297,239 437,566

Total assets 27,254,619 40,121,525

374 375 Equity and liabilities Thousand of Euro Thousand of US $ (1Euro=1,4721 $) 10. Deposits from banks 3,278,694 4,826,565 20. Due to customers 11,479,359 16,898,764 30. Debt securities in issue 5,583,746 8,219,832 40. Financial liabilities held for trading 662,154 974,757 50. Financial liabilities at fair value 2,545,976 3,747,931 80. Tax liabilities 116,866 172,038 a) current 81,778 120,385 b) deferred 35,088 51,653 100. Other liabilities 559,929 824,273 110. Provision for severance indemnities 82,329 121,197 120. Provisions for risks and charges 108,675 159,980 a) pensions and similar commitments 9,191 13,530 b) other provisions 99,484 146,450 140. Valuation reserves 66,081 97,278 160. Equity instruments 13,630 20,065 170. Reserves 324,487 477,677 180. Additional paid-in capital 1,963,297 2,890,170 190. Capital stock 261,656 385,184 210. Minority interests (+/-) 94,009 138,391 220. Net income (loss) for the year (+/-) 113,731 167,423

Total Equity and Liabilities 27,254,619 40,121,525

375 BANCA POPOLARE DI VICENZA GROUP CONSOLIDATED INCOME STATEMENT FOR THE YEAR ENDED 31 DECEMBER 2007 in Euro and US Dollars

Captions Thousands of Euro Thousand sof US $ (1Euro=1,4721 $) 10 Interest income and similar revenues 1,256,160 1,849,193 20 Interest expense and similar charges (666,324) (980,896) 30 Net interest income 589,836 868,297 40. Fee and commission income 304,508 448,266 50 . Fee and commission expense (39,092) (57,547) 60. Net fee and commission income 265,416 390,719 70. Dividend and similar income 38,824 57,153 80. Net trading income (16,329) (24,038) 100. Gains (losses) on disposal or repurchase of: 6,264 9,221 a) loans and advances (1) (1) b) financial assets available for sale 4,538 6,680 d) financial liabilities 1,727 2,542 110. Net change in financial assets and liabilities at fair value (6,845) (10,077) 120. Net interest and other banking income 877,166 1,291,275 130. Net impairment adjustments on (146,291) (215,354) a) loans and advances (135,843) (199,974) b) financial assets available for sale (10,022) (14,753) d) other financial transactions (426) (627) 140. Net income from financial activities 730,875 1,075,921 150 Net premium income 241,177 355,037 160. Other insurance income (charges) (236,330) (347,901) 170. Net income from financial and insurance activities 735,722 1,083,057 180. Administrative costs (586,427) (863,279) a) payroll (348,452) (512,956) b) other administrative costs (237,975) (350,323) 190. Net provisions for risks and charges (41,092) (60,492) 200. Net adjustments to property, plant and equipment (17,401) (25,616) 210. Net adjustments to intangible assets (3,752) (5,523) 220. Other operating charges/income 60,074 88,433 230. Operating costs (588,598) (866,477) 240. Profit (loss) from equity investments 46,911 69,058 250. Net gains (losses) arising on fair value adjustments to property, plant and equipment and intangible assets 172 253 260. Adjustments to goodwill (660) (972) 270. Gains (losses) on disposal of investments 645 950 280. Profit (loss) from current operations before tax 194,192 285,869 290. Income taxes on current operations (76,652) (112,839) 300. Profit (loss) from current operations after tax 117,540 173,030 320. Net income (loss) for the year 117,540 173,030 330. Minority interests (3,809) (5,607) 340. Net income (loss) for the year pertaining to the parent bank 113,731 167,423

376 Branch network Banca Popolare di Vicenza REGISTERED OFFICE AND • 36100 Vicenza - Branch no. 8 • 36012 Asiago • 36073 Cornedo Vic. no GENERAL MANAGEMENT Viale dal Verme, 100 P.zza G. Carli, 61 Via Monte Verlaldo,16 - Loc. Cereda I-36100 Vicenza Tel. (0444) 927222 Tel. (0424) 64546 Tel. (0445) 446389 Via Btg. Framarin, 18 Telefax (0444) 927255 Telefax (0424) 462641 Telefax (0445) 953466 Tel. (0444) 339111 • 36100 Vicenza - Branch no. 9 • 36061 Bassano del Grappa • 36051 Creazzo Via Giuriato, 67 Via Roma, 85 Viale Italia, 200 Tel. (0444) 301700 Tel. (0424) 527111 Tel. (0444) 521400 CENTRAL SERVICES Telefax (0444) 301698 Telefax (0424) 524966 Telefax (0444) 340291 36100 Vicenza • 36100 Vicenza - Branch no. 10 • 36061 Bassano - Branch no. 1 • 36056 Cusinati di Tezze Sul Brenta Via Btg. Framarin, 22 Via F.lli Rosselli, 58 Viale Pecori Giraldi, 24 S.S. 47- Via Nazionale Tel. (0444) 339111 Tel. (0444) 240334 Tel. (0424) 502405 Tel. (0424) 560011 Telefax (0444) 329364 Telefax (0444) 240318 Telefax (0424) 503998 Telefax (0424) 561452 Teltex 480178 BPVSCE Swift BPVIIT 22 • 36100 Vicenza - Branch no. 11 • 36061 Bassano - Branch no. 2 • 36031 Dueville Via Ca’ Balbi, 309 Loc. Ca’ Baroncello - V. Cellini, 2 Piazza Monza, 39 • Stock Exchange Tel. (0444) 912733 Tel. (0424) 510280 Tel. (0444) 360400 Tel. (02) 62481800 Telefax (0444) 912742 Telefax (0424) 512263 Telefax (0444) 360438 Telefax (02) 29062724 • 36100 Vicenza - Branch no. 12 • 36050 Bolzano Vic.no • 36060 Fellette di Romano d’Ezzelino Via dell’Oreficeria, 16/A Via Zuccola, 3 Via Bassanese, 32 • Exchange office Tel. (0444) 565656 Tel. (0444) 350034 Tel. (0424) 512559 Tel. (02) 62481000 Telefax (0444) 963988 Telefax (0444) 350775 Telefax (0424) 512554 Telefax (02) 29062724 • 36100 Vicenza - Branch no. 13 • 36042 Breganze • 36032 Gallio Via E. Fermi, 130 Piazza Mazzini, 27 P.zza Gen. Turba, 3 • Gold Tel. (0444) 964694 Tel. (0445) 873133 Tel. (0424) 445171 Tel. (0444) 339133 Telefax (0444) 964697 Telefax (0445) 300373 Telefax (0424) 445415 Telefax (0444) 545982 • 36100 Vicenza - Branch no. 14 • 36040 Brendola • 36053 Gambellara Polegge Via Marosticana, 345 Via Roccolo, 1 Piazza Marconi, 5 • Treasury Tel. (0444) 945729 Tel. (0444) 400831 Tel. (0444) 444622 Tel. (0444) 995260 Telefax (0444) 595143 Telefax (0444) 601973 Telefax (0444) 444125 Telefax (0444) 329417 • 36100 Vicenza - Branch no. 15 • 36030 Caldogno • 36040 Grisignano di Zocco S.S. Pasubio, 335 - Loc. Maddalene Via Risorgimento, 2 Via Serenissima, 3 • International Tel. (0444) 980610 Tel. (0444) 585799 Tel. (0444) 614558 Tel. (0444) 339577/339564 Telefax (0444) 980695 Telefax (0444) 905133 Telefax (0444) 414358 Telefax (0444) 907125 • 36100 Vicenza - Branch no. 16 • 36043 Camisano Vicentino • 36023 Longare Piazzola Gualdi, 10 Piazza Umberto I, 11 Via Marconi, 38 Tel. (0444) 320447 Tel. (0444) 610170 Tel. (0444) 953580 Telefax (0444) 326219 Telefax (0444) 410489 Telefax (0444) 953585 • 36100 Vicenza - Branch no. 17 • 36010 Canove di Roana • 36045 Lonigo Via Zamenhof, 94 Via Milano Via Q. Rossi, 5 Tel. (0444) 914462 Tel. (0424) 692090 Tel. (0444) 830542 BRANCHES Telefax (0444) 914437 Telefax (0424) 692838 Telefax (0444) 831259 Province of Vicenza • 36100 Vicenza - Branch no. 18 • 36010 Carrè • 36046 Lusiana • 36100 Vicenza Corso Palladio, 13 Piazza 4 Novembre Viale Europa, 12/A Contrà Porti, 12 Tel. (0444) 325044 Tel. (0445) 892777 Tel. (0424) 406014 Tel. (0444) 906411 Telefax (0444) 321597 Telefax (0445) 892594 Telefax (0424) 406438 Telefax (0444) 320059 • 36100 Vicenza - Branch no. 19 • 36050 Cartigliano • 36034 Malo • 36100 Vicenza – Branch no. 1 Viale della Pace, 234 Piazza Concordia, 14 Via Raffaello, 2 C.so Ss.Felice e Fortunato, 145 Tel. (0444) 304878 Tel. (0424) 828541 Tel. (0445) 602021 Tel. (0444) 327460 Telefax (0444) 304842 Telefax (0424) 827354 Telefax (0445) 580410 Telefax (0444) 321118 • 36020 Albettone • 36065 Casoni di Mussolente • 36035 Marano Vicentino • 36100 Vicenza - Branch no. 2 Piazza Umberto I, 15 Via Cuccarollo, 1/A Piazza Silva, 30 C.so Padova, 42 Tel. (0444) 790355 Tel. (0424) 573088 Tel. (0445) 621013 Tel. (0444) 505466 Telefax (0444) 790555 Telefax (0424) 573107 Telefax (0445) 560038 Telefax (0444) 512273 • 36077 Altavilla Vicentina - Branch no. 1 • 36022 Cassola • 36061 Marchesane di Bassano • 36100 Vicenza - Branch no. 3 Via Vicenza, 232 Via Valsugana, 70 Strada Marchesane, 289 Viale delle Fornaci, 2 Tel. (0444) 348833 Tel. (0424) 566738 Tel. (0424) 500506 Tel. (0444) 961047 Telefax (0444) 348848 Telefax (0424) 566767 Telefax (0424) 501037 Telefax (0444) 962075 • 36041 Alte di Montecchio M. • 36030 Castelnovo di Isola Vic.na • 36063 Marostica • 36100 Vicenza - Branch no. 4 Via Trieste, 7 Via S. Antonio, 6 Piazza Castello, 44 Via S. Agostino, 9/11 Tel. (0444) 698533 Tel. (0444) 977388 Tel. (0424) 73641 Tel. (0444) 963223 Telefax (0444) 566999 Telefax (0444) 698090 Telefax (0444) 977382 Telefax (0424) 72103 • 36100 Vicenza - Branch no. 5 • 36011 Arsiero • 36010 Cavazzale • 36040 Meledo di Sarego Viale Trieste, 335 Piazza Francesco Rossi, 37 Via Chiesa, 3 Via D. Chiesa Tel. (0444) 512655 Tel. (0445) 740308 Tel. (0444) 595144 Tel. (0444) 820355 Telefax (0444) 512403 Telefax (0445) 742032 Telefax (0444) 595699 Telefax (0444) 820430 • 36100 Vicenza - Branch no. 6 • 36071 Arzignano • 36072 Chiampo • 36060 Molvena Via Btg. Framarin, 20 Via Trento, 59 Piazza Stazione, 7 Via Ponticello, 30 Tel. (0444) 339197 Tel. (0444) 673000 Tel. (0444) 420966 Tel. (0424) 411996 Telefax (0444) 339563 Telefax (0444) 674240 Telefax (0444) 420970 Telefax (0424) 411091 • 36100 Vicenza - Branch no. 7 • 36071 Arzignano - Branch no. 1 • 36010 Chiuppano • 36054 Montebello Vicentino Via Vecchia Ferriera, 72 Viale del Lavoro, 39/A Via Amabile Peguri, 1 Via Marconi, 15 Tel. (0444) 961509 Tel. (0444) 477711 Tel. (0445) 891955 Tel. (0444) 649033 Telefax (0444) 961450 Telefax (0444) 675549 Telefax (0445) 390144 Telefax (0444) 649472

378 379 • 36075 Montecchio Maggiore • 36015 Schio - Branch no. 1 Province of Asti Province of Bergamo Via S. Valentino Via Veneto, 2/B • 14100 Asti • 24061 Albano Sant’Alessandro Tel. (0444) 696668 Tel. (0445) 575492 Piazza Medici, 18 Via Aldo Moro, 8/10 Telefax (0444) 491221 Telefax (0445) 575508 Tel. (0141) 598798 Tel. (035) 583220 • 36030 Montecchio Precalcino • 36015 Schio - Branch no. 2 Telefax (0141) 598808 Telefax (035) 583231 Via Summano, 12/B Via Riva di Magrè Province of Belluno • 24052 Azzano San Paolo Tel. (0445) 864433 Tel. (0445) 530670 • 32021 Agordo Via Trieste, 16 Telefax (0445) 334044 Telefax (0445) 530680 Via XXVII Aprile, 44 Tel. (035) 534141 • 36047 Montegalda • 36040 Sossano Tel. (0437) 640606 Telefax (035) 534079 Via C. Cattaneo, 30 Via Roma, 20 Telefax (0437) 640631 • 24123 Bergamo Tel. (0444) 737100 Tel. (0444) 888406 • 32030 Arten di Fonzaso Viale Giulio Cesare, 69 Telefax (0444) 737213 Telefax (0444) 885911 Piazza San Gottardo, 23 Quartiere Monterosso • 36050 Sovizzo • 36024 Nanto Tel. (0439) 568125 Tel. (035) 363220 Via Riviera Berica, 73 Viale degli Alpini, 11 Telefax (035) 345216 Tel. (0444) 536384 Telefax (0439) 568015 Tel. (0444) 639955 • 32041 Auronzo di Cadore • 24020 Casnigo Telefax (0444) 638437 Telefax (0444) 536619 Piazza San Giovanni Battista, 30 • 36073 Spagnago di Cornedo Via Roma 63/A • 36025 Noventa Vicentina Tel. (0435) 400805 Tel. (035) 724370 Corso G. Matteotti, 84 Vicentino Telefax (035) 724371 Telefax (0435) 400806 Tel. (0444) 860177 Via Monte Cimone, 41 • 24020 Cene Telefax (0444) 760030 Tel. (0445) 431464 • 32100 Belluno Via Vittorio Veneto, 1 • 36040 Orgiano Telefax (0445) 431430 Via Vittorio Veneto, 187 Tel. (035) 716211 Via Libertà, 1 • 36067 Termine di Cassola Tel. (0437) 9351 Telefax (035) 716207 Tel. (0444) 874100 Viale Venezia, 33 Telefax (0437) 931800 • 24060 Costa Di Mezzate Telefax (0444) 874617 Tel. (0424) 32100 • 32100 Belluno - Branch no. 1 Via Roma, 10 • 36013 Piovene Rocchette Telefax (0424) 511575 Piazza Martiri, 27/C Tel. (035) 683563 Via Libertà, 2 • 36016 Thiene Tel. (0437) 950807 Telefax (035) 680772 Tel. (0445) 650444 Via Trento, 2 Telefax (0437) 950726 • 24035 Curno Telefax (0445) 550105 Tel. (0445) 854211 • 32016 Farra d’Alpago Via Terzi di Sant’Agata, 2/4 • 36026 Pojana Maggiore Telefax (0445) 363999 Via Matteotti, 75/B Tel. (035) 4158011 Via Matteotti, 8 • 36016 Thiene - Branch no. 1 Tel. (0437) 46096 Telefax (035) 4158034 Tel. (0444) 794079 Viale del Lavoro, 2 Telefax (0437) 454751 • 24044 Dalmine Telefax (0444) 794084 Tel. (0445) 369700 • 32032 Feltre Viale Betelli, 32/34 • 36021 Ponte di Barbarano Telefax (0445) 368825 Viale Monte Grappa, 18/B Tel. (035) 4157211 Via Riviera Berica, 25 • 36036 Torrebelvicino Tel. (0439) 840813 Telefax (035) 4157298 Tel. (0444) 795305 Piazza A. Moro Telefax (0439) 83035 • 24064 Grumello Del Monte Tel.(0445) 570200 Telefax (0444) 795298 • 32013 Longarone Via Roma, 95 Telefax (0445) 570057 • 36050 Pozzoleone • 36040 Torri di Quartesolo Via Marconi, 1 Tel. (035) 4495411 Via Roma, 2 Via Roma, 33 Tel. (0437) 573425 Telefax (035) 4495440 Tel. (0444) 462212 Tel. (0444) 581933 Telefax (0437) 578780 • 24040 Lallio Telefax (0444) 462198 Telefax (0444) 380293 • 32026 Mel Via Mascagni, 2/A • 36050 Quinto Vicentino • 36070 Trissino Via Tempietto, 15/B Tel. (035) 201191 Via Martiri della Libertà, 25 Via dell’Industria, 91 Tel. (0437) 540240 Telefax (035) 201250 Tel. (0444) 357674 Tel. (0445) 491044 Telefax (0437) 540257 • 24044 Mariano Al Brembo Telefax (0444) 357668 Telefax (0445) 491180 • 32010 Pieve d’Alpago - Loc. Paludi Piazza Vittorio Emanuele II, 8 • 36027 Rosà • 36078 Valdagno Via dell’Industria 6/A Tel. (035) 502882 Via Capitano A., 69 Piazza Dante, 8 Tel. (0437) 989283 Telefax (035) 502664 Tel. (0424) 581890 Tel. (0445) 409200 Telefax (0437) 989317 • 24030 Mozzo Telefax (0424) 581905 Telefax (0445) 408933 • 32014 Ponte nelle Alpi Piazza Trieste • 36028 Rossano Veneto • 36010 Velo D’Astico Viale Dolomiti, 23 Tel. (035) 4376849 Viale Monte Grappa 15 Via Roma, 16 Tel. (0437) 990562 Telefax (035) 4376447 Tel. 0424 219682 Tel. (0445) 740900 Telefax (0437) 990522 • 24027 Nembro Telefax 0424 541403 Telefax (0445) 740141 • 32035 Santa Giustina Via Roma, 13 • 36070 San Pietro Mussolino • 36020 Villaganzerla Via Roma, 15/D Tel. (035) 470241 Via Risorgimento, 59/B Telefax (035) 470791 Via Piazza, 118 Tel. (0437) 859355 Tel. (0444) 487487 • 24027 Nembro Tel. (0444) 639121 Telefax (0437) 859362 Telefax (0444) 487288 Telefax (0444) 638460 Branch no. 1 • 36030 San Vito di Leguzzano • 32036 Sedico Via Roma, 14 • 36030 Villaverla Piazza della Vittoria, 19/B Via Roma, 1 Via Milano, 1 Tel. (035) 471211 Tel. (0445) 519655 Tel. (0437) 853109 Telefax (035) 471298 Tel. (0445) 855622 Telefax (0437) 82548 Telefax (0445) 519699 Telefax (0445) 856388 • 24022 Nese • 36066 Sandrigo • 36010 Zanè • 32040 Tai di Cadore Via Europa, 67 Piazza Vittorio Emanuele, 11 Via Manzoni 26 P.zza Venezia, 14 Frazione Nese Tel. (0444) 658477 Tel.(0445) 380224 Tel. (0435) 501538 Tel. (035) 514471 Telefax (0444) 750048 Telefax (0445) 381118 Telefax (0435) 501540 Telefax (035) 513150 • 36014 Santorso • 36050 Zermeghedo • 32028 Trichiana • 24050 Orio Al Serio Via Piazzetta Villa Vicentina, 3 Via Michelangelo, 3 Via Roma, 35 Via Locatelli, 10 Tel. (0445) 640820 Tel. (0444) 484099 Tel. (0437) 555571 Tel. (035) 318780 Telefax (0445) 640774 Telefax (0444) 484222 Telefax (0437) 555564 Telefax (035) 320227 • 36015 Schio • 36030 Zugliano • 32040 Vallesella di Cadore • 24010 Petosino Piazza Garibaldi, 2 Via Roma, 68 Via Vittorio Veneto, 2 Via Martiri Della Libertà, 51 Tel. (0445) 529790 Tel. (0445) 330200 Tel. (0435) 728150 Tel. (035) 577211 Telefax (0445) 531093 Telefax (0445) 330093 Telefax (0435) 728292 Telefax (035) 577239

378 379 • 24058 Romano Di Lombardia • 25128 Brescia - Branch no. 6 • 25018 Montichiari Province of Gorizia Via Duca D’Aosta, 44 Via Trento, 3 - Ang. Via Bredina Via Trieste, 68 • 34170 Gorizia Tel. (0363) 901832 Tel. (030) 3707711 Tel. (030) 9653411 Corso Italia, 45 Telefax (0363) 902867 Telefax (030) 3707740 Telefax (030) 9653440 Tel. (0481) 538902 • 24068 Seriate • 25128 Brescia - Branch no. 7 • 25018 Montichiari - Branch no. 1 Telefax (0481) 538905 Piazza Giovanni XXIII, 6/A Via San Bartolomeo, 17 Via Aeroporto • 34072 Gradisca D’Isonzo Tel. (035) 301401 Tel. (030) 304122 Tel. (030) 9657039 Piazzale Dell’Unità, 20 Telefax (035) 300396 Telefax (030) 301072 Telefax (030) 9657290 Tel. (0481) 969605 • 24040 Stezzano • 25124 Brescia - Branch no. 8 • 25034 Orzinuovi Telefax (0481) 92240 Piazza Libertà, 12 Via Malta, 43 - Fraz. Folzano Via Giordano Bruno • 34073 Grado Tel. (035) 4540371 Tel. (030) 2160720 Tel. (030) 944332 Via Martiri della Libertà, 29 Telefax (035) 4540372 Telefax (030) 266553 Telefax (030) 9941070 Tel. (0431) 877044 • 24047 Treviglio • 25122 Brescia - Branch no. 9 • 25060 Polaveno Telefax (0431) 877037 Via Matteotti, 8/A Corso Giuseppe Garibaldi, 14/E Via Tonetti, 27 • 34074 Monfalcone Tel. (0363) 344906 Tel. (030) 3754555 Tel. (030) 84814 Via Duca d’Aosta, 97 Telefax (0363) 343412 Telefax (030) 3752499 Telefax (030) 8940115 Tel. (0481) 413654 • 24047 Treviglio - Branch no. 1 • 25124 Brescia - Branch no. 10 • 25011 Ponte San Marco Telefax (0481) 414106 Piazza Mentana, 1/A Via San Zeno, 121 Piazza della Preistoria, 11 • 34077 Ronchi dei Legionari Tel. (030) 9980988 Tel. (0363) 312811 Tel. (030) 3533910 Telefax (030) 9980979 Via Roma, 94 Telefax (0363) 312898 Telefax (030) 3533786 • 25037 Pontoglio Tel. (0481) 776451 • 24047 Treviglio - Branch no. 2 • 25126 Brescia - Branch no. 11 Piazza XXVI Aprile, 21 Telefax (0481) 474600 Via De Gasperi, 3 Via Volturno, 62 Tel. (030) 7471231 Province of Imperia Tel. (0363) 303967 Tel. (030) 293176 Telefax (030) 7376306 • 18100 Imperia Telefax (0363) 304729 Telefax (030) 40825 • 25024 Porzano Di Leno Via della Repubblica, 7 - C.P. 500 • 24040 Verdellino • 25031 Capriolo Via San Martino, 24 Tel. (0183) 299011 Piazza Affari, 32 Via Vittorio Emanuele II°, 5 Tel. (030) 9048118 Telefax (0183) 299005 Tel. (035) 4820355 Tel. (030) 7461131 Telefax (030) 906499 • 18038 Sanremo Telefax (035) 4820517 Telefax (030) 7461150 • 25070 Preseglie Corso Mombello, 33/35 • 24018 Villa D’Alme’ • 25030 Castel Mella Via Roma, 58 Tel. (0184) 503121 Via Roma, 31 Via Quinzano, 80/A Tel. (0365) 824313 Telefax (0184) 506424 Tel. (035) 639860 Tel. (030) 2685911 Telefax (0365) 824030 Province of Mantua Telefax (035) 639896 Telefax (030) 2685935 • 25086 Rezzato • 46043 Castiglione delle Stiviere Province of Bologna • 25020 Flero Via Garibaldi, 1/3 Via Cavour • 40122 Bologna Piazza IV Novembre, 105 Tel. (030) 2498511 Tel. (0376) 670311 Viale Vicini, 16/18 Tel. (030) 2560233 Telefax (030) 2498540 Telefax (0376) 631981 Tel. (051) 6494777 Telefax (030) 2560235 • 25030 Roncadelle • 46100 Mantua Telefax (051) 6494761 • 25063 Gardone Val Trompia Via Enrico Mattei, 37/39 Corso V. Emanuele, 31 • 40033 Casalecchio di Reno Via Matteotti, 71 - Inzino Tel. (030) 2583253 Tel. (0376) 329605 Via Ronzani, 7/40 Tel. (030) 8911906 Telefax (030) 2583166 Telefax (0376) 328912 Tel. (051) 6132829 Telefax (030) 8911909 • 25038 Rovato • 46019 Viadana Telefax (051) 6130484 • 25085 Gavardo Corso Bonomelli, 40/42 Piazza Benedetto Cellini, 9 • 40068 San Lazzaro Di Savena Via Quarena, 145 Tel. (030) 7720311 Tel. (0375) 782266 Via Emilia Est, 214 Tel. 0365 372007 Telefax (030) 7720398 Telefax (0375) 781077 Tel. (051) 465216 Telefax 0365 374438 • 25087 Salo’ Province of Milan Telefax (051) 467416 • 25016 Ghedi Via Montessori, 1 • 20094 Corsico Province of Brescia Via XX Settembre, 112 Tel. (0365) 521846 Via Vincenzo Monti, 5 • 25043 Breno Tel. (030) 9050702 Telefax (0365) 521847 Tel. (02) 4402933 Piazza Vittoria, 3 Telefax (030) 9050755 • 25010 San Martino Della Battaglia Telefax (02) 45119850 Tel. 0364 320822 • 25064 Gussago Piazza della Concordia, 11 • 20123 Milan Telefax 0364 22219 Viale Italia, 1 Tel. (030) 9108269 Via Torino / Ang. Via S. Vito • 25125 Brescia - Branch no. 1 Tel. (030) 2523911 Telefax (030) 9910304 Tel. (02) 864941 Via Orzinuovi 46/A Telefax (030) 2524367 • 25068 Sarezzo Telefax (02) 86450672 Tel. (030) 3462711 • 25065 Lumezzane Via Antonini, 26 • 20136 Milan - Branch no. 1 Via Monsuello, 29/D Tel. (030) 8935411 Telefax (030) 347305 Telefax (030) 8935498 Via Col di Lana, 6 • 25127 Brescia - Branch no. 2 Tel. (030) 8921895 • 25080 Serle Tel. (02) 8360048 Via Farfengo, 65 Telefax (030) 8922787 Via Galileo Galilei, 1 Telefax (02) 8378762 Quartiere Sant’anna • 25065 Lumezzane - Branch no. 1 Tel. (030) 6896783 • 20154 Milan - Branch no. 2 Tel. (030) 2411500 Via Virgilio Montini, 19 Telefax (030) 6910993 Corso Como, 15 Telefax (030) 2411077 Tel. (030) 8925988 Province of Como Tel. (02) 29010129 • 25125 Brescia - Branch no. 3 Telefax (030) 8925087 • 22100 Como Telefax (02) 29010321 Via Orzinuovi, 82 • 25040 Malonno Piazza Cavour, 24 • 20148 Milan - Branch no. 3 C/O Mercato Ortofrutticolo Via Torre, 10 Tel. (031) 303544 Via Civitali, 23 Tel. (030) 3541180 Tel. 0364 635579 Telefax (031) 309217 Tel. (02) 4039350 Telefax (030) 349862 Telefax 0364 635028 Province of Genoa Telefax (02) 4075146 • 25128 Brescia - Branch no. 4 • 25025 Manerbio - Branch no. 1 • 16043 Chiavari • 20155 Milan - Branch no. 4 Via Crocifissa di Rosa, 1 Via Roma, 18/20 Corso Dante, 39 Via Tolentino, 1 Tel. (030) 390239 Tel. (030) 9389711 Tel. (0185) 323400 Tel. (02) 316064 Telefax (030) 390774 Telefax (030) 9389712 Telefax (0185) 323074 Telefax (02) 315709 • 25136 Brescia - Branch no. 5 • 25080 Mazzano • 16121 Genoa • 20144 Milan - Branch no. 5 Via Triumplina, 125 Via Alcide de Gasperi, 6 Via delle Casaccie, 78/98 Via San Michele del Carso, 13 Tel. (030) 2016411 Tel. (030) 2120787 Tel. (010) 5762811 Tel. (02) 4694299 Telefax (030) 2016444 Telefax (030) 2120805 Telefax (010) 585908 Telefax (02) 4694499

380 381 • 20138 Milan - Branch no. 6 • 35027 Noventa Padovana Province of Parma • 33075 Morsano al Tagliamento Viale Ungheria, 20 Via Roma, 1 • 43043 Borgo Val di Taro P.zza Daniele Moro, 3 Tel. (02) 58011002 Tel. (049) 8935936 Piazzale Lauro Grossi, 2 Tel. (0434) 697014 Telefax (02) 58018062 Telefax (049) 8935940 Tel. (0525) 920018 Telefax (0434) 697839 • 20158 Milan - Branch no. 7 • 35010 Onara di Tombolo Telefax (0525) 920037 • 33087 Pasiano di Pordenone Piazza Schiavone, Via Sen. G. Cittadella, 5/A • 43036 Fidenza Via Roma, 102 Ang. V.R.M. De Capitani, 14 Tel. (049) 5993788 Via Cornini Malpeli, 13 Tel. (0434) 604077 Tel. (02) 39312917 Telefax (049) 5993761 Tel. (0524) 528180 Telefax (0434) 604078 Telefax (02) 39322534 • 35121 Padua Telefax (0524) 528140 • 33080 Porcia • 20124 Milan - Branch no. 8 Via Trieste, 45 • 43100 Parma Piazzetta Conte Silvio Viale Tunisia - Ang. Via Lecco, 12 Tel. (049) 660222 Via Emilia Est, 56/B di Porcia e Brugnera, 1 Tel. (02) 29401695 Telefax (049) 660952 Tel. (0521) 480411 Tel. (0434) 923108 Telefax (02) 20240606 • 20059 Vimercate • 35139 Padua - Branch no. 1 Telefax (0521) 242408 Telefax (0434) 591366 Via Luigi Cadorna, 2 Corso Milano, 22 • 43100 Parma - Branch no. 1 • 33170 Pordenone Tel. (039) 6260568 Tel. (049) 656132 Piazzale Santa Croce, 29 Via Martelli, 14 Telefax (039) 6084230 Telefax (049) 8756129 Tel. (0521) 207122 Tel. (0434) 241477 Province of Modena • 35127 Padua - Branch no. 2 Telefax (0521) 231223 Telefax (0434) 241166 • 41100 Modena Corso Stati Uniti, 23 • 43100 Parma - Branch no. 2 • 33080 Prata di Pordenone Via Giardini Pietro, 187 Tel. (049) 6988333 Via Toscana, 94 Via Cesare Battisti, 68 Tel. 059 239307 Telefax (049) 8704758 Tel. (0521) 460714 Tel. (0434) 611177 Telefax 059 237977 • 35133 Padua - Branch no.3 Telefax (0521) 460916 Telefax (0434) 621992 Province of Padua Via T.Aspetti, 246 Province of Pavia • 33077 Sacile • 35031 Abano Terme Tel. (049) 600849 • 27020 Alagna V.le Lacchin, 64 Via Martiri d’Ungheria, 14 Telefax (049) 8644462 Piazza Castello, 15 Tel. (0434) 737208 Tel. (049) 8602928 • 35126 Padua - Branch no. 4 Tel. (0382) 818137 Telefax (0434) 737209 Telefax (049) 8602691 Via Facciolati, 59 Telefax (0382) 818129 • 33078 San Vito al Tagliamento • 35020 Albignasego Tel. (049) 756008 • 27030 Castello d’Agogna Piazza del Popolo, 62 Via Roma, 117 Telefax (049) 8033060 Via Novara, 1 Tel. (0434) 875095 Tel. (049) 8626728 • 35728 Piove Di Sacco Tel. (0384) 256550 Telefax (0434) 875223 Telefax (049) 8626732 Via Marconi, 2 Telefax (0384) 256555 • 33079 Sesto al Reghena • 35010 Busa di Vigonza Tel. (049) 9701428 • 27100 Pavia Via degli Olmi, 11/A Via Regia, 37 Telefax (049) 5842652 Via Golgi, 63/A Tel. (0434) 699010 Tel. (049) 8935025 • 35020 Ponte S. Nicolò Tel. (0382) 422766 Telefax (0434) 699292 Telefax (049) 8935057 Via Volturno, 2 Telefax (0382) 422934 • 33097 Spilimbergo • 35010 Cadoneghe Tel. (049) 8962205 • 27020 Sartirana Lomellina Via Barbacane, 6 Strada del Santo, 17 Telefax (049) 8962148 Via Cavour, 133 Tel. (0427) 926123 Tel. (049) 8871951 Telefax (049) 8872654 • 35030 Rubano Tel. (0384) 800203 Telefax (0427) 419080 • 35012 Camposampiero Via Rossi, 3/N Telefax (0384) 800223 • 33080 Zoppola Via Rialto, 1 Tel. (049) 8987272 • 27020 Scaldasole Via Pancera, 4 Tel. (049) 9303022 Telefax (049) 8987274 Via Roma, 5 Tel. (0434) 574522 Telefax (049) 9303218 • 35046 Saletto di Vigodarzere Tel. (0382) 907772 Telefax (0434) 574512 • 35010 Carmignano di Brenta Via Leonardo Da Vinci, 61 Telefax (0382) 907962 Province of Reggio Emilia Via Roma, S.N. Tel. (049) 8849110 • 27029 Vigevano • 42027 Montecchio Emilia Tel. (049) 9430792 Telefax (049) 8849101 Via Merula, 24/26 Via Prampolini, 48/50 Telefax (049) 9430262 • 35010 San Giorgio In Bosco Tel. (0381) 88607 Tel. (0522) 861312 • 35013 Cittadella Via Valsugana, 86 Telefax (0381) 75675 Telefax (0522) 865531 Borgo Padova, 6 Tel. (049) 9451053 Province of Piacenza • 42100 Reggio Emilia Tel. (049) 5979343 Telefax (049) 9451085 • 29100 Piacenza - Branch no. 1 Via Emilia All’Ospizio, 18 Telefax (049) 9403578 • 35018 San Martino di Lupari Via Medaglie d’Oro, 7 Tel. (0522) 580914 • 35026 Conselve Via Roma, 68 Tel. (0523) 713081 Telefax (0522) 454683 V.le Venezia, 1 Tel. (049) 9461288 Telefax (0523) 758113 Province of Rovigo Tel. (049) 5384039 Telefax (049) 9461261 Province of Pordenone • 45011 Adria Telefax (049) 9501342 • 35011 Sant’Andrea di Campodarsego • 33082 Azzano Decimo Corso Garibaldi, 38/A • 35042 Este Via Caltana, 182 Via Maestri del Lavoro, 28 Tel. (0426) 900514 Via G.Matteotti, 23 Tel. (049) 9201226 Tel. (0434) 633438 Telefax (0426) 900878 Tel. (0429) 604317 Telefax (049) 9200911 Telefax (0434) 640898 • 45030 Occhiobello Telefax (0429) 601482 • 35010 Sant’Eufemia di Borgoricco • 33080 Bannia Via Eridania, 153/F • 35015 Galliera Veneta Via della Pieve, 43 Piazza E. Fermi, 1 Tel. (0425) 758267 Via Roma, 164 Tel. (049) 9335454 Tel. (0434) 560465 Telefax (0425) 758347 Tel. (049) 5969133 Telefax (049) 9335144 Telefax (049) 5969460 Telefax (0434) 957535 • 45014 Porto Viro • 35010 Limena • 35030 Tencarola di Selvazzano • 33084 Cordenons Via Risorgimento, 157 Via del Santo, 4 Via Padova, 24 Piazza della Vittoria, 36 Tel. (0426) 320205 Tel. (049) 8842956 Tel. (049) 8687071 Tel. (0434) 581285 Telefax (0426) 323388 Telefax (049) 8842163 Telefax (049) 8687074 Telefax (0434) 581275 • 45100 Rovigo • 35010 Loreggia • 35019 Tombolo • 33080 Fiume Veneto Via Sacro Cuore, 5 P.zza Papa Luciani, 8 Via Roma, 7/A Via San Francesco, 36/38 Tel. (0425) 423853 Tel. (049) 5793055 Tel. (049) 9470813 Tel. (0434) 564211 Telefax (0425) 29822 Telefax (049) 5794442 Telefax (049) 9470893 Telefax (0434) 561563 Province of Turin • 35015 Mottinello di Galliera V. • 35010 Trebaseleghe • 33085 Maniago • 10123 Turin Via Mottinello Nuovo, 31 Via C. Menotti, 32 P.zza Italia, 32 Via Lagrange, 10 Tel. (049) 9440066 Tel. (049) 9386810 Tel. (0427) 733044 Tel. (011) 5424010 Telefax (049) 9440301 Telefax (049) 9386813 Telefax (0427) 733028 Telefax (011) 539988

380 381 Province of Treviso • 31010 Farra di Soligo • 31020 Rua di S. Pietro di Feletto • 31050 Villorba • 31040 Bavaria di Nervesa della B. Via Calnova, 1/A Via Roma, 17/D Via A. Pacinotti, 1/C Via Aldo Moro, 2 Tel. (0438) 900101 Tel. (0438) 486997 Tel. (0422) 608368 Tel. (0422) 882266 Telefax (0438) 900121 Telefax (0438) 486997 Telefax (0422) 918128 Telefax (0422) 882267 • 31010 Fregona • 31020 San Fior • 31029 Vittorio Veneto • 31030 Bessica di Loria Via Mezzavilla Centro, 3 Via Europa, 67 Via Dante, 133 Via D. Alighieri, 22 Tel. (0438) 915009 Tel. (0438) 260303 Tel. (0438) 940980 Tel. (0423) 471001 Telefax (0438) 915090 Telefax (0438) 260265 Telefax (0438) 940951 Telefax (0423) 471010 • 31040 Guia di Valdobbiadene • 31020 San Giacomo di Veglia Province of Trieste • 31030 Bigolino Strada di Guia, 16 Piazza Fiume, 37 • 34015 Muggia P.zza Mons. Guadagnini, 58 Tel. (0423) 901090 Tel. (0438) 912080 Via Manzoni, 4 Tel. (0423) 981385 Telefax (0423) 901090 Telefax (0438) 912111 Tel. (040) 9278651 Telefax (0423) 982015 Telefax (040) 9278664 • 31031 Caerano S. Marco • 31036 Istrana • 31020 San Polo di Piave P.le Roma, 91 Est Via Roma, 60 • 34121 Trieste Via A. Gramsci, 9 Via Mazzini, 12 Tel. (0423) 859679 Tel. (0422) 832414 Tel. (0422) 856688 Telefax (0422) 832394 Telefax (0422) 856689 Tel. (040) 662662 Telefax (0423) 859680 Telefax (040) 662002 • 31011 Casella d’Asolo • 31037 Loria • 31020 San Vendemiano Via Roma, 19 Via Roma, 13 • 34122 Trieste - Branch no. 1 Via Tiziano, 150 Piazza San Giovanni, 1 Ang. Via Foresto Nuovo Tel. (0423) 755125 Tel. (0438) 400378 Tel. (040) 662750 Tel. (0423) 950860 Telefax (0423) 755090 Telefax (0438) 400347 Telefax (040) 662796 Telefax (0423) 950861 • 31021 Mogliano Veneto • 31020 San Zenone degli Ezzelini • 34123 Trieste - Branch no. 2 • 31033 Castelfranco Piazza Caduti, 38/39 Via Marconi, 68 Via Locchi, 26/1 Corso XXIX Aprile, 23 Tel. (041) 5904333 Tel. (0423) 968080 Tel. (040) 313333 Tel. (0423) 423211 Telefax (041) 5904340 Telefax (0423) 968989 Telefax (040) 312323 Telefax (0423) 423214 • 31044 Montebelluna • 31040 Segusino • 34141 Trieste - Branch no. 3 • 31033 Castelfranco - Branch no. 1 Via Roma, 51 Viale Italia, 229 Via Settefontane, 37 Borgo Treviso, 159/161 Tel. (0423) 614165 Tel. (0423) 978971 Tel. (040) 9380282 Tel. (0423) 722801 Telefax (0423) 614173 Telefax (0423) 978977 Telefax (040) 9380283 Telefax (0423) 722859 • 31010 Moriago della Battaglia • 31020 Sernaglia della Battaglia • 34133 Trieste - Branch no. 4 • 31033 Castelfranco - Branch no. 2 Via A. Moro, 46 P.zza Martiri, 24 Via Coroneo, 17/E Treville Tel. (0438) 890083 Tel. (0438) 966230 Tel. (040) 3478145 Via Castellana, 29 Telefax (0438) 890133 Telefax (0438) 966184 Telefax (040) 630297 Tel. (0423) 472985 • 31045 Motta Di Livenza • 31040 Signoressa di Trevignano • 34147 Trieste - Branch no. 5 Telefax (0423) 472488 Via Sante Nardini, 22 Via Feltrina, 1/F-1/G Via Flavia, 120 • 31033 Castelfranco - Branch no. 3 Tel. (0422) 861556 Tel. (0423) 677173 Tel. (040) 281291 Via Brenta, 10 Telefax (0422) 860009 Telefax (0423) 671043 Telefax (040) 8320070 Tel. (0423) 720025 Telefax (0423) 721176 • 31046 Oderzo • 31058 Susegana • 34135 Trieste - Branch no. 6 • 31033 Castelfranco - Branch no. 4 Via Spinè, 2 Via Conegliano, 96 Via L. Stock, 4/4 Borgo Padova, 34 Tel. (0422) 815957 Tel. (0438) 60813 Tel. (040) 420771 Tel. (0423) 721902 Telefax (0422) 815959 Telefax (0438) 451511 Telefax (040) 418247 Telefax (0423) 721774 • 31050 Onigo di Pederobba • 31100 Treviso Province of Udine • 31033 Castelfranco - Branch no. 5 Via Case Rosse, 2/A Viale Luzzatti, 82 • 33041 Aiello del Friuli Piazza della Serenissima, 32 Tel. (0423) 688686 Tel. (0422) 431970 Piazza Roma, 19 Tel. (0423) 722578 Telefax (0423) 688942 Telefax (0422) 432467 Tel. (0431) 973011 Telefax (0423) 744098 • 31038 Paese • 31100 Treviso - Branch no. 1 Telefax (0431) 973200 • 31030 Castello di Godego Via Postumia, 130 Via G. Dannunzio, 17/B • 33030 Buia Via Marconi, 22 Tel. (0422) 450480 Tel. (0422) 591047 Via S. Stefano, 105 Tel. (0423) 469041 Telefax (0422) 450483 Telefax (0422) 540738 Tel. (0432) 965109 Telefax (0423) 469881 • 31053 Pieve di Soligo • 31100 Treviso - Branch no. 2 Telefax (0432) 965110 • 31034 Cavaso del Tomba Piazza Caduti nei Lager, 1 Via S. Pelajo, 119 • 33042 Buttrio Via San Pio X, 2 - Loc. Caniezza Tel. (0438) 841859 Tel. (0422) 307246 Via Cividale, 10 Tel. (0423) 543401 Telefax (0438) 82045 Telefax (0422) 307193 Tel. (0432) 636000 Telefax (0423) 543402 • 31047 Ponte di Piave • 31100 Treviso - Branch no. 3 Telefax (0432) 673702 • 31030 Cison di Valmarino Via Roma, 24 Via Montegrappa, 32 • 33052 Cervignano del Friuli Via IV Novembre, 11 Piazza Libertà, 16/17 Tel. (0422) 857986 Tel. (0422) 264282 Tel. (0431) 32320 Tel. (0438) 975375 Telefax (0422) 857987 Telefax (0422) 234110 Telefax (0438) 85400 Telefax (0431) 32708 • 31022 Preganziol • 31100 Treviso - Branch no. 4 • 33043 Cividale del Friuli • 31010 Col San Martino Via Roma, 4 Via 4 Novembre, 84/A Via Giarentine, 1 Via Europa, 2 Tel. (0422) 331564 Tel. (0422) 546192 Tel. (0432) 701055 Tel. (0438) 898104 Telefax (0422) 639070 Tel. (0422) 546129 Telefax (0438) 989567 Telefax (0432) 701105 • 31015 Conegliano • 31023 Resana • 31049 Valdobbiadene • 33033 Codroipo Via XXIV Maggio, 12 Via Castellana, 41 Piazza Marconi, 15 Via IV Novembre, 5 Tel. (0438) 415462 Tel. (0423) 480105 Tel. (0423) 970611 Tel. (0432) 908688 Telefax (0438) 415526 Telefax (0423) 480216 Telefax (0423) 972625 Telefax (0432) 908677 • 31030 Dosson di Casier • 31039 Riese Pio X • 31050 Vedelago • 33100 Cussignacco P.zza Leonardo Da Vinci, 2 Via A. De Gasperi, 5/A Via Crispi, 8 Via Verona, 6 Tel. (0422) 491419 Tel. (0423) 483207 Tel. (0423) 400116 Tel. (0432) 602306 Telefax (0422) 491429 Telefax (0423) 454330 Telefax (0423) 401331 Telefax (0432) 602308 • 31050 Fanzolo di Vedelago • 31056 Roncade • 31020 Vidor • 33010 Feletto Umberto Via Stazione, 28/A Piazza I Maggio, 15 Via Capitello, 7 Via Udine, 18 Tel. (0423) 487011 Tel. (0422) 841531 Tel. (0423) 987121 Tel. (0432) 573027 Telefax (0423) 476507 Telefax (0422) 841532 Telefax (0423) 987101 Telefax (0432) 573573

382 383 • 33013 Gemona del Friuli • 33019 Tricesimo Tel. (041) 5190339 • 37040 Bonavigo Via Dante Alighieri, 207 Piazza Garibaldi, 45 Telefax (041) 5190342 Via Trieste, 13/15 Tel. (0432) 971496 Tel. (0432) 881725 • 30020 Meolo Tel. (0442) 670077 Telefax (0432) 971525 Telefax (0432) 881372 Riviera 18 Giugno, 62 Telefax (0442) 670090 • 33050 Gonars • 33100 Udine Tel. (0421) 345431 • 37051 Bovolone Via A. De Gasperi, 1 Via Cavour, 24 Telefax (0421) 345424 Via Giuseppe Garibaldi, 52/54 Tel. (0432) 992412 Tel. (0432) 516501 • 30174 Mestre Tel. (045) 6901911 Telefax (0432) 992288 Telefax (0432) 516356 Via F.lli Rondina, 3 - P.zza A. Coin Telefax (045) 7100462 • 33057 Ialmicco • 33100 Udine - Branch no. 1 Tel. (041) 959952 • 37012 Bussolengo P.zza Unione, 12 Viale Europa Unita, 85 Telefax (041) 958497 Via Verona, 8/A Tel. (0432) 929559 Tel. (0432) 503020 • 30172 Mestre - Branch no. 1 Tel. (045) 6700377 Telefax (0432) 924700 Telefax (0432) 501147 Ca’ Marcello, 67/A Telefax (045) 6700504 • 33054 Lignano Sabbiadoro • 33100 Udine - Branch no. 2 Tel. (041) 5310005 • 37043 Castagnaro Viale Europa, 19/A Piazzale Chiavris, 36 Telefax (041) 5316713 Via D. Alighieri, 40 Tel. (0431) 723011 Tel. (0432) 547200 • 30174 Mestre - Branch no. 2 Tel. (0442) 675588 Telefax (0431) 723069 Telefax (0432) 546222 Via Terraglio, 17 - C/O Coin Telefax (0442) 675582 • 33044 Manzano • 33100 Udine - Branch no. 3 Tel. (041) 958054 • 37053 Cerea Via San Giovanni, 6/A Viale L. Da Vinci, 107 Telefax (041) 979395 Via Roma, 2 Tel. (0432) 740046 Tel. (0432) 402828 • 30034 Mira Tel. (0442) 320871 Telefax (0432) 740225 Telefax (0432) 400460 Via Nazionale, 226 Telefax (0442) 321042 • 33035 Martignacco • 33100 Udine - Branch no. 4 Tel. (041) 4265144 • 37044 Cologna Veneta Via Cividina, 16 Viale Forze Armate, 4 Telefax (041) 4265834 Corso Gua’ Dea Piccini, 76 Tel. (0432) 678833 Tel. (0432) 581827 • 30035 Mirano Tel. (0442) 412467 Telefax (0432) 678534 Telefax (0432) 284810 Via Gramsci, 54 Telefax (0442) 410360 • 33057 Palmanova • 33100 Udine - Branch no. 5 Tel. (041) 5701500 • 37030 Colognola ai Colli Piazza Grande, 2 Via Pozzuolo, 143 Telefax (041) 5701320 Via Stra’, 52 Tel. (0432) 928300 Tel. (0432) 532353 • 30026 Portogruaro Tel. (045) 6151400 Telefax (0432) 929754 Telefax (0432) 532301 Via Martiri della Libertà, 109 Telefax (045) 6151404 • 33037 Pasian di Prato • 33100 Udine - Branch no. 6 Tel. (0421) 280496 • 37020 Dolcè Via S. Caterina, 23/A Via Marghera, 2 Telefax (0421) 72299 Via Passo di Napoleone, 1103 E/F/G Tel. (0432) 699033 Tel. (0432) 503437 • 30028 San Michele al Tagliamento Tel. (045) 6862896 Telefax (0432) 69585 Telefax (0432) 512470 Via Venudo, 15 Telefax (045) 7732655 • 33027 Paularo del Friuli • 33100 Udine - Branch no. 7 Tel. (0431) 521838 • 37063 Isola della Scala Via S. Sbrizzai, 12 Via Anton Lazzaro Moro, 8 Telefax (0431) 521801 Via Marconi, 13 Tel. (0433) 71056 Tel. (0432) 229362 • 30027 San Donà di Piave Tel. (045) 7300142 Telefax (0433) 71062 Telefax (0432) 229354 Corso Silvio Trentin, 75 Telefax (045) 7301043 • 33040 Povoletto • 33100 Udine - Branch no. 8 Tel. (0421) 332188 • 37017 Lazise Via Ermes di Colloredo, 30 Viale Vat, 109 Telefax (0421) 332180 Loc. La Pezza, 4/B Tel. (0432) 679217 Tel. (0432) 471693 • 30036 Santa Maria di Sala Tel. (045) 7581318 Telefax (0432) 664270 Telefax (0432) 471721 Via Cavin di Sala, 53 Telefax (045) 7581286 • 33050 Pozzuolo • 33100 Udine - Branch no. 9 Tel. (041) 5760235 • 37045 Legnago Via della Cavalleria, 13 Piazzale XXVI Luglio, 62 Telefax (041) 5760234 Via Duomo, 17 Tel. (0432) 665050 Tel. (0432) 534378 • 300367 Scorzè Tel. (0442) 603245 Telefax (0432) 669788 Telefax (0432) 534075 Via Venezia, 33 Telefax (0442) 602414 • 33040 Pradamano • 33100 Udine - Branch no. 10 Tel. (041) 5841932 • 37054 Nogara Via I Maggio, 62 Via Pradamano, 41/B Telefax (041) 5840962 Via Maso, 3 Tel. (0432) 670688 Tel. (0432) 526153 • 30019 Sottomarina di Chioggia Tel. (0442) 510749 Telefax (0432) 671201 Telefax (0432) 524363 Viale Veneto, 20 Telefax (0442) 89581 • 33040 Premariacco Province of Varese Tel. (041) 5500995 • 37019 Peschiera del Garda Piazza Marconi, 9 • 21052 Busto Arsizio Telefax (041) 5501102 Via Risorgimento 5/B Tel. (0432) 729867 Via Zappellini, 17 • 30039 Stra Tel. (045) 6401612 Telefax (0432) 729868 Tel. (0331) 677293 P.zza O. Tombolan Fava Telefax (045) 7552340 • 33038 San Daniele Telefax (0331) 670843 Tel. (049) 9801544 • 37047 Prova di S. Bonifacio Via Garibaldi, 11 Province of Venice Telefax (049) 9801536 Via Prova, 47/C Tel. (0432) 940906 • 30020 Bibione • 30020 Stretti di Eraclea Tel. (045) 6101544 Telefax (0432) 940924 Corso del Sole, 49 Via Cadorna, 21 Telefax (045) 6102079 • 33048 San Giovanni al Natisone Tel. (0431) 437418 Tel. (0421) 316500 • 37034 Quinto di Valpantena Piazzetta Brazzà, 5 Telefax (0431) 437207 Telefax (0421) 316496 Via Valpantena, 31 Tel. (0432) 743296 • 30021 Caorle • 30125 Venice Rialto Tel. (045) 8700769 Telefax (0432) 756331 Via Strada Nuova, 30 S. Polo 370/371 (Campo Beccarie) Telefax (045) 8700818 • 33050 San Vito al Torre Tel. (0421) 212429 Tel. (041) 5210722 • 37056 Salizzole Via Roma, 27 Telefax (0421) 211153 Telefax (041) 5205987 Via Roma, 53 Tel. (0432) 997001 • 30020 Cinto Caomaggiore • 30125 Venice S. Croce Tel. (045) 6901444 Telefax (0432) 997727 Via Roma, 125 S. Croce (Sestiere), 509 Telefax (045) 6901448 • 33017 Tarcento Tel. (0421) 241274 Tel. (041) 2770530 • 37035 San Giovanni Ilarione Via Garibaldi, 2 Telefax (0421) 241254 Telefax (041) 2412053 Via Ca’ Rosse, 32 Tel. (0432) 783915 • 30020 Marcon • 30124 Venice S. Marco Tel. (045) 7465200 Telefax (0432) 783923 Via Alta, 55 Calle Goldoni, 4403 Telefax (045) 7465233 • 33018 Tarvisio Tel. (041) 5950663 Sestiere di S. 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Tel. 00387-33-250010 Telefax (0442) 490559 Namestie SNP 15 Swift: VBSA BA 22 • 37067 Valeggio sul Mincio Central - Hong Kong SK-81000 Bratislava Tel. 00852-21472955 Mr. Edin Zeco P.zza Vittorio Veneto, 5/C Slovakia • Zagabria Telefax 00852-21472997 Tel. 00421-2-59211132 Tel. (045) 7952226 Volksbank D.D. Telefax (045) 6370620 • Shanghai Swift LUBA SK BX • 37122 Verona Ms. Tatiana Sterbova Varšavska 9 Unit 3307b, The Center, HR-10000 Zagreb - Croazia Corso Cavour, 29 No. 989 Changle Road, • Bucharest Tel. (045) 8057611 Volksbank Romania S.A. Tel. 00385-1-6001257 Telefax (045) 8031242 Xuhui District, Shanghai Apolodor Street 42 District 5 Swift: VBCR HR 22 • 37138 Verona - Branch no. 1 P.R. China RO 050741 - Bucharest - Romania Ms. Sandra Posic´ Corso Milano, 114 Postcode: 200030 Tel. 004021-4056530 Tel. (045) 8101088 Tel. (86.21) 540754455, 54075456 Swift VBBU RO BU Telefax (045) 8100953 Telefax (86.21) 54075457 Mr. Angelo Manera • 37135 Verona - Branch no. 2 • Budapest ASSOCIATED BANKS Largo Perlar, 8/10 • New Delhi Magyarorszagi Volksbank Zrt 1510-12, Narain Manzil • Beograd Tel. (045) 502090 R ák óczi ut 7 Volksbank A.D. Telefax (045) 506693 23 Barakhamba Road, H-1088 Budapest - Ungheria Bulevar M. Pupina, 165g • 37131 Verona - Branch no. 3 New Delhi, India Tel. 0036-1-3286677 Via del Capitel, 3/D Swift MAVO HU HX RS-11070 Beograd Postcode: 110001 Serbia Tel. (045) 524635 Tel. +91-11-41524344/41524345 Ms. Krisztina Feher Telefax (045) 8402458 • Ljubljana Tel. 00381-11-2017052 • 37126 Verona - Branch no. 4 Telefax +91-11-41524346 Volksbank-Ljudska Banka D.D. Swift: VBOE CS BG Via Todeschini, 19 Dunajska 128A Ms. Gordana Mati ć Tel. (045) 8350985 SLO-1000 Ljubljana - Slovenia • Sliema Telefax (045) 8350692 Tel. 00386-1-5307596 Volksbank Malta LTD • 37100 Verona - Branch no. 5 Swift SLBV SI 2X Dingli Street, 53 SUBSIDIARY BANKS ˇ Via Mameli, 152/A Mr. Tadej Senk SLM 09 Sliema - Malta Tel. (045) 8309088 • Dublin • Praga BPV Finance (International) P.l.c. Tel. 00356-234-94211 Telefax (045) 8309153 Volksbank CZ A.S. Swift: VBMA MT M3 KBC House - 4 George’s Dock Lazarska 8/13 • 37047 Villabella di S. Bonifacio Ms. Jeannette Apap Crosaron di Villabella, 18 IFSC - International Financial CZ-12000 Praha 1 - Repubblica Ceca Tel. (045) 7613822 Tel. 00420-234-706827 • Lviv Service Centre - Dublin (Ireland) Elektron Banka Telefax (045) 7613647 Tel. 00353-1-6720630 Swift: VBOE CZ 2X • 37062 Villafranca Fr. Dossobuono Mr. Giorgio Migliorini Grabovskogo, 11 Via Cavour, 71 Telefax 00353-1-6720633 • Sarajevo UA - 79000 LVIV Tel. (045) 8600642 Swift BPVIIE21 Volksbank BH D.D. Tel. 00420-221-969916 Telefax (045) 8600150 E-mail: [email protected] Fra Anðela Zvizdovi ća 1 Mr. Karl Schlagenhaufen

384 385 Stampa: Tipografia Rumor S.r.l., Vicenza 384 385 Gruppo Banca Popolare di Vicenza