2007 REPORTS AND FINANCIAL STATEMENTS 2 Credito Valtellinese Società Cooperativa Registered Offices in Piazza Quadrivio 8 — Sondrio, Italy Tax code and Sondrio Company Register No. 00043260140 — Register of Banks No. 489 Parent Company of the Credito Valtellinese Banking Group — Register of Banking Groups No. 5216.7 Web address: http://www.creval.it E-mail: [email protected] Data as at 31/12/2007: Share Capital EUR 562,060,674 – Reserves EUR 923,576,649 REPORTS AND FINANCIAL STATEMENTS AS AT 31 DECEMBER 2007 4 REPORTS AND CONSOLIDATED FINANCIAL STATEMENTS OF THE CREDITO VALTELLINESE BANKING GROUP - Highlights and Financial Statement Ratios of the Group - Creval Group organisational model - Company Officers of Creditor Valtellinese - Notice of Call - Chairman’s Letter BOARD OF DIRECTORS’ REPORT ON GROUP OPERATIONS MACROECONOMIC REFERENCE CONTEXT MAP OF THE GROUP AND THE AREA OF JOINTLY CONTROLLED AND ASSOCIATED COMPANIES MANAGEMENT PERFORMANCE IN THE PERIOD - ANALYSIS OF THE MAIN BALANCE SHEET AGGREGATES MANAGEMENT PERFORMANCE IN THE PERIOD - ANALYSIS OF THE MAIN INCOME STATEMENT AGGREGATES STRATEGIC PLAN OBJECTIVES AND RESULTS FOR THE PERIOD ANALYSIS OF RESULTS AND OPERATIONS BY BUSINESS SEGMENT HUMAN RESOURCES MANAGEMENT AND NEW LEGISLATION QUALITY AND SOCIAL RESPONSIBILITY RATINGS OF THE CREVAL GROUP COMPANIES STOCK MARKET PERFORMANCE OF LISTED SECURITIES AND FINANCIAL INDICATORS HIGHLIGHTS FOR THE SUBSIDIARIES AUDIT SIGNIFICANT EVENTS OCCURRING AFTER THE CLOSE OF THE FINANCIAL YEAR BUSINESS FORECAST CLOSING REMARKS CONSOLIDATED FINANCIAL STATEMENTS CONSOLIDATED BALANCE SHEET CONSOLIDATED INCOME STATEMENT STATEMENT OF CHANGES IN CONSOLIDATED SHAREHOLDERS’ EQUITY CONSOLIDATED CASH FLOW STATEMENT – DIRECT METHOD NOTES TO THE CONSOLIDATED FINANCIAL STATEMENTS PART A – ACCOUNTING POLICIES PART B – INFORMATION ON THE CONSOLIDATED BALANCE SHEET 5 PART C – INFORMATION ON THE CONSOLIDATED INCOME STATEMENT PART D – SEGMENT REPORTING PART E – INFORMATION ON RISKS AND HEDGING POLICIES PART F – INFORMATION ON CONSOLIDATED EQUITY PART G – BUSINESS COMBINATIONS PART H – TRANSACTIONS WITH RELATED PARTIES PART I – SHARE-BASED PAYMENTS OTHER DOCUMENTS CONSOLIDATED FINANCIAL STATEMENTS DISCLOSURE PURSUANT TO ART 81-TER OF CONSOB REGULATION NO. 11971 OF 14 MAY 1999, AS AMENDED INDEPENDENT AUDITORS’ REPORT 6 CREDITO VALTELLINESE REPORT AND FINANCIAL STATEMENTS - Highlights and Financial Statement Ratios BOARD OF DIRECTORS’ REPORT ON OPERATIONS PARENT COMPANY CENTENARY MANAGEMENT PERFORMANCE IN THE PERIOD - ANALYSIS OF THE MAIN BALANCE SHEET AGGREGATES MANAGEMENT PERFORMANCE IN THE PERIOD - ANALYSIS OF THE MAIN INCOME STATEMENT AGGREGATES MANAGEMENT AND INSTITUTIONAL ASPECTS PROPOSALS TO THE SHAREHOLDERS’ MEETING CLOSING REMARKS SEPARATE FINANCIAL STATEMENTS BALANCE SHEET INCOME STATEMENT STATEMENT OF CHANGES IN EQUITY CASH FLOW STATEMENT – DIRECT METHOD NOTES TO THE FINANCIAL STATEMENTS PART A – ACCOUNTING POLICIES PART B – INFORMATION ON THE BALANCE SHEET PART C – INFORMATION ON THE INCOME STATEMENT PART D – SEGMENT REPORTING PART E – INFORMATION ON RISKS AND HEDGING POLICIES PART F – INFORMATION ON EQUITY PART G – BUSINESS COMBINATIONS PART H – TRANSACTIONS WITH RELATED PARTIES PART I – SHARE-BASED PAYMENTS OTHER DOCUMENTS REPORT OF THE BOARD OF STATUTORY AUDITORS TO THE SHAREHOLDERS’ MEETING CORPORATE GOVERNANCE REPORT SEPARATE FINANCIAL STATEMENTS DISCLOSURE PURSUANT TO ART 81-TER OF CONSOB REGULATION NO. 11971 OF 14 MAY 1999, AS AMENDED 7 INDEPENDENT AUDITORS’ REPORT ATTACHMENTS STATEMENT OF REVALUATIONS STATEMENT OF SIGNIFICANT EQUITY INVESTMENTS IN UNLISTED COMPANIES STATEMENT OF FEES PAID FOR INDEPENDENT AUDITOR SERVICES 8 Guide to consultation The Credito Valtellinese consolidated and separate financial statements as at 31 December 2007, with related accompanying documents, together form a true “information system”. They were prepared in accordance with IAS/IFRS international accounting standards adopted by the European Union, with format and information according to Bank of Italy Circular no. 262 of 22 December 2005, also taking into account CONSOB’s regulations for listed companies. This information system aims not only to meet formal legal requirements, but is also the means of informing Shareholders, the financial community and the general public as a whole of the bank and Group's operations. Consequently, in its detailed illustrations of the different management aspects, the document intends to represent corporate events for the 2007 financial year. To facilitate reading, the chapters are preceded by a brief note on the reference regulations and its objectives. We wish you pleasant reading. 9 REPORTS AND CONSOLIDATED FINANCIAL STATEMENTS OF THE CREDITO VALTELLINESE BANKING GROUP 10 Highlights and Financial Statement Ratios of the Group % BALANCE SHEET DATA 31/12/2007 31/12/2006 change (in thousands of EUR) Loans to customers 13,754,333 11,445,785 20.17% Financial assets and liabilities 1,346,699 1,329,898 1.26% Investments in associates and companies subject to joint control 201,690 166,830 20.90% Total assets 17,228,262 14,901,453 15.61% Direct deposits from customers 13,708,656 12,073,699 13.54% Indirect deposits from customers 12,137,335 12,370,896 -1.89% of which: - Managed savings 5,870,400 6,043,053 -2.86% Total deposits 25,845,991 24,444,595 5.73% Shareholders’ equity 1,576,655 881,859 78.79% BALANCE SHEET RATIOS 31/12/2007 31/12/2006 Indirect deposits from customers / Total deposits 47.0% 50.6% Managed savings / Indirect deposits from customers 48.4% 48.8% Direct deposits from customers / Total liabilities 79.6% 81.0% Customer loans / Direct deposits from customers 100.3% 94.1% Customer loans / Total assets 79.8% 76.3% Cost/Income ratio 58.6% 63.6% % CREDIT RISK 31/12/2007 31/12/2006 chang e Net impaired loans (in thousands of Euro) 186,582 180,392 3.43% Other net doubtful loans (in thousands of Euro) 212,540 202,065 5.18% Net impaired loans / Loans to customers 1.4% 1.6% Other net doubtful loans / Loans to customers 1.5% 1.8% Hedging of impaired loans 68.1% 68.3% Hedging of other doubtful loans 7.2% 7.7% 31/12/2 31/12/2 % FIGURES PER EMPLOYY (thousands of EUR, number of employees at year end) 007 006 change Operating income / Number of employees 195 178 9.55% Total assets / Number of employees 4,952 4,471 10.76% Personnel expenses / Number of employees 66 65 1.54% 31/12/2 31/12/2 % OTHER INFORMATION 007 006 change Number of employees 3,479 3,333 4.38% Number of branches 389 368 5.71% Banc@perta line users 106,717 95,247 12.04% 11 % INCOME STATEMENT DATA 2007 2006 change (in thousands of EUR) - Interest margin 445,974 347,375 28.38% Operating income 678,106 593,502 14.26% Operating costs -397,257 -377,374 5.27% Net income from banking activities 280,850 216,128 29.95% Income (loss) before tax from continuing operations 198,373 150,024 32.23% Income after tax from continuing operations 102,114 80,084 27.51% Net income for the period 85,773 68,614 25.01% 12 CREVAL GROUP ORGANISATIONAL MODEL Banca Credito Credito Credito Credito Market Artigianato Valtellinese Artigiano Siciliano Piemontese e Industria Bancaperta Aperta SGR Aperta Fiduciaria Specialised Finance Finanziaria San Creset Servizi Mediocreval Giacomo Territoriali Production Deltas Bankadati Stelline The Credito Valtellinese Group adopts a banking operations model based on the development of localisation and preferential relations with its customers and territory through a network formed from a series of local banks, specialised and complementary companies, enhanced by consolidated partnerships with qualified banking and financial organisations. Creval’s DNA, in fact, is based on the archetypal matrix of the cooperative bank. A hundred years after the Parent Company’s foundation, the philosophy behind corporate activities is still centred on territorial origins, so as to become a clear and constant reference point for the local community and to act in close synergy with its economic and social fabric. So as to soundly implement this vision, the Group has an organisational and corporate structure that includes companies focused on banking business, the provision of specialist financial services and support, with the aim of pursuing scale and specialist economies and high levels of service. The Creval Group operates in the reference territory through the following retail banks (the "Market Sector"): - Credito Valtellinese S.c., parent company, cooperative bank listed on the MTA market organised and managed by Borsa Italiana S.p.A., whose business is centred on principles of solidarity and strongly targeted to guaranteeing improved economic, cultural and social well-being in the reference territory. Credito Valtellinese’s distinguishing mark is its constant attention to the territory and to small-sized businesses. A historic trade name operating in the Italian provinces of Sondrio, Lecco, Como, Varese, Bergamo and Verbania, and with a total of 112 branches as at 31 December 2007. - Credito Artigiano S.p.A., established in 1946 in Milan. In 1995 it became a member of the Credito Valtellinese Group and was admitted to listing on the stock exchange in July 1999. As at the end of 2007, the Bank had 117 branches in Milan, Rome, Florence, Prato and, more recently, also in the provinces of Pavia, Pistoia and Novara. - Credito Siciliano S.p.A., a bank established in 2002 from the merger by incorporation of the Banca Popolare Santa Venere S.p.A. and Leasingroup Sicilia S.p.A. into Banca Regionale Sant’Angelo S.p.A. On 1 July 2002, Credito Siciliano also acquired the Cassa San Giacomo branch network to become one of the largest banks in Sicily. The Credito Siciliano mission is to actively participate in the economic and 13 collective development of the island through its own commercial network, present in all Sicilian provinces with a total of 136 branches. - Banca dell’Artigianato e dell’Industria S.p.A., established in Brescia at the end of 1997, on the initiative of an organising committee composed of local tradesmen, businessmen and professionals, with the aim of contributing to economic development in the Brescia area.