BANCA MONTE DEI PASCHI DI SIENA Consolidated interim report as at 31 March 2015 WorldReginfo - a663e38c-5709-4000-839f-622ad7b42c35 1 CONSOLIDATED INTERIM RESULTS ON OPERATIONS AS AT 31 MARCH 2015 Banca Monte dei Paschi di Siena S.p.a. Share capital: € 12,484,206,649.08 fully paid in Siena Companies' Register no. and tax code 00884060526 Member of the Italian Interbank Deposit Protection Fund. Banks Register no. 5274 Monte dei Paschi di Siena Banking Group, registered with the Banking Groups Register BANCA MONTE DEI PASCHI DI SIENA WorldReginfo - a663e38c-5709-4000-839f-622ad7b42c35 2 CONSOLIDATED INTERIM RESULTS ON OPERATIONS INTERIM CONSOLIDATED REPORT ON OPERATIONS ................................................................................. 3 INTERIM CONSOLIDATED FINANCIAL STATEMENTS ............................................................................... 67 EXPLANATORY NOTES .................................................................................................................................... 80 DECLARATION OF THE FINANCIAL REPORTING OFFICER .................................................................... 204 AUDITORS’ REVIEW REPORT ON THE INTERIM CONSOLIDATED FINANCIAL STATEMENTS ............ 206 ANNEXES .......................................................................................................................................................... 209 CONSOLIDATED INTERIM REPORT WorldReginfo - a663e38c-5709-4000-839f-622ad7b42c35 3 Interim Consolidated Report on Operations Basis of preparation ............................................................................................................... 4 Group Profile and business model ........................................................................................ 5 Strategy ................................................................................................................................ 11 Events, actions and performance ........................................................................................ 14 Analysis of the key economic-financial indicators .............................................................. 19 Analysis of the key non-financial capital ............................................................................. 54 Annexes ............................................................................................................................... 64 BANCA MONTE DEI PASCHI DI SIENA WorldReginfo - a663e38c-5709-4000-839f-622ad7b42c35 Interim Consolidated Report on Operations 4 Basis of preparation The Interim Report on Operations as at 31 March 2015 provides a snapshot of the activities and results which largely characterised the Montepaschi Group’s operations in the first quarter, both as a whole and in the various business sectors into which consolidated operations are organised. In particular, the economic and financial indicators, based on accounting data, are those used in the internal systems of performance management and management reporting and are consistent with the most commonly used metrics within the banking industry in order to ensure the comparability of figures presented. In addition, the Report incorporates non-financial company information providing the details on the activities, capital, risks and relations that are significant to the Group’s current and future performance. This document highlights the key developments with respect to the year-end Report, to which the reader is referred for a more complete overview of the topics. CONSOLIDATED INTERIM REPORT WorldReginfo - a663e38c-5709-4000-839f-622ad7b42c35 5 Interim Consolidated Report on Operations Group Profile and business model Overview Breakdown as at 31/03/2015 The Montepaschi Group (hereinafter referred to as the “Group”) is the Employees 25,763 banking hub led by Banca Monte dei Branches (Italy) 2,185 Paschi di Siena, which does business Customers 5,310,056 primarily in Italy, mainly providing traditional retail & commercial banking Total assets (mln €) 187,525 services (around 70% of total revenues). Shareholders' equity (mln €) 6,471 The Group is also active through its Total Revenues (mln €) 1,267 specialised product companies in business areas such as leasing, factoring, corporate finance, investment banking and consumer credit. Breakdown of Group revenues by key business area as at 31/03/2015 The insurance-pension sector is covered 1.2% 0.9% 1.8% by a strategic partnership with AXA 69.3% - Retail and commercial banking 3.1% 6.7% while asset management activities are 17.0% - Investment banking and proprietary finance based on the offer of investment 3.1% - Consumer lending products of independent third parties. 17.0% 1.8% - Foreign banking The Group combines traditional services 1.2% - Corporate finance 69.3% offered through the network of branches 0.9% - Leasing and factoring and specialised centres with an innovative 6.7% - Other self-service and digital services system enhanced by the skills of the network of The chart does not include cancellation of intragroup entries. financial advisors. Foreign banking operations are focused on supporting the internationalisation processes of Italian corporate clients in all major foreign financial markets as well as some emerging countries that have business relations with Italy. Back office activities, administrative, accounting and other services (e.g. accounts payable) are outsourced to Fruendo (the joint venture between Bassilichi Spa and Accenture Italia). BANCA MONTE DEI PASCHI DI SIENA WorldReginfo - a663e38c-5709-4000-839f-622ad7b42c35 Interim Consolidated Report on Operations 6 Business model The Bank has launched a radical transformation in the “way of banking”, and therefore in its own business model. The model requires improvement in the capital and financial structure as well as the application of sound principles of value and corporate governance, which the Bank has reinforced in response to specific systemic problems of recent years. The capabilities and skills to guide this change have been deployed, and focus has been placed on the customer, customer relations, quality, efficiency and all intangible and non-financial capital, the real drivers of business development, which the Bank intends to pursue by aiming for sustainable growth for the benefit of all stakeholders. BUSINESS MODEL CAPITAL ACTIVITIES EXPECTED RESULTS Financial capital Business Income statement and financial results Lending and traditional banking Sustainable profitability activities, with a focus on advisory services Adequate capital quality and quantity Private banking Brokerage of products of qualified business partners in the bancassurance (AXA), asset management (Anima) and consumer credit (Compass) segments Digital banking, self-service and financial advisory services Leasing and factoring Non-financial capital Processes Generation of shared value Customer base Listening, knowing the customer and Customer satisfaction focus on services Human capital Employee motivation, satisfaction and (Skills, DNA and values, Diversity) Human resource development productivity Structural capital Optimisation of operations Moderation and limitation of waste (Distribution network, Remote banking channels, Operating apparatus Corporate citizenship and solidarity Value of the brand and public opinion and processes) Economic/social value in local Relationship capital communities (System of relations with stakeholders) Reputational capital (Brand, Reputation) GOVERNANCE AND VALUES Governance and control systems, Prudent approach to risk, Long-term vision, Orientation to change, Ethics and legality, Central focus on customers, Social responsibility CONSOLIDATED INTERIM REPORT WorldReginfo - a663e38c-5709-4000-839f-622ad7b42c35 7 Interim Consolidated Report on Operations Shareholders As at 31 March 2015, the Bank’s share capital amounts to EUR 12,484,206,649, broken down into 5,116,513,875 ordinary shares. The Bank’s major shareholders (holding more than 2% of the share capital) hold a total of 15.61% of the share capital (12.27% as at 31 December 2014 and 18.48% as at 31 March 2014). Breakdown of Bmps share capital as at 31th March 2015 Fintech Advisory Inc.* - 4.50% UBS Group AG * - 3.44% AXA S.A.** - 3.17% Fondazione Monte dei Paschi di Siena - 2.50% BTG Pactual Europe LLP - 2.00% Other shareholders (less than 2%) - 84.39% * Shareholding through Companies belonging to its Group ** Shareholding on own behalf and through Subsidiaries Compared to the share capital structure as at the end of 2014, note the increase of UBS Group AG with a shareholding of 3.44%. Governance & Control systems Corporate Governance For the Group, the relevance of corporate governance goes beyond its traditional technical meaning, i.e. a set of coordinated rules and structures governing relations amongst shareholders and between them and the directors and top management. In line with the Bank’s mission, it is seen as a tool for relations with all stakeholders. The overall corporate governance system makes reference to the Corporate Governance Code of listed companies issued by the Italian Stock Exchange, thereby ensuring: a clear delineation of roles and responsibilities, the appropriate separation of powers, balanced composition of the corporate bodies, effective controls, monitoring of all business risks, adequacy of information flows and the company's social responsibility. For a complete description of the structure and operations of the corporate governance system, please refer to