Consolidated interim report on operations as at September Consolidated interim report on operations as at September Banca popolare dell’Emilia Romagna Cooperative Bank with head office in Modena Via San Carlo, $% Tel. ( (% – Fax ( (% Bank Registration no. ,( ABI code $/-1 Parent Company of Banca popolare dell’Emilia Romagna Banking group Registered in the Register of Banking Group with code $/.1, since / August (( http:%%www.bper.it - e-mail: [email protected] Tax code, VAT number and Business Register no. 1 Modena Chamber of Commerce no. $ Share capital as at %%, € ,,,,(,. Member of the Interbank Deposit Guarantee Fund Ordinary shares listed on the MTA market Consolidated interim report on operations as at September Directors and officers of the Parent Company at the date of approval of the Consolidated interim report on operations as at September page Group interim report on operations as at September page / Consolidated financial statements Consolidated balance sheet as at September page $/ Consolidated income statement as at September page $$ Statement of consolidated comprehensive income page $( Statement of changes in consolidated shareholders' equity page ( Explanatory notes Form and content of the consolidated interim report as at September page ( Information on the consolidated balance sheet page Information on the consolidated income statement page Information on risks and related hedging policy page / Information on the consolidated shareholders' equity page ,/ Attachments Financial statements of the Parent Company Balance sheet of the Parent Company as at September page 1 Income statement of the Parent Company as at September page 1 Income statement of the Parent Company by quarter as at September page 1 Statement of changes in shareholders' equity of the Parent Company page 1, Pro -forma income statement of the Parent Company as at September , page 1 Certifications and other reports Certification of the Manager responsible for preparing the Company's financial reports page 1( Consolidated interim report on operations as at September Directors and officers of the Parent Company Directors and officers of the Parent Company as at the date of approval of the Consolidated interim report on operations as at Septem ber Board of Directors Chairman: Ettore Caselli Deputy chairmen: * Alberto Marri * Giosuè Boldrini * Luigi Odorici Chief Executive Officer: * Alessandro Vandelli Directors: Antonio Angelo Arru Mara Bernardini Giulio Cicognani Cristina Crotti * Pietro Ferrari Elisabetta Gualandri Giovampaolo Lucifero Giuseppe Lusignani Roberto Marotta Valeriana Maria Masperi Daniela Petitto * Deanna Rossi Angelo Tantazzi * Members of the Executive Committee Board of Statutory Auditors Chairman: Antonio Mele Acting Auditors: Carlo Baldi Francesca Sandrolini Vincenzo Tardini Diana Rizzo Substitute Auditors: Giorgia Butturi Gianluca Spinelli Consolidated interim report on operations as at September Directors and officers of the Parent Company Board of Arbiters Members: Miranda Corradi Marcello Minutolo Paolo Casarini Roberto Bernardi Cesare Busi Substitute members: Federico Ferrari Amorotti Massimo Turchi Pier Luigi Cerutti General Management General Manager: Fabrizio Togni Deputy General Managers: Eugenio Garavini Pierpio Cerfogli Gian Enrico Venturini Manager responsible for preparing the company's financial reports Manager responsible for preparing the company's financial reports: Emilio Annovi Independent Auditors PricewaterhouseCoopers s.p.a. 1 Consolidated interim report on operations as at September Interim report on operations Group interim report on operations as at September / Consolidated interim report on operations as at September Interim report on operations Contents Introduction . Key figures . BPER Group structure as at September . Summary of results . Performance ratios ., Summary schedules . Significant events and strategic transactions . Strategic transactions . The BPER Group's -/ Business Plan . European Single Supervisory Mechanism (SSM) ., Structured finance transactions . Recovery of non -performing loans: securitisations and other financial transactions .1 Other significant events . Scope of consolidation of the BPER Group . Composition of the BPER Group as at September . Changes in the scope of consolidation ,. Results of operations ,. Balance sheet aggregates ,. Own Funds and capital ratios ,. Reconciliation of consolidated net profit%shareholders' equity ,., Income statement aggregates ,. BPER Group employees ,.1 Geographical organisation of the BPER Group . Other information . Treasury shares . Share price performance . Ratings as at September ., Investigations and audits . Main litigation and legal proceedings pending 1. Significant subsequent events and outlook for operations 1. Subsequent events 1. Outlook for operations ( Consolidated interim report on operations as at September Interim report on operations Introduction The third quarter of saw the world economy continue to grow at a generally modest and uneven rate. Complicating matters was, above all, fears about a more pronounced slowdown in emerging countries than the forecasts made by economists in the first half of . The most worrying alarm came from China where, after the collapse of the stock exchange, the local authorities took a series of decisions that have fuelled serious doubts in the markets about the real extent to which the Asian dragon's economy was putting on the brakes. All of this has naturally weighed negatively on future estimates of growth in the world economy, where developing countries as a whole now play a much more important role than a few years ago. As for the individual macro areas, even if the Eurozone has enjoyed favourable conditions for several months now (weakness of the euro, low cost of raw materials and ultra-expansionary monetary policies), once again in this last quarter it has struggled to take a path of lasting and sustainable growth. The Greek problem has been shelved, at least for the time being, though one was hoping for more comforting numbers. Even if exports have shown encouraging signs (as has consumption), the main worry is the continued weakness in capital investment which to a certain extent is a feature of all Eurozone countries. France and Italy are struggling to shake off the economic stagnation that has been holding them back for some time now. Germany, the Eurozone's leading economy and the one potentially able to pull it out of this situation, being the European country that is the most commercially exposed to China, has had to deal more than anyone else with this fear of an excessive slowdown by the Asian giant. Germany has also been overwhelmed by the recent Volkswagen scandal, the extent of which is still difficult to define, though it is likely to deal a heavy blow to the economy and the entire country's reputation for reliability. Overseas, the numbers have been more comforting in the USA. Despite the fact that the last three months have confirmed a certain weakness in the manufacturing sector, held back, above all, by the strength of the dollar, the figures have continued to convince in other sectors of the economy (services, consumer spending, the labour market, the housing market, etc.). It was no coincidence that the official growth rate for the second quarter of (.(F q%q annualised) was a nice surprise, confirming the robustness of the US economy. With regard to emerging countries, as we mentioned previously, the last few months have been somewhat delicate. The Chinese stock market crash and the subsequent action taken by local authorities to try and stem the tide, and the sudden decision to devalue the Renminbi, the local currency, in mid- August, have generated several doubts about the ability of the PBOC, the Chinese Central Bank, to manage the situation effectively. What's more, the official statistics on the country's rate of growth, issued by the National Statistics Office, have fed suspicions about their reliability on the part of analysts and economists; hence the fears of a more violent slowdown in the Asian giant than previously estimated, with heavy consequences for the rest of the world and, in particular, for any country directly or indirectly tied to China. Also complicating the picture of emerging countries is the delicate situation of two major economies, Russia and Brazil, that have been experiencing months of recession, and the overall capital outflow from the area in question that has been taking place generally. Consolidated interim report on operations as at September Interim report on operations For their part, not even in the third quarter of have Central Banks collectively changed their orientation, remaining essentially very accommodating. As we have seen, the Central Bank of China made its policy even more expansionary in order to support the markets and the economy; even the Fed, which was expected to apply its first monetary tightening in September, decided not to intervene, but rather to postpone yet again the start of interest rate hikes, precisely because of the danger posed by emerging countries as a brake on global growth. The Eurozone (BCE) and Japan (BOJ) have naturally continued their existing plans of quantitative easing. However, despite the persistence of these ultra-expansionary monetary policies, inflation in the main developed areas (USA, Eurozone and Japan) has continued, also in recent months, to remain well below the target set by the various Central Banks. As regards