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 Internet: http://www.creval.it E-mail: [email protected] Data as at 31/12/2010: Share Capital EUR 824,759,477.50 – Reserves EUR 1,259,366,028 Member of the Interbank Guarantee Fund Interim Report on Operations as at 31 March 2011 WorldReginfo - de9b3879-94f4-4452-868a-aca6471170c0 Company Officers of Credito Valtellinese Board of Directors Chairman • Giovanni De Censi Substitute Vice Chairman Angelo Maria Palma Vice Chairman • Giuliano Zuccoli Managing Director • Miro Fiordi Directors Fabio Bresesti • Gabriele Cogliati Michele Colombo • Paolo De Santis Aldo Fumagalli Romario Paolo Stefano Giudici Gian Maria Gros Pietro • Franco Moro Valter Pasqua • Alberto Ribolla Paolo Scarallo • Members of the Executive Committee Board of Statutory Auditors Chairman Angelo Garavaglia Permanent Auditors Marco Barassi Alfonso Rapella Substitute Auditors Aldo Cottica Edoardo Della Cagnoletta Panel of Arbitrators Permanent Arbitrators Emilio Berbenni Francesco Bertini Emilio Rigamonti Substitute Arbitrators Adriano Bassi Silvano Valenti General Management General Manager Miro Fiordi Co-General Manager Luciano Camagni Vice General Manager Umberto Colli Vice General Manager Mauro Selvetti Vice General Manager Enzo Rocca Manager in charge of preparing the corporate accounting documents Simona Orietti Independent statutory auditing firm Reconta Ernst & Young S.p.A. 2 WorldReginfo - de9b3879-94f4-4452-868a-aca6471170c0 3 WorldReginfo - de9b3879-94f4-4452-868a-aca6471170c0 Contents CONSOLIDATED FINANCIAL AND ECONOMIC HIGHLIGHTS AND ALTERNATIVE PERFORMANCE INDICATORS AS AT 31 MARCH 2011 ................................................................................................. 5 ORGANISATIONAL MODEL AND BREAKDOWN OF THE CREDITO VALTELLINESE BANKING GROUP ...... 7 MANAGEMENT PERFORMANCE DURING THE QUARTER ........................................................................ 9 ECONOMY AND FINANCIAL MARKET TRENDS .............................................................................. 9 SIGNIFICANT EVENTS DURING THE QUARTER ........................................................................... 12 THE GROUP'S OPERATIONAL STRUCTURE ................................................................................. 14 RECLASSIFIED CONSOLIDATED FINANCIAL STATEMENTS .................................................... 16 COMMENTS ON THE FINANCIAL STATEMENTS .......................................................................... 18 SIGNIFICANT EVENTS OCCURRING AFTER THE CLOSE OF THE QUARTER .......................................... 19 BUSINESS OUTLOOK .......................................................................................................................... 19 NOTES TO THE FINANCIAL STATEMENTS ............................................................................................ 20 DECLARATION OF THE MANAGER IN CHARGE OF DRAWING UP THE CORPORATE ACCOUNTING DOCUMENTS ....................................................................................................................................... 21 4 WorldReginfo - de9b3879-94f4-4452-868a-aca6471170c0 CONSOLIDATED FINANCIAL AND ECONOMIC HIGHLIGHTS AND ALTERNATIVE PERFORMANCE INDICATORS AS AT 31 MARCH 2011 BALANCE SHEET DATA 31/03/2011 31/12/2010 % change 31/03/2010 % change (in thousands of EUR) Loans to customers 22,425,856 22,004,043 1.92 20,618,047 8.77 Financial assets and liabilities 1,583,594 1,458,423 8.58 616,941 156.68 Investments in associates and companies 217,097 230,079 -5.64 246,507 -11.93 subject to joint control Total assets 27,269,394 26,760,794 1.90 25,260,471 7.95 Direct deposits from customers 21,840,887 21,664,000 0.82 20,647,631 5.78 Indirect deposits from customers 12,748,302 12,609,464 1.10 12,909,931 -1.25 of which: - Managed savings 5,830,317 6,008,353 -2.96 6,206,214 -6.06 Total deposits 34,589,189 34,273,464 0.92 33,557,562 3.07 Shareholders’ equity 2,043,798 2,002,868 2.04 1,929,809 5.91 FINANCIAL STATEMENT RATIOS 31/03/2011 31/12/2010 Indirect deposits from customers / Total deposits 36.9% 36.8% Managed savings / Indirect deposits from customers 45.7% 47.6% Direct deposits from customers / Total liabilities 80.1% 81.0% Customer loans / Direct deposits from customers 102.7% 101.6% Customer loans / Total assets 82.2% 82.2% CREDIT RISK 31/03/2011 31/12/2010 % change Net doubtful loans (in thousands of EUR) 481,188 464,538 3.58 Other net doubtful loans (in thousands of EUR) 867,485 757,541 14.51 Net doubtful loans / Loans to customers 2.1% 2.1% Other net doubtful loans / Loans to customers 3.9% 3.4% Hedging of doubtful loans 60.0% 60.4% Hedging of other doubtful loans 7.2% 7.2% Cost of credit (*) 0.60% 0.61% (*) Calculated as the ratio between the net value adjustments due to deterioration of loans and year-end loans. ORGANISATIONAL DATA 31/03/2011 31/12/2010 % change 31/03/2010 % change Number of employees 4,515 4,514 0.02 4,412 2.33 Number of branches 543 543 0.00 518 4.83 Banc@perta line users 168,027 160,494 4.69 144,954 15.92 5 WorldReginfo - de9b3879-94f4-4452-868a-aca6471170c0 % INCOME STATEMENT DATA Q1 2011 Q1 2010 change Interest margin 125,916 118,765 6.02 Net fee and commission income 75,186 66,744 12.65 Operating income 215,269 198,071 8.68 Operating expenses (137,164) (133,029) 3.11 Net income from banking activities 78,105 65,042 20.08 Net losses/recoveries on impairment of loans and other financial assets (33,577) (22,160) 51.52 Income (loss) before tax from continuing operations 45,239 42,377 6.75 Income after tax from continuing operations 26,008 24,220 7.38 Net income 22,392 20,476 9.36 OTHER ECONOMIC INFORMATION Q1 2011 2010 Q1 2010 Cost/Income ratio 63.7% 64.9% 67.2% 6 WorldReginfo - de9b3879-94f4-4452-868a-aca6471170c0 ORGANISATIONAL MODEL AND BREAKDOWN OF THE CREDITO VALTELLINESE BANKING GROUP The Credito Valtellinese Banking Group consists of territorial banks, specialised finance companies and special purpose companies for the provision of services - with a view to achieving synergies and economies of scale - to all the companies of the Group. [*] Company subject to management and coordination by the Parent Company pursuant to Articles 2497 et sequitur of the Italian Civil Code, not included in the banking group as it is an insurance company) The Organisational Model of the Group, defined a “company network” model, assigns the reference market share to the territorial banks and the required operating support to the specialised finance and special-purpose companies. Therefore, it is based on the full enhancement of the distinctive skills of each member, with the purpose of achieving the maximum efficiency and competitiveness, on their functional and operational correlation, on the adoption in the corporate process management of the same rules and methods. This allows to overcome size restrictions and fully benefit from the advantage of proximity with regard to the areas of choice, combining effectively specialisation and flexibility, production and distribution functions. As at 31 March 2011, the Credito Valtellinese Group is present on the national territory with a network of 543 Branches, in ten regions, through the territorial banks characterising the “Market Area”, each focused exclusively on the specific areas of origin: - Credito Valtellinese S.c., parent company, present with its network of 128 branches in Lombardia, in the provinces of Sondrio, Lecco, Como, Varese, Bergamo, and in Trentino Alto Adige. - Credito Artigiano S.p.A., with 144 branches is present in Lombardia - in Milan and in the provinces of Monza and Brianza, Pavia, Cremona and Lodi - in Piacenza, in Toscana - in the areas of Firenze and Prato in addition to Lucca, Pisa and Pistoia - as well as in Lazio, Roma, Grottaferrata and Pomezia. - Credito Siciliano S.p.A., covers the whole of Sicilia with a total of 136 branches and Roma, with a branch dedicated to loan against pledge. - Banca dell’Artigianato e dell’Industria S.p.A., present in the provinces of Brescia, Padova, Verona and Vicenza with 37 branches. 7 WorldReginfo - de9b3879-94f4-4452-868a-aca6471170c0 - Credito Piemontese S.p.A., with a network of 29 branches, all in the cisalpine region. - Carifano – Cassa di Risparmio di Fano S.p.A, with a significant presence in the Marche region, in addition to the provinces of Forlì-Cesena, Rimini and Perugia, through a network of 45 branches. - Banca Cattolica S.p.A. is present in the provinces of Viterbo and Terni with 9 branches. - Credito del Lazio S.p.A. is present with 15 branches in the province of Frosinone, Latina and Roma. The following companies characterise the “Specialised Finance Segment”: - Bancaperta S.p.A., financial centre of the Group, bank specialised in financial asset management services, private banking, as well as real estate financial services and centralised group treasury management. This bank controls: Aperta SGR S.p.A., an asset management company. Lussemburgo Gestioni S.A., Luxembourg-based management company, specialising in the management and administration of UCIs. Global Assicurazioni S.p.A. is a multifirm insurance agency acting as partner in the bancassurance sector and, more in general, in the sales network distribution of standard insurance policies.1 Global Broker S.p.A. company specialised in the insurance sector targeting the SME