annual report 2007 -...

-Copertina e retro 27-05-2008 14:46 Pagina 2

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C M Y CM MY CY CMY K

A N N U A L R E P O R T 2 0 0 7

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Annual Report 2007

This is a summary version of the 2007 Financial Statements (Bilancio di Esercizio 2007) whose completeversion is avaible at www.centrobanca.it.


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Annual Report 20072


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Centrobanca: profile and description of operationsGruppo UBI corporate structure and Centrobanca company structureNational networkDevelopment strategy of CentrobancaImplementation of the industrial planNew organisational structure

Operational overviewLoansAssisted financeRisk Management & DerivativesInvestment BankingCapital MarketsAdvisory and Mergers & AcquisitionsEquity SalesPrivate Equity

Capital structureLoans to customersFinancial assetsShareholdingsLoan provisionsFinancial liabilitiesHedging derivatives

Economic trendInterest marginsOperating revenuesAdministrative expensesPersonnel CostsOther amministrative expencesNet value adjustments for loans and financial assets/liabilities impairmentTaxationIncome statement adjusted for non-recurring items

CapitalShare CapitalProposed allocation of profit for the periodRegulatory capital and capital requirements

Financial statementsBalance SheetIncome StatementReport on changes in net equity at 31 december 2007Cash flow statement indirect method

Company officers at 31 december 2007

Annual Report 2007 3

446779

1111121213141414141920222325252526272830303131323233333334353537384042

INDICE


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Centrobanca is the Corporate and Investment Bank of Gruppo UBI specialising in services to themid-upper corporate segment. As well as working directly with its own clients, the Bank is also thecentre of competence of UBI Banca for all Group Corporate and Investment Banking activities.

Centrobanca offers a complete and highly specialised range of products and services for business.

In the first part of 2007, the final steps were taken leading, on 1 April 2007, to the formation of GruppoUBI Banca, the result of the merger of Gruppo BPU Banca and Gruppo Banca Lombarda e Piemontese.

UBI Banca is the fifth largest banking group in Italy by number of branches, with a ca. 6% marketshare and a significant presence in some of the Italian regions offering the highest potential. UBIBanca is a cooperative Group listed on the Milan stock exchange and part of the S&P/MIB index.

Gruppo UBI Banca is made up as follows:� A listed cooperative Parent Company;� Nine banking networks: Banca Popolare di Bergamo, Banco di Brescia, Banca Popolare

Commercio e Industria, Banca Regionale Europea, Banca Popolare di Ancona, Banco di SanGiorgio, Banca Carime, Banca di Valle Camonica, UBI Banca Private Investment (a networkof financial agents);

� An internet bank: IW Bank.

The separate banking networks are all focused on their own geographical regions where they havea strong territorial presence and consolidated relationships with clients.

Supporting the separate banking networks are the product companies and the centres of competenceof Gruppo UBI Banca:

� corporate e investment banking: Centrobanca;� consumer credit: B@nca 24-7;� asset management: UBI Pramerica;� factoring: CBI Factor;� leasing: BPU Esaleasing and SBS Leasing;� bancassurance: UBI Assicurazioni and UBI Assicurazioni Vita.

There have been no changes in the corporate structure of Centrobanca in 2007: UBI Banca owns97.82% of Centrobanca (5.47% held through its subsidiary Banca Popolare di Ancona); the remainderof the share capital is subdivided among 30 banks, primarily “Popolari” (cooperative banks).

Annual Report 20074

CENTROBANCA:PROFILEAND DESCRIPTIONOF OPERATIONS

Gruppo UBI corporatestructure and the companystructure of Centrobanca

PrivateEquity

AssistedFinance

M&AAdvisory

Non performingLoans

StructuredFinance

IndustrialLending

Equity Salesand Trading

EquityResearch

CapitalMarkets

Derivatives

360 degree range of servicesfor medium sized companies


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Centrobanca holds shareholdings in other companies of the Group with the sole aim of carrying outits own business activities.

Centrobanca Sviluppo Impresa SGR - (100% owned). This subsidiary is engaged in private equity:it promotes, sets up, administers and manages closed-end property investment funds.

Group SRL - (shareholding 22.5%). A shareholding that is instrumental to the investment bankingoperations of the Bank. The company was established in 2005 and is owned with equal shares byBanca Aletti, Banca Akros and BIMER. Its aim is to gain more senior roles in public issues of securities.

Finanzattiva Servizi SrL - (shareholding 50%). This is a joint equal shareholding with UBI Pramerica.It provides information and back-office services for financial operations. It is currently being divestedto other companies within the Group.

IW Bank SpA - (shareholding 33.83%). This shareholding was acquired as part of the private equitybusiness. The company is specialised in trading, banking and on-line savings. It is a leader in on-line trading and amongst the leaders in e-banking and on-line financial services. The parent company,UBI, through its stake of 16.35% controls the bank. On 18 May the IPO of ordinary shares in thecompany closed following receipt, on 7 May, from Borsa Italiana SpA, permission for its shares tobe traded on the Expandi Market (organised and regulated by Borsa Italiana) and, on 8 May, the NullaOsta from Consob for the publication of the IPO Prospectus and, on 17 May, also from Consob, theNulla Osta for the publication of the Supplement to the IPO Prospectus. The global offering was for13,385,000 ordinary shares, of which a maximum of 7,000,000 shares coming from a share capitalincrease with no pre-emptive rights (deliberated at the Extraordinary Shareholders' Meeting of 9October 2006 in order to constitute the free float) and a maximum of 6,385,000 shares offered forsale by Centrobanca and Qwerty SpA (the company belonging to the directors and managers of theBank which held 29% of the Bank). The latter had also given the Coordinators of the global offeringan option, exercisable if all the shares forming part of the IPO were placed, to acquire at the offerprice a further maximum 1,338,000 shares. During the IPO there was demand for 95,630,547 sharesfrom 8,756 applicants. Based on the requests received, 14,723,000 shares were allocated to 3,910applicants; of these shares, 7,000,000 were from the share capital increase, approved by the Companyfor the IPO, 6,385,000 from those offered for sale by Centrobanca and Qwerty and 1,338,000 fromthe greenshoe. No shares were acquired by members of the IPO Underwriting Consortium or bymembers of the Underwriting Consortium of the Institutional tranche as part of the guarantees given.Payment for the shares was on 23 May at a price of € 4.60 per share and trading in the sharesstarted on the same date.

The share capital increase for the IPO raised, net of commissions and expenses paid to the IPOUnderwriting Consortium and the Underwriting Consortium of the Institutional tranche, € 31.2 million,based on the offer price. The total amount raised by the IPO, net of commissions and expenses paidto the aforementioned Consortia, was € 59.7 million, based on the offer price.Total net profit from trading registered by Centrobanca was € 10.5 million. At the same time as theIPO, 3,706,480 shares were sold for the exercise of warrants by the employees and managers ofCentrobanca; the subsequent repurchase of 136,120 brought the total number of shares held atyear-end to 24,906,720 (33.83% of the share capital) at a book value of € 0.13 per share. At year-end, the holding was classified amongst those to be divested since there is currently a project forthe sale of the stake held by Centrobanca to the parent, UBI, which is very liklely to be finalised withinthe next twelve months. This operation, an infragroup transaction, would create equity reserves forCentrobanca equal to the difference between the selling price and the book value with no profitrequired to taken through the income statement. Centrobanca has seven branch offices and threecommercial offices located throughout Italy. These work to develop the client base in close cooperationwith the Corporate Banking Offices of the Gruppo UBI banks, thus enabling extensive and effectivenational coverage.

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Annual Report 20076

Centrobanca has seven branch offices and three commercial offices located throughout Italy. Thesework to develop the client base in close cooperation with the Corporate Banking Offices of the GruppoUBI banks, thus enabling extensive and effective national coverage.

Heading above map of Italy

300 267 161 58 Lombardia(880)

Veneto(35)

Liguria(40)

1 Toscana(8)

Emilia Romagna(55)

Marche(112)

Umbria(23)

21 2

Abruzzo(18)

15 1

Molise 6

Puglia(118)

115 2 1

Basilicata 43

Lazio(117)

64 31 4 1 Campania(100)

1 Sicilia 124Calabria

Milan

Bologna

Bari

Rome

Naples

108 1 1 Ancona

54 27 15 113 7

6 1

175 13 13 Piemonte(221)

Turin

1 1 1

5 3 2 1 1

102 Trentino Alto Adige

12Friuli Venezia Giulia

14 134

1 Sardegna

17 16 11 6

2 2 1

28 3 3 1

2

Branches in Italy 1.917

UBI Banca Scpa 3

Banca Popolare di Bergamo Spa 356

Banco di Brescia Spa 347

Banca Popolare Commercio e Industria Spa 211

Banca Regionale Europea Spa 289

Banca Popolare di Ancona Spa 259

Banca Carime Spa 313

Banca di Valle Camonica Spa 58

Banco di San Giorgio Spa 35

UBI Banca Private Investment Spa 36

Centrobanca Spa 7

B@nca 24-7 Spa 1

IW Bank Spa 2

Branches abroad 8Banca Popolare di Bergamo SpaMunich (Germany)Banco di Brescia SpaLuxembourgBanca Regionale Europea Spa (France)Nice, MentonBanque de Dépôts et de Gestion (Switzerland)Lausanne, Lugano, Neuchatel, MendrisioInternational officesUBI Banca International SaLuxembourgFinancera Veneta SaMadridCFE - Corporation Financiére Européenne SaGeneva (operational office)Lombarda China Fund Management CoShenzhen (China)UBI Trust Co. LtdJerseyRepresentative officesSingapore, Hong Kong, San Paulo (Brazil), London,Mumbai, Shanghai

Updated to 26 March 2008


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The 2007-2010 Business Plan, approved by the Board of Directors on 13 June 2007, reiterates thestrategy implemented in recent years whereby Centrobanca plays a central role in Gruppo UBI incorporate and investment banking. This enables the latter to offer, above all to mid-size corporates,a complete, integrated and specialised range of products and services designed to support innovation,expansion and financial restructuring also through recourse to capital markets (extraordinary projectfinancing).

The strategic aims were defined to be consistent and integral with those of Gruppo UBI's BusinessPlan to maximise the competences and characteristics of Centrobanca and the synergies with theParent Company and the banks of the Group.

With clear guidelines, the Business Plan lays down precise steps for the operations, organisation andexpected results of each business area.

The main economic/balance sheet objectives of the 2007-2010 Industrial Plan are as follows:� customer loans: 2006/2010 CAGR (compound average growth rate) of over 17%;� commissions and other income: 2006/2010 CAGR target of over 11%;� cost/income ratio: a reduction of five percentage points in 2010 compared to 2006;� net profit: 2006/2010 CAGR target of over 10%.

As part of the 2007-2010 Business Plan, and to ensure its objectives are reached, 33 projects havebeen identified, some of which were started and even completed in 2007.

These projects relate to three areas:� governance and compliance;� revenue growth;� developing the Bank

To manage this demanding programme of changes, a specific structure for Program Managementand Coordination was set up along with methods of monitoring progress. To date, the first quarter2008, no problems in attaining the stated objectives within the prescribed time period have beenrevealed.

Development strategyof Centrobanca

Implementationof the Business Plan

Structured Finance

Industrial Loans

Investment Banking

Derivatives

Private equity

Non performingloans

EVA closely linkedto the operational role(arranger vs. participant)

Relatively low EVA;fundamental area for acquiring clientsto whom products with higher valueadded can be offered

High EVA; good potential synergieswith other product lines(eg. medium-long term lending, leasing)

High EVA; an area withsynergies with other business areas

Potentially high EVA; a presence in this areareinforces the role of 360° serviceprovider in the Corporate world

Business line complementary to CorporateBanking,Interesting but fast maturing market

Increase the share as arranger and lead manager,as well as the average size of operation

“Decommoditise” the productUse it as an entry product andthen move the relationship tohigher EVA products

Be present in all areas of the client’s equityrequirementsBecome a point of referencefor the target sectors/markets

Scale up the business, integratingthe value chain and expanding the product offer

Set up a multi-investor fund dedicatedto investments in Italian mid-corporates

Become active in the sector usingthe experience gained

Centrobanca Business Area Importance of Business Area Centrobanca Strategic Aims

(*) EVA = Economic Value Added measures the normalised profit generated by an economic activity net of all costs, including those costs that are part of the calculation ofreturn on capital employed.


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Annual Report 20078

Governance and compliance

These projects were set up and implemented to improve the efficiency of the support mechanismsfor the coordination and governance of the Bank and its business to ensure it conforms to theregulations in act. The main projects are as follows:

ALMO (Operating asset/liability management) and financial management - this project, about tobe concluded, aims to reinforce the Operational ALM of Centrobanca in direct coordination with theRisk Management and Finance Area of the Parent Company.Performance management - this project is to strengthen the model and means of performancemanagement to enable timely and accurate measurement of performance and the value created byeach Business Line.Risk Management / Compliance - this is to develop resources, tools and models to monitor andmanage risk by constituting a Risk Management unit to evaluate, monitor and manage the Bank'soverall exposure to significant risks, as well as supporting capital management, in line with the Groupmodel.For Compliance, the aim is to attain a level of visible effectiveness, quality and excellence, also onthe market, of preventive actions which ensure that Company business is carried out according tothe relevant laws, directives, rules and standards/practices to protect the Bank from the risk of legalaction and to ensure its good reputation.Basel 2 - this project is to ensure that the organisation, processes and systems necessitated by theParent Company strategies, as well as timing and implementation, are developed in line with thedirectives of Basel 2.Mifid - this project is to ensure that the organisation, processes and systems necessitated by theParent Company strategies, are developed in line with Mifid rules.

Revenue growth

There are projects to support the development of Business Lines and, therefore, of revenues. Themost significant projects include the following:

New methods of supporting commercial activities - this project, already well under way, will ensurethat Centrobanca has the necessary means to industrialise its commercial activities (centralisedtargeting, definition of client plans and of campaigns) and utilise and share the existing wealth ofinformation on clients and markets.Client Planning for clients of Gruppo UBI - this project, started in 2006, was to apply new methodsto enhance the joint operations of Centrobanca and the banks of the Group so as to increase cross-selling to the captive customer base. It was implemented in the ex-BPU area in 2007 and is currentlybeing extended to the newly acquired banks within the Group.Training the UBI network in Centrobanca products - the systematic training/ updating of CorporateRelationship Managers within the UBI network about Centrobanca products is ongoing throughsecondments, meetings, distribution of illustrative material and knowledge sharing.Centrobanca Service Points - Centrobanca has opened a new Business Center in Brescia and hasreinforced the Turin and Milan Business Centers to adapt the regional coverage of its commercialnetwork to Gruppo UBI's extended area of operations.Derivatives - this project will result, in early 2008, in the centralisation within Centrobanca of all activityconnected to Corporate and Retail derivatives and Market Making, as set out in the UBI BusinessPlan.

Developing the Bank

These projects aim to improve the effectiveness and efficiency of the operating entity in order tosupport the volumes and business defined in the Plan.


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New organisationalstructure

Management and Development of Human Resources - the aim of the project is to extend themanagement systems of the Group to Centrobanca and to introduce methods appropriate to thetypes of business conducted by Centrobanca and to the strategic development objectives that havebeen decided.Loan evolution - this project is to revise the credit processes and the support mechanisms to ensurethat Centrobanca reaches a level of efficacity/ efficiency demanded by the trend in volumes and bybest practice in the lending activities of the Group.Development Plan for Centrobanca Systems - this project, initiated and completed in 2007, wasto assess the existing situation of the Banks' Information System, the definition of a DevelopmentPlan and the identification of a series of processes and actions to bring about immediate improvements.Finance Management Automation - this project is to identify and implement micro-organisationalactions and to automate back and middle office activities in order to increase productivity in line withthe Business Plan.

The Board of Directors meeting of 19 December 2007 approved the new organisational structureof the Bank, which became operational in January 2008.The principles behind the new organisational structure are as follows:� structuring the business units (Business Administration) so that responsibility, objectives and

results can be attributed clearly and unequivocally.� clear separation, as regards loans, between origination and structuring and assessment and

management through the creation of a well defined “Lending Authority”;� the grouping and single management of the governance and control functions of the operational

entity to facilitate the constant improvement of risk management and the adherence to principlesguiding compliance and operational efficiency.


CompliancePlanning & ControlRisk ManagementLegal & Company MattersHuman ResourcesAccountsOrganisation & ProcessesSafety & General ServicesMiddle - Back office financingPurchasing & Cost Management

Lending PoliciesEvaluation and assent

Performance monitoring and controlLegal departmentPre-Contentious

Assessmets

Business analysisEquity research

Macro economics and credit research

BOARDCEO

Director GeneralValeriano D’Urbano

Internal auditMgmt. ff Private Equity Holdings

Lending autorityMario Ramelli

Commercial Mgmt.Andrea Del Negro

Business intelligencePio De Gregorio

VDG VDG

Governance & Op.Leonardo Siccoli

Coverage large corp.Business centers

Operational marketing

Corp. financeAlberto Beretta

Advisory, M&AGiorgio Chirivì

Capital MarketsM.M. Fumagalli

Finance & Mkts.V, D’Urbano (a.i.)

OTC, Corp., RetailDerivatives

Stefano Poli (S)

Corp. LendingVittorio Franco

NPLsGiorgio Asietti

Dep

artm

ent &

Dut

ies

Bus

ines

s U

nit


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The new Company structure provides for the following:

Business Units and Staff Functions

Lending Authority Unit - this was set up to reinforce the organisational distinction between unitsproposing business operations and those units with the job of appraising the lending validity of suchoperations.The Area stipulates the Lending policies, in close collaboration with the directives of the ParentCompany, ensures examination and assessment of the merits and risks of all the proposals put toit, is in charge of the composition and risks of the entire loan portfolio of the Bank, and guaranteesthe correct management and execution of activities of a legal nature.Governance and Operational Entity Unit - this Area ensures the effectiveness of the planning andcontrol processes, the systematic monitoring of all risks, adherence to compliance rules, correct andtransparent accounting, and promotes operational efficiency in order to improve continually the qualityand the costs inherent to the business offer.Commercial Coordination and Coverage of Large Corporates - this Unit develops the businessoffer and cross-business unit origination. It instructs, oversees and coordinates the activities ofCentrobanca points of sale, implements the most appropriate relationship management methodologieson a selected portfolio of clients, with the aim of maximising cross-selling opportunities, increasingclient loyalty and augmenting the profitability of the relationship, and ensures commercial coordinationwith all banks within the Group.Business Intelligence - This is aimed at developing forward-looking analysis on trends in the economyand research on listed companies, primarily in the mid-corporate sector.

Business Units

Advisory and M&A - proposes and develops consultancy services to identify and implement companystrategies for acquiring or divesting company businesses, for mergers or for other restructuringoperations, primarily financial.Capital Markets - proposes and develops consultancy services to identify and implement therestructuring of company liabilities and/or raising money from capital markets.Finance and Markets - this groups all market making activities in OTC Derivatives, trading on theSecondary Market and management of proprietary portfolio and fundingOTC Derivatives for Corporate and Retail Clients - oversees OTC Derivative operations for Retailand Corporate Clients, both for Centrobanca and for Gruppo UBI.Corporate Lending - manages origination and execution activities related to Industrial Lending andAssisted Finance operationsCorporate Finance - manages origination and execution activities related to Structured Finance andProject Finance operations.Non-Performing Loans - manages non-performing loans and is the centre of excellence of the Groupand on the market for all matters related to the management and repayment of complex loans ofmedium-high amounts.

Annual Report 200710


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The 2007 financial year confirmed the growth of the main business activities of Centrobanca(medium/long-term lending) from which stems the opportunity to offer other services and productsto companies.

There was growth in the loan books of approved credit (+7.9%) and issued credit (+15%). At the endof the year, requests for loans totalling € 2,199 million (+25%) were under consideration, while totalloans outstanding for issued financing rose 8.3% from € 5.9 billion to € 6.4 billion.

The increase in issued loans was principally attributable to Acquisition and Project Financing (+25.4%),to the high value added, and to traditional medium/long-term lending (+17.4%); Corporate Financeoperations (portions of pooled financing for prime borrowers, industrial and international companieswith a high credit rating and tradable on secondary markets) fell 8.5%.

Operational overview

Loans

(euro millions)

Flunding flows:

- transactions approved

- financing issued

Oustanding at period end:

- operations accepted and to be contracted

- operations accepted and yet to be issued

Total loans

- Value of loans currently in issue (*)

+ 7.9%

+ 15.0%

+ 7.0%

+ 101.7%

+ 25.0%

+ 8.3%

4,207.1

3,083.3

1,522.6

676.2

2,198.8

6,397.0

3,899.0

2,682.1

1,423.6

335.3

1,758.8

5,904,3

Type 2007 2006 Change %

(*) residual net loans for existing financing to customers and banks.

Acquisition & Project Finance

- acquisition finance

- project finance

Corporate Finance

Lending

- industrial loans

- portfolio discounts

- retail residential mortgages

TOTAL

+ 25.4%

+ 25.7%

+ 21.8%

- 8.5%

+ 17.4%

+ 18.0%

- 18.3%

+ 16.2%

+ 15.0%

35.2%

33.1%

2.1%

15.5%

49.3%

48.4%

0.5%

0.4%

100.0%

Type of transaction

Value %

Change %

1,086.0

1,020.5

65.6

477.8

1,519.4

1,492.8

15.1

11.5

3,083.3

Net loans issued

2007 2006

32.3%

30.3%

2.0%

19.5%

48.2%

47.2%

0.7%

0.4%

100.0%

Value %

865.9

812.1

53.8

522.3

1,293.9

1,265.5

18.5

9.9

2,682.1

(euro millions)

Banks and financial entities

Families and other

Non-financial entities

- agriculture

- manufacturing

- building and construction

- services and commerce

TOTAL

45.6%

37.8%

7.9%

+ 15.0%

23.1%

0.8%

76.1%

0.0%

32.6%

3.2%

40.2%

100.0%

Economic sector

Value %

Change %

711.7

25.8

2,345.8

0.8

1,005.4

99.7

1,239.9

3,083.3

Net loans Issued

2007 2006

18.2%

0.7%

81.1%

0.1%

40.8%

4.4%

35.7%

100.0%

Value %

488.7

18.7

2,174.6

3.5

1,095.5

116.9

958.8

2,682.1

(euro millions)


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The majority of loans were issued to non-financial counterparts (76% of total), even if, in 2007, thesegrew less strongly than those to financial counterparts (+7.9% versus +45.6%).

From the point of view of geographical location, loans to non-residents declined (-14.2%), the mainsource of corporate finance operations, whilst maintaining a weighting of around 23%. In Italy, theshare of loans in the North West grew (+7% points) as they did in the South (+2.7% points), in linewith the regional distribution of the Gruppo UBI and Centrobanca networks.

During 2007, organisational and procedural meetings continued to meet the requirements of the newlaws on assisted interventions which demand that assisted grants and finance be accompanied byordinary bank loans.

Activity in 2007 was directed primarily at managing existing operations; preliminary assessments werelimited to Innovation and Research operations as no new Bando 488 were issued. Moreover, fundsunder the 2006 Finance Law started to be awarded using funds held by the Cassa Depositi e Prestiti.

Centrobanca has a special unit offering corporate clients, either directly or through the banks ofGruppo UBI, research services and hedging derivatives for risks of adverse trends in interest andexchange rates and in commodity prices.In 2007, operations connected to the ex-Gruppo UBI bank network grew strongly both in volumes(+77.6%) and number of operations (+84.3%) due to the relaunch of commercial coordination withthe networks of the banks within the Group.

NORTH WEST

NORTH EAST

CENTRE

SOUTH

ISLANDS

NON-RESIDENTS

TOTAL

+ 39.9%

+ 7.6%

+ 2.8%

+ 48.0%

+ 34.7%

- 14.2%

+ 15.0%

39.5%

11.7%

11.9%

12.0%

2.0%

22.9%

100.0%

Geographical area

Value %

Change %

1,217.8

362.0

366.5

369.4

62.2

705.4

3,083.3

Net loans issued

2007 2006

32.5%

12.5%

13.3%

9.3%

1.7%

30.7%

100.0%

Value %

870.7

336.6

356.7

249.5

46.2

822.4

2,682.1

(euro millions)

Investigations

Final report stage

Issued

TOTALE

of which:

Direct

RTI Agents

Share of total revenues

2,993.1

370.4

149.5

3,513.0

2,378.3

1,134.7

83.1

417.0

169.6

669.7

314.0

355.7

Law 488, Innovation,

Regional Researchand Agreements,

Relevant Agent

Requests received

(no.)

Investments

expected

25

389

641

1,055

396

659

2007 2006

846

324

709

1,879

1,079

800

Investments

expected

Requests received

(no.)

3,5 3,8

(euro millions)

Pair trades

risk hedging derivatives

- of rates and other

- exchange rate

TOTAL

+ 76.3%

+ 85.6%

+ 77.6%

2,082

359

2,441

Product type

No.

of transactions

Notional

value

Change %

552

397

949

2007 2006

+ 72.0%

+ 104.6%

+ 84.3%

321

194

515

1,181

193

1,375

No.

of transactions

Notional

value

No.

of transactions

Notional

value

(euro millions)


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In 2007, in line with the 2007-2010 Business Plan, the project to centralise all derivative operationswith clients of Gruppo UBI, both corporate and retail, within Centrobanca was started; this hasentailed analyses of the processes, organisational structure and implementation of the technologicalplatform and systems integration. The new structure and new operating methods were implementedstarting on 3 March 2008.

In September 2007, in order to ensure an offer coherent with the risk profile of the client and, atthe same time, to ensure adequate risk management, the Group adopted a policy which allowsfor the following:� the identification of three categories of client as under MIFID rules, for each of which there is a

differentiated product range depending on the type of derivative and its final use. In detail: privateretail counterparts may only be sold hedging derivatives; non-private retail clients may also besold hedging derivatives that, for lower hedging costs, include possible exposure to a degreeof financial risk; professional and qualified counterparts may also be sold derivatives with aspeculative element. The ratio between potential losses and the underlying invested capital intransactions with retail counterparts can reach 1x whilst those with professional and qualifiedcounterparts cannot exceed 3x.

� the concession of specific credit lines defined on the basis of the equivalent credit calculatedseparately for each product class, also on the basis of its residual life, with continuous monitoringof the mark-to market by the manager;

� information transparency through communication to the client of all open positions in order tomaximise awareness and thereby reduce any risk of dispute.

The Investment Banking division is focused on medium-size businesses, which is proving to be themost dynamic area of the Italian economy. This business area provides a range of financial serviceswith a high degree of specialisation and innovation capable of satisfying the needs of corporate clientsfollowing a growth strategy through extraordinary transactions (capital operations) or corporaterestructuring.

During the year the Group continued with its efforts to move the product mix to higher margin services,whilst maintaining efficiency, quality and the strong collaboration with the banks in the Group to obtainmore effective leverage of the business potential realisable from the existing corporate clients of theGroup.

2007 confirmed the consolidation of Centrobanca's position in this business area; the number ofmandates/ transactions invoiced rose (+76%) with a consequent increase in revenues (+6.6%).

Mergers & acquisition/advisory

Capital markets

TOTAL

+ 27.3%

+ 233.3%

+ 52.0%

No. mandates/ transactions invoiced Change %

28

10

38

2007 2006

22

3

25

Dividends

Net commissions

Net trading result

Total income from capital markets

Net commissions

Other operating income

Total income from Advisory and Mergers & Acquisitions

Net commissions from Equity Sales

TOTAL

- 27.9%

+ 164.7%

- 138.7%

+ 43.2%

- 12.2%

-

- 19.8%

-

+ 6.6%

Total income from Investment Banking Change %

434.8

2,060.2

(110.2)

2,384.8

3,328.4

-

3,328.4

484.4

6,197.6

2007 2006

602.9

778.3

284.6

1,665.8

3,791.4

357.7

4,149.1

-

5,814.9

(euro millions)


Colori compositi


In 2007, Capital Markets operations increased significantly; the main operations were:� the role of global coordinator in the listing of Cape Listed Investment Vehicle on the

MTF;� the role of sponsor and specialist in the listing of Tessiture Pontelambro on the MAC market,

the first to take place on this market;� underwriting the Arkimedica 5% 2007/2012 bond;� participation in the placing of the Enel 2007/2015 bond.

The Advisory and Mergers & Acquisitions team supported its clients in the followingtransactions:� assisting Palmera Spa to restructure its bank debt and divest its brands;� assisting the controlling shareholders of Carminati Distribuzione in the sale of their holding to

the Arcelor Mittal Group;� assisting the controlling shareholders of Italsmea to sell the majority stake to the Norwegian

group, Technor.

The activity of trading in the secondary equity market on behalf of institutional investorsbegan in June 2007. This activity is supported by research on listed Italian companies producedby the Equity Research Service, which has six sector analysts who published 32 reportsin the second half of 2007. At the same time, the activity of Equity Sales (with four experiencedpeople) started, receiving orders from almost 40 institutional investors, both domestic andinternational. In October, an exclusive partnership with the US broker, Auerbach & Grayson, whichservices over one hundred institutional investors in the United States, was set up.In January 2008, trading was extended to include foreign shares in order to expand the operatingoffer for institutional clients. The Equity Trading Service can now trade shares on all the mainmarkets worldwide. The client base has also expanded to include some of the large Europeanasset managers.

In 2007, private equity activity continued with management of the existing portfolio and with anincrease in the invested capital, also due to the strategic and operational consultancy services of thesubsidiary, Centrobanca Sviluppo Impresa SGR, with which there now exists a specific agreementof contractual exclusivity.

On 18 May 2007, the Initial Public Offering of ordinary shares in IW Bank, to be listed on the Expandimarket (organised and regulated by Borsa Italiana), closed; this operation (described above) resultedin the Group's stake falling from 51% to 33.6% and generated a profit of € 10.5 million from thestake sold to the market.

Capital Market

Advisory e Merger& Acquisition

Equity Sales

Private equity


IIW BANK

RADICI FILM SPA

HUMANITAS

TECHOSP CLINICAL SERV.

IMMOBILIARE MIRASOLE ord. (ex ACH IMM.)

IMMOBILIARE MIRASOLE priv. (ex ACH IMM.)

PELLEGRINI GROUP SPA

BOUTY HEALTHCARE SPA

CAR TESTING SA

Other shareholdings

TOTAL INVESTMENTS

+ 0.3%

+ 27.0%

+ 28.4%

+ 27.6%

+ 54.5%

- 11.5%

+ 52.1%

33.8%

36.0%

9.1%

9.1%

28.2%

15.8%

7.0%

22.2%

32.2%

Private Equity investments

/ Merchant Banking Value % held

Change %

3,124.4

30,276.3

20,826.0

2,376.5

17,241.5

9,658.3

6,667.5

4,303.5

0.0

3,110.4

97,584.5

2007 2006

51.0%

36.0%

7.1%

7.1%

44.0%

7.0%

22.2%

32.2%

Value % held

3,115.1

23,837.2

16,216.8

1,862.1

6,160.0

6,667.5

2,785.0

0.0

3,513.1

64,156.8

(euro thousands)


Colori compositi



In September, Bouty was listed on the Expandi market of the Milan Stock Exchange; the stock priceat 31 December 2007 generated a capital gain of € 1.5 million.

Following the merger in June 2007 of ACH Immobiliare and Immobiliare Mirasole, Centrobancapurchased 7,477,471 ordinary shares of the merged company, Immobiliare Mirasole S.p.A., with aninvestment of € 10.5 million and 4,189,230 preferred shares for a further € 5.9 million. This took itsstake in the ordinary share capital of the company to 28.19% for an investment totalling € 14.4 millionand in the preferred share capital to 15.79% for an investment in the preferred shares totalling € 8.1million. Centrobanca then took part in the € 10 million share capital increase in September andNovember, subscribing to 2,012,942 ordinary shares, for a total of € 2.8 million, and 1,127,610preferred shares for € 1.6 million. Since the other shareholders also subscribed proportionally to theshare capital increase Centrobanca' s holding in the share capital, both ordinary and preferred, hasremained unchanged at 28.19%. The total capital invested in the ordinary share capital now totals€ 17.2 million whilst that in the preferred shares totals € 9.7 million.

In addition:� the bank's stake in Humanitas and Techosp increased (from 7.1% to 9.1%) with a revaluation

of € 1.5 million based on the purchase price;� the holding in Radici Film was revalued (+ € 4.9 million) and a mandate given to Ernst&Young

Advisory to explore the possibility of selling the stake;� there was a further € 2.9 million write-down of the convertible bond acquired in the Car Testing

operation.

The following comments relate to the main private equity investments:

IW Bank - The 2007 financial year confirmed the strong growth in on-line financial services fromclients. This led to a net profit of € 11.2 million, an increase of 415% compared to 2006 (€ 2.2 million);however, the 2006 net result was negatively impacted by the inclusion in personnel costs of € 5.5million of “notional” costs related to the “2008 Stock Option Plan” but benefited from the recognitionof € 3.2 million of deferred tax assets for losses carried forward. The 2007 results benefited fromthe recognition of € 1.4 million of pre-paid taxes. Adjusting for all these items, the 2007 net profitwould have been € 9.8 million and the 2006 net profit € 4.4 million, an increase of 121% in 2007.The financial results reflect the significant growth in the period of the main operational and dimensionalindicators:� the average daily number of trades made by clients exceeded 26,000 compared to an average

of just over 22,000 in 2006. The average figure does not include the orders carried out forclients of Gruppo UBI (order routing activity) which was circa 2,500 per day;

� account relationships set up and operational are over 71,000 (50,000 at the end of 2006), a grossacquisition of 25,000 new account relationships in 2007;

� total deposits from clients were € 3,688 million (€ 2,867 at year-end 2006), composed of direct deposits of € 1,073 million (€ 926 million at year-end 2006), indirect deposits in equities of € 2,122 million (€ 1,433 million at year-end 2006) and indirect deposits in funds of € 494 million (€ 498 million at year-end 2006).

As part of its commercial offering to its clients, the Bank has proposed a series of innovative productscharacterised by a high level of transparency and a low level of costs.

Radici Film S.p.A. - The preliminary results of the company for 2007 reveal better than expectedgrowth in sales and an increase in its European market share, above all for special products. Revenueswere € 191.0 million with Ebitda of € 24.2 million and net debt of € 67 million (a decrease of € 17million compared to the previous year). The reduction in net debt (above budget) confirms the significantcash generating capacity of the group.In November 2007, Centrobanca with the other shareholders of the company (The Fondo SviluppoImpresa, managed by the subsidiary, Centrobanca Sviluppo Impresa SGR S.p.A., and BS PrivateEquity) gave a mandate to Ernst&Young Advisory to examine the possibility of selling the entire holdingin the company.


Colori compositi



The initial results of the mandate are positive and by the end of January 2008 six non-binding offershad been received from industrial and financial operators. In the coming months the offers receivedwill be examined and an eventual divestment could take place towards the end of the first semesterof this year.

Key financial data:

Humanitas S.p.A. / Techosp Clinical Services S.p.A. - This is one of the main private hospitalgroups operating in the Italian healthcare industry. The group, controlled by the Techint group,manages 6 clinics (all accredited with the SSN) located in Lombardy, Piedmont and Sicily. Allspecialise in highly complex treatments such as oncology, cardiology and othopaedics. TheHumanitas clinic in Milan also incorporates a University department. The group's strategy is toachieve further growth through the acquisition of other clinics both in Italy and abroad. As partof this strategy, in the second half of 2007, the group acquired 51% of the Mater Domini Clinicin Castellanza, which will be included in the area of consolidation from 2007. The preliminaryresults for 2007 reveal further growth both in revenues and underlying profitability. The outlookfor 2008, based on the budgets of the two companies, indicates growth in the revenues of all ofthe clinics accompanied by an improvement in margins.

IMMOBILIARE MIRASOLE S.p.A. (ex. ACH IMMOBILIARE S.p.A.) - The purpose of the companyis the ownership and management of the real estate of the clinics of Humanitas and TCS. In thefinancial period, the process was completed whereby the real estate occupied by the HumanitasClinic in Rozzano (Milan) and the Gavazzeni Clinic (Bergamo), which belongs to the Humanitas group,were placed in one financial entity.

ACH IMMOBILIARE S.p.A. (which owns 59.98% of the share capital of Immobiliare Mirasole), inwhich Centrobanca held a 44% stake at the end of 2006, was the object of a reverse merger withIMMOBILIARE MIRASOLE S.p.A. (which had incorporated the two companies, SILEM S.p.A. andIMMOBILIARE PERSEGHETTO S.p.A.). In the second half of 2007, the company started to preparethe expansion investments under the Business Plan relating to the Gavazzeni Clinics in Bergamo andthe Humanitas Clinic in Rozzano. During the current financial year, the reorganisation of the real estatewill be completed with the acquisition of the company, ICT IMMOBILIARE S.p.A., owner of theproperties housing the two clinics in Turin (Fornaca and Cellini), which are part of the Humanitasgroup.

Pellegrini Group S.p.A. - This is the vehicle that was used for the acquisition of 100% of the capitalof PELLEGRINI S.p.A.. Through a share capital increase Centrobanca acquired a 7% stake in PellegriniGroup S.p.A. for a total investment of € 6,667,500.

2007 forecast2006

RevenuesEbitdaNet debt

191.4

24.2

-67.0

187.0

24.0

-83.5

Radici Film Spa

2007 forecast2006


336.4

49.9

-53.9

328.6

46.5

-14.0

Humanitas S.p.A.

2007 forecast2006


17.5

4.4

4.8

16.1

3.5

11.0

Techosp Clinical Services S.p.A.


Colori compositi



The results of the operating company were in line with budget and better than those of 2006. 2007revenues were circa € 360 million, with Ebitda slightly ahead of expectations (€ 30.8 million). Netdebt was also better than expected and should be around € 65 million. During the financial yearthe company actively looked for external growth opportunities, in particular studying the possibilityof acquiring a company operating in the same sector based in the region of Reggio Emilia. Theacquisition was not finalised as the demands of the seller were considered excessive by thecompany but proved to be acceptable to a competitor.

The possible acquisition of the activities of Pellegrini Overseas, which is still owned by the Pellegrinifamily, is still being considered. The company's development is in line with the Business Plan andconfirms the possibility of a listing or trade sale within 2/3 years.

Key financial data:

Bouty Healthcare S.p.A. - Bouty Healthcare S.p.A. has been listed on the Expandi market of theMilan Stock Exchange since 9 October 2007. This followed an IPO in which 11,200,000 new Boutyshares were placed at a price of € 1.3 per share for a total of € 14,560,000 (gross of IPO costs).In connection to the IPO, the historic shareholders of the company (Centrobanca, Consilium SGR -manager of the Kairos Partners Fund - and Centrobanca Sviluppo Impresa SGR S.p.A.) agreed apremium of € 1,000,000 to be paid to the managers of the company (Centrobanca's share was €250,000). This discharged the obligations under the pact between the managers and the shareholdersmade at the time of the investment (2003); however, agreement was also reached that managementwould use the net gain on this premium (after any necessary fiscal or welfare payments) to acquirefrom the historic shareholders of Bouty Healthcare S.p.A. shares at the IPO price (€ 1.3 per share).In this way Centrobanca sold 109,858 shares to management for a total € 142,815.40.

The consolidated company results to 30 June 2007 show normalised revenues of € 31.1 million andEbitda of € 2.4 million (€ 2.9 million excluding non-recurring items). These results are an improvementon those of 2006.

Given the performance in first half 2007 and a lack of negative indicators for the period immediatelyfollowing, it is likely that the Budget targets will have been reached for 31 December 2007; thesewere for revenues of circa € 53.0 million, Ebitda of circa € 6.0 million and net debt of € 4.5 million.Following the significant decrease in net debt as a result of the IPO, the company is now looking forpotential acquisition targets in order to consolidate its market position, particularly in those areaswhere it has a competitive advantage that can be maintained. The book value of this holding wasadjusted to reflect the market price, € 1.28 per share, at 31 December 2007. The shares owned byCentrobanca (like those of all the other shareholders at the time of the IPO) are the object of a lock-up which lasts until 9 October 2008.

Key financial data:

2007 fcst.2006

FatturatoEbitdaPFN

353.0

30.0

-68.2

330.8

27.2

-74.2

Pellegrini Group S.p.A.

2007 forecast2006


57.6

6.0

-4.5

71.5

5.7

-13.5

Bouty Healthcare S.p.A.


Colori compositi



Car Testing S.A. - This Luxembourg company controls the PROTOTIPO Group, which provideshighly specialised engineering services to the automobile industry. In particular, it provides reliabilityand testing services to the world's leading automobile producers. The parent company, PrototipoS.p.A. operates in the region of Turin (Trofarello) while its 100% subsidiary, Nardò Technical Centers.r.l., owns and operates the distinctive Nardò test circuit in the southern province of Lecce (Puglia).This investment has been in the Group's portfolio since 12 December 2002 and, in recent financialperiods, has suffered serious operational problems which have necessitated important correctiveaction, both operational and financial. The 2007 financial year showed an improvement in thecompany's performance.

The growth prospects of the company are closely linked to investments currently being made toadjust its structure to the needs of its clients in order to cover circa 80% of their requirements forautomotive testing. The most significant of these investments, a new Handling circuit 6.2 kms inlength, is about to be completed and is expected to be ready for use in the first quarter of the currentyear.

The financing of the entire investment programme was secured through a partial property salecompleted in January 2007. A new Managing Director with proven commercial skills was appointedto Nardò Technical Center s.r.l. in May 2007 and, given the availability of the new asset, will managethe new development phase of the company.


Colori compositi


The items shown in the reclassified balance sheet correspond to those in the draft balancesheet with the exception of the extrapolation of the bank debt of the subordinate depositaccount.


Capital structure

Loans and Assets:

Due from customers

- financing

- securities

- other credits

Due from Banks

- financing and deposits

for pooled operations for customers

- current accounts, deposits and other

Financial assets:

- trading assets

- debt securities

- equity securities

- derivatives for trading

- embedded derivatives

- available for sale assets

- debt securities

- equity securities

- fair value financial assets

- capitalisation policies

Shareholdings

- in being

- in disposal

Real Estate

Other fixed assets

Funding with charges:

Securities in issue:

- bonds

- certificates of deposit

Due to Banks

Due to Customers

Subordinated liabilities

Tradable financial liabilities

- derivatives for trading

- embedded derivatives

- warrants

Hedging:

- hedging derivatives assets

- hedging derivatives liabilities

- adjustment of asset value

with general cover

- customer financing

-12.09%

7.24%

31.45%

-57.59%

-8.66%

36.41%

-82.53%

0.11%

-1.52%

-0.16%

-12.57%

9.06%

-32.61%

-5.38%

0.00%

-24.96%

-13.66%

7,808.8

6,173.7

397.5

1,164.2

366.7

445.0

352.4

7.6

61.1

4.7

-6,986.1

-3,946.8

-2,586.8

-11.2

-200.0

-241.3

-168.0

58.7

-227.7

1.1

Change %

.

6,126.8

1.0

45.9

270.2

127.4

23.4

99.5

91.2

152.6

444.3

0.8

352.4

1.6

6.0

-3,720.4

-226.4

-87.8

-152.6

-0.8

December 2007 December 2006

8,882.8

5,756.7

302.4

2,744.9

401.5

326.3

2,017.1

7.6

62.0

4.7

-7,990.6

-3,618.8

-3,838.5

-11.8

-200.0

-321.5

-194.6

58.1

-258.4

5.7

5,700.9

20.0

35.8

203.4

99.0

12.6

68.8

84.6

235.5

321.5

4.7

2,017.1

7.6

-3,346.6

-272.2

-82.2

-235.5

-3.8

(euro millions)


Colori compositi


The continued growth in loan activity, with loans made totalling over € 3 billion, led to loans tocustomers growing 7.2%.

The breakdown by type of loan shows an increase in Acquisition and Project Finance (+40%) whilstcorporate finance (the share of pooled financing of large industrial and international companies witha high credit rating and tradeable on secondary markets) fell to € 400 million and medium/long-termfinancing remained substantially stable (-1.4%). The latter segment continued to experience a declinein the share of assisted finance due to the portfolio discounts under the Sabatini Law and the fall inagricultural loans.

A breakdown by sector and economic activity reveals substantial stability in the production sector(78.4%) with manufacturing growing (+1.8% points) whilst all other areas declined. The growth of thefinancial sector (+1.5% points) is related to financial vehicles used in structured finance operations.

A geographical breakdown reveals a different composition from that of the flows due to the strengthof loan repayments; the greatest increase came from non-residents compared to substantial stabilityin southern Italy and a fall in other regions of Italy.


Loans to customers

Acquisition & Project Finance

Corporate Finance

Lending

- industrial loans

-portfolio discounts

- retail residential mortgages

- agricultural loans

Other loans

TOTAL

40.2%

-14.8%

-1.4%

-21.8%

7.2%

31.4%

6.6%

61.1%

0.8%

100.0%

Operation by type

Value %

Change %

1,939.9

408.8

3,773.2

3,365.8

52.3

239.5

115.6

51.7

6,173.7


24.0%

8.3%

66.5%

1.1%

100.0%

Value %

1,383.2

479.9

3,827.4

3,348.7

66.6

254.9

157.3

66.1

5,756.7

Outstanding loans

(euro millions)

States and public entities

Banks and financial entities

Families and other

Non-financial entities

- agriculture

- manufacturing

- building & construction

- services & commerce

TOTAL

7.2%

18.7%

-8.5%

6.4%

7.2%

1.4%

15.3%

4.9%

78.4%

1.2%

35.5%

6.1%

35.6%

100.0%

Economic sector

Value %

Change %

87.7

946.2

300.2

4,839.5

71.5

2,194.0

376.0

2,198.1

6,173.7


1.4%

13.8%

5.7%

79.0%

1.5%

33.7%

7.3%

36.5%

100.0%

Value %

81.8

797.3

328.2

4,549.4

87.3

1,940.8

417.8

2,103.4

5,756.7

Outstanding loans

(euro millions)

NORTH WEST

NORTH EAST

CENTRE

SOUTH

ISLANDS

NON-RESIDENTS

TOTAL

+ 8.1%

+ 0.7%

+ 3.7%

+ 15.5%

- 36.0%

+ 40.0%

+ 7.2%

38.3%

14.6%

16.7%

10.9%

1.5%

18.0%

100.0%

Geographical area

Value %

Change %

2,366.5

901.7

1,030.3

672.7

93.0

1,109.5

6,173.7


40.8%

15.6%

17.3%

10.1%

2.5%

13.8%

100.0%

Value %

2,347.1

895.6

993.6

582.4

145.3

792.7

5,756.7

Outstanding loans

(euro millions)


Colori compositi


Summary of sales of non-performing loans

Loan recovery through the sale of non-performing loans continued, albeit for lesser sums than in thelast two financial years; the operations regarded loans for a total of circa € 32.4 million and realiseda net gain of € 7.1 million. The positive trend in loan recovery and the lower rate of classification ofloans as non-performing, with average levels lower than those of the previous year (from 0.64% to0.53% - see the chart showing rates of decay), gives a ratio of non-performing loans to total customerloans of 0.6% at year-end 2007 compared to 1.0% at year-end 2006. In total, the value of “doubtfuldebts”, including debt expired for more than 180 days, fell 22% compared to 2006 whilst thepercentage of cover is 46.3% (the ratio of value adjustments to gross loans).

Loan growth has resulted in an increase in risk concentration, as can be seen from the data onexposure to the principal clients and from the indicators relating to regulations on large loans; however,this is not such as to compromise financial stability and is in line with the Centrobanca strategy tofocus on corporate clients and extraordinary finance.


2005

2006

2007

TOTAL

36.8

28.1

7.1

72.0

4.7

17.8

22.7

45.1

gross profit

112.5

79.1

9.7

201.2

no-performing Total

117.2

96.8

32.4

246.4

portion sold (net of ias)

watch-list

(euro millions)

Non-performing

Watch-list

Restructured

Past due

Country risk

DOUBTFUL DEBTS

LOANS IN BONIS

TOTAL LOANS

2.4%

-14.4%

-0.1%

-2.4%

-0.3%

-3.9%

0.1%

-0.8%

76.2

13.5

0.1

0.6

0.0

90.3

18.4

108.7

Gro

ss c

red

it

% o

f net

tota

l

Change %

114.1

54.8

3.5

22.3

0.1

194.9

6,087.5

6,282.3


Ad

just

men

ts

% c

over (*

)

37.9

41.4

3.5

21.7

0.1

104.6

6,069.1

6,173.7

0.6%

0.7%

0.1%

0.4%

0.0%

1.7%

98.3%

Net

cre

dit

Gro

ss c

red

it

% o

f net

tota

l

Ad

just

men

ts

% c

over (*

)

Net

cre

dit

% o

f net

tota

l

% c

over (*

)

Net

cre

dit

66.8%

24.5%

1.7%

2.8%

0.0%

46.3%

0.3%

1.7%

101.7

32.2

0.0

1.2

0.0

135.1

12.5

147.6

158.0

82.7

2.0

22.7

3.5

269.0

5,635.3

5,904.3

56.4

50.5

1.9

21.5

3.5

133.9

5,622.8

5,756.7

1.0%

0.9%

0.0%

0.4%

0.1%

2.3%

97.7%

64.3%

38.9%

1.8%

5.2%

0.4%

50.2%

0.2%

2.5%

-32.7%

-18.1%

79.3%

0.8%

-97.2%

-21.9%

7.9%

7.2%

-0.4%

-0.2%

0.0%

0.0%

-0.1%

-0.6%

0.6%

(*) the percentage covered is equal to the ratio of adjustments to gross credits

(euro millions)

1.25%

1.00%

0.75%

0.50%

0.25%

0.00%

2.50%

2.00%

1.50%

1.00%

0.55%

0.00%

Quarterly impairment rates (New non-performing loans to loans in bonis at start of period)

qua

rter

ly d

ata

aver

age

for

8 q

uart

ers

1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q 1Q 2Q 3Q 4Q

quarterly data 0.69% 0.83% 0.37% 0.39% 0.07% 0.26% 0.07% 0.03% 0.23% 0.29% 0.06% 0.05% 0.03% 0.36% 0.09% 0.05%

average for 8 quart 1.64% 1.61% 1.71% 1.49% 1.34% 1.11% 0.85% 0.70% 0.54% 0.51% 0.56% 0.57% 0.58%

annual average 2.28% 2.28% 2.28% 2.28% 0.43% 0.43% 0.43% 0.43% 0.64% 0.64% 0.64% 0.64% 0.53% 0.53% 0.53% 0.53%


Colori compositi


Concentration risk under supervisory regulations

Concentration of risk by value (source: Risk Management Centre)

The performance of financial assets, represented by investments and receivables and directlyattributable to activity to service corporate clients, is illustrated below and classified by balance sheetcategory according to IAS criteria.

Tradeable financial assets

Debt securities - The increase is due to the presence at year-end of convertible bonds linked toCapital Markets operations.

Equity securities - This category includes the holdings acquired as private equity investments (alreadymentioned in the paragraph dedicated to the Private Equity business), as well as shareholdings relatingto Capital Market operations.

Debt securities

Equity securities

Derivatives for trading

Embedded derivativesi

TOTAL

+ 85.4%

+ 44.7%

+ 7.7%

- 35.2%

- 8.7%

Change %

23.4

99.5

91.2

152.6

366.7

2007 2006

12.6

68.8

84.6

235.5

401.5

(euro millions)


No. of positions

of which: for capitalisation policies

Weighted value

of which: for capitalisation policies

Regulatory capital

Value of large loans (1)

Individual limits (2)

+ 3

- 1

+ 76,3

- 2,7

- 0,3

- 1,1

Change

14

2

1.960.9

315.0

765.7

76.6

306.3


11

3

1,884.6

700.9

768.4

76.8

307.4

(1) weighted exposure > 10% regulatory capital - (2) weighted exposure > 40% regulatory capital

(euro millions)

First 10 clients/groups




+ 3.9%

+ 3.9%

+ 2.6%

+ 2.7%

18.4%

26.0%

39.3%

52.8%

Value %

Change %

1,167.2

1,649.4

2,489.7

3,350.5


14.5%

22.1%

36.6%

50.2%

Value %

841.5

1,288.0

2,131.4

2,917.7

(euro millions)

RADICI FILM SPA

HUMANITAS

TECHOSP CLINICAL SERV.

IMMOBILIARE MIRASOLE ord. (ex ACH IMM.)

IMMOBILIARE MIRASOLE priv. (ex ACH IMM.)

PELLEGRINI GROUP SPA

BOUTY HEALTHCARE SPA

CAR TESTING SA

Other shareholdings

TOTAL

+ 27.0%

+ 28.4%

+ 27.6%

-

-

-

+ 54.5%

-

- 27.3%

+ 44.7%

36.0%

9.1%

9.1%

28.2%

15.8%

7.0%

22.2%

-

32.2%

Value % held

Change %

30,276.3

20,826.0

2,376.5

17,241.5

9,658.3

6,667.5

4,303.5

-

8,170.3

99,519.9

2007 2006

36.0%

7.1%

7.1%

44.0%

-

7.0%

22.2%

-

32.2%

Value % held

23,837.2

16,216.8

1,862.1

6,160.0

-

6,667.5

2,785.0

-

11,232.3

68,760.9

Financial assets held for trading:

shareholdings

(euro thousands)


Colori compositi



Derivatives for trading - The total market value of these is almost entirely attributable to hedgingderivatives for clients of Gruppo UBI where Centrobanca acts as a “factory” between the market andthe banks of the Group. Given their nature (back to back), the total and the changes in the total arematched with a corresponding entry under tradeable financial liabilities.

Embedded derivatives - These are embedded options in structured financial instruments which arematched by corresponding amounts included under financial liabilities.

Financial assets at fair value - This category includes investments in capitalisation policies issuedby leading insurance companies.

These investments were made in order to give a stable positive contribution to the interest marginbut with limited risk. In 2007, due to the strong increase in market rates, those certificates consideredto no longer have a sufficient yield were divested with a consequent marked reduction in the amountinvested (which fell by over € 2 billion to circa € 350 million) and in the contribution to the interestmargin (which fell from € 14 million to € 5 million).

Available for sale financial assets

Debt securities - This item includes corporate bonds from activities related to the strategic role ofthe Bank in supporting businesses.The increase in the spreads, particularly marked in the latter part of the year, increased the differencebetween the book value and the market value (circa € 17.7 million) and had a negative impact of €12 million on equity reserves. Given the aim and composition of the portfolio, there currently appearsto be no need to divest these securities, making losses, or to consider their reduction in value to beenduring.

Equity securities - This category includes shareholdings which are not controlling shareholdingsand are not held as part of the Private Equity business. The main change in their value is attributableto the sale of the stake in Parmalat for a gain of € 2.9 million.

With the exception of the operation concerning IW Bank and its subsequent classification amongholdings currently being divested, there are no changes from the previous financial year.

Shareholdings

Debt securities

Equity securities

TOTALE

+ 38.2%

- 83.8%

+ 36.4%

Change %

444.3

0.8

445.0

2007 2006

321.5

4.7

326.3


(euro millions)

Controlling shareholdings

Centrobanca Sviluppo Impresa SGR Spa

BPU Banca Internationala SA

TOTAL

Shareholdings of substantive influence

Group Srl

TOTAL

Shareholdings to be divested

IW Bank Spa

Finanzattiva Servizi Srl

TOTAL

TOTAL SHAREHOLDINGS

100.0%

0.0%

22.5%

33.8%

50.0%

% held

20.000

1

18.000

24.906.720

2.830.000

No. of shares Value

1,562.9

1.0

1,562.9

18.1

18.1

3,124.4

2,891.7

6,016.1

7,597.1

Shareholdings

2002

2003

2005

2003

2004

Year acquired

(euro thousands)


Colori compositi



Centrobanca Sviluppo Impresa SGR - During 2007, which closed with a positive result of €360,290 million, the company was active in:1. managing the portfolio of investments of the Fondo Sviluppo Impresa (Business DevelopmentFund, which had seven holdings at the start of the year that became six following the sale of theholding in Pirelli Ambiente Holding S.p.A.)2. offering the parent, Centrobanca S.p.A., consultancy services for its Private Equity holdings (7holdings of which 4 held with the Fund and 2 held separately)3. offering the Parent Company assistance with two other shareholdings (one part of the Fund andone in a listed company)4. carrying out the preliminary and preparatory work necessary to launch a new Investment Fund inthe course of the 2008 financial year.

With regard to point 1:� in 2007, the Fondo Sviluppo Impresa (Business Development Fund) concluded the acquisition ofa shareholding in GATTO ASTUCCI S.p.A. through the company, GATTO ASTUCCI GROUP S.p.A.,(subsequently the two companies were merged).� At the beginning of August, earlier than stipulated by the rights held by Fondo Sviluppo Impresa,an early exit from the holding in PIRELLI AMBIENTE HOLDING S.p.A. was negotiated. The divestmentpermitted the entire sum invested, plus a small profit, to be recovered.� The work of the company focused on managing the portfolio of investments belonging to theFondo Sviluppo Impresa (Business Development Fund). In particular, there was a constant effort toresearch ways of creating value in the companies in the portfolio. The management of Car TestingS.p.A. was supported in its attempt to find suitable solutions to further the industrial and financialrestructuring of the group.� In the latter part of the year, a mandate was given (together with the other shareholders, BSPRIVATE EQUITY and CENTROBANCA) to Ernst & Young to investigate the possibility of selling theentire holding in Radicifilm S.p.A..With regard to point 4, during the 2007 financial year, following the relevant activities in 2006, thegradual depletion of the liquid resources of the Fondo Sviluppo Impresa (Business Development Fund)and the market visibility gained from the operations done in 2006-2007, the feasibility study for thelaunch of a new investment fund continued.It focused primarily on the following points:� The proposal for a new Investment Fund to the potential sponsor, UBI BANCA, the IndustrialPlan of which includes strengthening its Private Equity business through the launch of a new investmentvehicle.� Sounding out potential investors, particularly foreign investors, about the launch of the new fund.

Group - This company was established in 2005 jointly with BancaAletti, Banca Akros and BIMERto gain access to senior positions in public issues of securities.At the end of 2007, the Italian branches belonging to the shareholder Banks of the Group totalledcirca 6,363. During 2007, Group promoted the activities of its shareholders in the IPOs of Prysmianand ENIA. The 2007 financial year closed with a profit of € 15,372 and net equity of € 92,700.

IW Bank SpA - (see the relevant section under Private Equity)

Finanzattiva Servizi Srl - Following conferral of all the assets of the company connected withproduction and supply of ICT services, including all related tangible and intangible assets as well asthe relative personnel, to UBI Centrosystem SpA at the end of the 2006 financial year, in 2007 thecompany focused on supplying administrative/ accounting services to UBI Pramerica SGR, generatingrevenues of € 2.1 million and net profit of € 65,000.Currently the planned merger operation with UBI Pramerica SGR has been postponed.


Colori compositi


Funding with charges

Financial liabilities

Hedging derivatives

The main forms of Centrobanca funding are securities issues (bonds and certificates of deposit) andrecourse to short-term interbank lines made available by the Parent Company. Debt to other banksis almost entirely composed of certificates of deposit with guarantees closely linked to the lendingactivity and derivatives trading on behalf of clients of Gruppo UBI.

The fall in funding with charges (circa € 1 billion) was due to the liquidity deriving from the sale ofthe capitalisation policies (-€ 1.7 billion) which was not immediately absorbed by loan growth.During 2007, the share of securitised deposits (bonds and certificates of deposit) with a correspondingreduction in recourse to interbank liabilities, in line with the guidelines on deposits in the 2007-2010Business Plan.Funding with charges also includes a subordinated loan of € 200 million from the Parent Company,part of Regulatory Tier 2 capital.

Like assets, available for sale financial liabilities are:� the market value of derivatives which are the hedging derivatives for clients of Gruppo UBI whereCentrobanca acts as a “factory” between the market and the banks of the Group. Given their nature(back to back), the total and the changes in the total are matched with a corresponding entry undertradeable financial assets.� embedded derivatives in structured financial instruments which are matched by correspondingamounts included under financial assets.

The financial liabilities also included IW Bank warrants for Centrobanca employees/managers; thesewere exercised in May 2007 as part of the aforementioned IPO and resulted in the cancelling of therelated provisions and in revenues of € 2.8 million included in the entry “Net profit on trading activities”.

Hedging transactions, part of ALM, are undertaken to minimise financial risk deriving from the variedcomposition of assets and liabilities in terms of expiry, indexation and currency. In particular, theycover three areas:

1) Coverage of structured loans to bring the cost into line with non-option levels. Notional value of€ 2,787 million (-4.4% compared to 2006);

2) Coverage of structured corporate bonds or fixed rate bonds to bring the yield into line with themarket and without option components. Notional value of € 164 million (+110%);

3) Coverage of the amount of fixed rate financing that exceeds an amount with similar characteristicsraised through interest rate swaps. This type of hedging was more frequent in the past due to a highernumber of fixed rate loans (assisted loans, agricultural loans and land loans). The existing contractshave a notional value of € 214 million (-29.9%).


Issued securities:

- bonds

- certificates of deposit

Due to banks:

- to UBI

- to other banks

Subordinated liabilities (tier 2)

Due to clients

Total

+ 11.2%

- 16.8%

+ 9.1%

- 32.6%

- 30.4%

- 32.6%

- 5.4%

- 12.1%

58.5%

38.4%

3.0%

0.2%

100.0%

Value %

% Change

in value

3,720.4

226.4

3,946.8

2,548.9

38.0

2,586.8

200.0

11.2

6,744.8

2007 2006

47.2%

50.1%

2.6%

0.2%

100.0%

Value %

3,346.6

272.2

3,618.8

3,783.9

54.6

3,838.5

200.0

11.8

7,669.1

Funding with charges

(euro millions)


Colori compositi


The income statement items included in the reclassified financial statements correspond to thoseof the draft income statement with the exception of the amount relating to tax rebates, which is netof both administrative expenses and management income.

Furthermore, the profit from the sale of the stakes in IW Bank (€ 10.4 million), originally acquired aspart of the Private Equity business, has been reclassified from “profit/loss from shareholdings”, inwhich it had been entered in accordance with IAS criteria, to “profit/loss from sale/repurchase ofloans and financial assets/liabilities” to reflect the operational nature of this transaction.


Interest margin

- on customer loans

- on financial assets

- other (late charges, corporate bonds, interbank)

Dividends

Net commissions

Net result from trading

Net result from hedging

Profit/loss from sale/repurchase of loans and financial assets/liabilities

Result of trading and hedging and from sale/

repurchase of loans and other financial assets

Other operating income/expense (1)

Operating revenues

Personnel costs

Other administrative expenses (1)

Total other administrative expenses

Adjustment to net value of fixed assets

Operating expenses

Operating result

Adjustments to net values for impairment of loans

Adjustments to net values for impairment of other financial assets/liabilities

Net provisions for risks and charges

Profit/Loss from shareholdings

Profit/Loss on disposal of investments

Profit/loss before taxes

Income taxes

Net profit for the period

-2.0%

18.8%

-46.8%

-79.6%

60.8%

23.6%

-44.9%

-28.0%

-20.1%

-4.3%

13.3%

1.2%

7.9%

-12.6%

7.4%

-8.7%

375.6%

-55.3%

-24.4%

-28.9%

-21.0%

Variazione %

93,456

84,310

6,770

2,376

7,888

29,051

13,754

415

20,128

34,298

3,450

168,142

(29,309)

(21,389)

(50,698)

(995)

(51,693)

116,449

(7,154)

(2,223)

1,173

23

108,268

(43,470)

64,799

2007 2006

95,340

73,871

16,535

4,933

4,907

23,505

3,870

7,220

36,541

47,631

4,320

175,702

(25,870)

(21,133)

(47,003)

(1,139)

(48,142)

127,560

9,507

4,205

247

1,668

51

143,239

(61,166)

82,073

Income Statement

(1) net of tax rebates of € 2,211 in 2007 and € 2,286 in 2006

(euro thousands)


Colori compositi



The reduction in the interest margin (-€ 1.9 million) is due to the lower contribution of financial assets(in particular, capitalisation policies) (-€ 9.8 million) and to the strong fall in interest on arrears (-€ 2.6million) (following a sharp decline in non-performing loans), offset by growth in the lending margin(+€ 10.4 million).

In the 2007 financial year, the average volumes traded were substantially unchanged on 2006 (€ 7.7billion) but with a change in the components of securities and loans for circa € 600 million; thereduction in non-performing loans and the positive business trend resulted in an increase of averagefree capital (the difference between interest bearing assets and interest bearing deposits), reducedthe need for funding with charges.

In 2007, market rates continued to rise: the average annual 1-month euribor increased 116 bpscompared to the average for 2006. The speedier adjustment of interest charges (+115 bps) comparedto interest income (on average 105 bps but with greater rigidity in bonds, +73 bps, due to the weightof capitalisation policies) reduced the difference between interest income and interest expenses by10 bps. However, the aforementioned increase in free capital stabilised the total average spread at18 bps.

The fall in overdue interest with repayment provisions on disputed loans or late payments (-€ 2.6million), due to the strong fall in non-performing loans, resulted in substantial stability in averagevolumes and spreads, a reduction of € 1.9 million in the interest margin.

Interest margin

Euribor 1 mm (benchmark)

Interest bearing assets

Loans to customers

Securities (policies & corporate bonds)

Interbanking assets

Late payment charges

TOTAL INTEREST BEARING ASSETS / MARGIN

Interest bearing liabilities

Debt securities in issue

Interbank deposits

TOTAL INTEREST BEARING LIABILITIES

Free capital

Average cost with free capital

Variation in rates

Spread with free capital

+ 10,4

- 9,8

- 2,6

- 1,9

4.14%

5.49%

4.45%

4.05%

5.22%

4.20%

4.23%

4.21%

4.05%

1.01%

1.18%

Ave

rag

e

val

ue

Changes

5,829.1

1,674.1

231.0

7,734.1

4,003.2

3,425.2

7,428.4

305.8

2007 2006

Rat

e %

84.3

6.8

2.4

93.5

Mar

gin

(1)

Rat

e %

Mar

gin

(1)

Ave

rag

e

val

ue

Rat

e %

Mar

gin

(1)

Ave

rag

e

val

ue

5,234.0

2,318.9

200.0

7,752.9

4,113.1

3,500.0

7,613.1

139.8

2.97%

4.42%

3.72%

3.02%

4.18%

3.06%

3.08%

3.07%

3.01%

1.11%

1.17%

73.9

16.5

4.9

95.3

+ 595

- 645

+ 31

- 19

- 110

- 75

- 185

+ 166

+ 1.16%

+ 1.07%

+ 0.73%

+ 1.03%

+ 1.05%

+ 1.14%

+ 1.15%

+ 1.15%

+ 1.04%

- 0.10%

+ 0.01%

(1) calculated on the average cost of interest bearing liabilities including free capital

(euro millions)


Colori compositi



In comparison to the stable interest margin, dividends, net commissions and net profit from normaltrading (excluding the disposal of non-performing loans and shareholdings not part of the PrivateEquity business) rose (in total +€ 28.6 million), reflecting the growth and increased weighting of thecorporate finance business and services complementing the traditional lending activities. The lowernet profit from hedging activities (-€ 6.8 million), from the sale of non-performing loans and securitiesnot part of the Private Equity business (-€ 26.6 million) and of other net operating income (-€ 0.9million) resulted in a total decrease in operating revenues of € 5.7 million.

The increase in dividends received (+€ 2.9 million) is primarily due to the good 2006 performanceof the companies in which the Private Equity division has shareholdings, in particular, Techosp andHumanitas (dividends of € 3.5 million) and IW Bank (€ 3 million).

The growth in the lending activity, both quantitative (as reflected in the amount of loans deliberatedand made) and qualitative (more corporate finance operations of greater complexity and generatinghigher value added) resulted in a strong increase in the commission component linked to the traditionallending activity (+36%). The contribution from Investment Banking increased compared to the previousyear (+28.5%), primarily due to the significant growth in Capital Markets. Since September 2006, theorder routing on behalf of the retail clients of Gruppo UBI has been centralised in the Parent Company.

Operating revenues

(importi in migliaia di euro)

Dividends

Net commissions

Net result from trading activities

Profit/loss from sale/repurchase of financial assets/liabilities (*)

Income from services/corporate activity

Net result of hedging activity

Profit/loss from sale/repurchase of financial assets/liabilities (**)

Other operating income/expenses

Other income

Total operating income

60.8%

23.6%

255.4%

88.5%

-94.2%

-72.6%

-20.1%

-71.2%

-7.1%

Variazione %

7,888

29,051

13,754

10,116

60,809

415

10,012

3,450

13,878

74,687

2007 2006

4,907

23,505

3,870

(30)

32,252

7,220

36,571

4,320

48,110

80,363

(*) Including € 10.5 million of profit from the sale of the stakes in IW Bank classified in the balance sheet under the entry 210 "profit from shareholdings"

(**) Net profit from the sale of non-performing loans and securities not part of the private equity business

From private equity operations (*)

From capital market operations

Other

Dividends

164.4%

-27.9%

-50.7%

60.8%

Change %

6,554

435

899

7,888

2007 2006

2,479

603

1,825

4,907

(*) including dividends from IW Bank

Commissions on financing

Commissions on guarantees given

Net assisted commissions

TOTAL COMMISSIONS ON LENDING

Commissions on Advisory and M&A

Commissions on Capital Markets

Commissions on Equity Sales

TOTAL COMMISSIONS ON INVESTMENT BANKING

Commissions on order routing

Commissions payable for other services

Commissions on other services

TOTAL OTHER SERVICES

NET COMMISSIONS

69.3%

2.3%

-7.8%

36.2%

-12.2%

164.7%

28.5%

-100.0%

-31.5%

234.5%

-

23.6%

Change %

15,563

4,087

3,549

23,199

3,328

2,060

484

5,873

(578)

556

(22)

29,051

2007 2006

9,191

3,996

3,849

17,035

3,791

778

4,570

2,577

(843)

166

1,900

23,505

(euro thousands)

(euro thousands)

(euro thousands)


Colori compositi



Revenues from offering hedging derivatives to corporate clients rose (+41%) due to the strong supportof the banks within the Group. Revenues from Private Equity come from the fair value attributed tothe holdings in Radici Film (+€ 4.9 million), Bouty (+€ 1.8 million), Humanitas and Techosp (+€ 1.5million) and from unrealised capital gains from the IW Bank warrant (€ 2.9 million). Gains on interestrate operations (+€2.6 million) are the result of a transaction completed by ALM at the end of Marchto offset the effect of an increase in interest rates which, given the structure of Centrobanca's assetsand liabilities, exposes it to a reduction in the interest margin.

Losses on securities are related to the financial assets managed by a mandate given to Pramerica(€ 100 million of invested capital), which were liquidated in July when the maximum potential losslimit was exceeded; in total, accounting for interest and dividends, the operating result was negativefor € 1.1 million. The entry “Other” includes a reduction in the value of the Sintonia Junior Note (-€2.5 million) due to the combined effect of an increase in interest rates and an increase in thesophistication of the model for calculating the fair value.

The strong movement in market rates, particularly in the last part of the year, had a negative impacton the calculation methods provided for by IAS for the effective hedging of structured bonds andresulted in a negative impact of € 1.1 million.In 2007, the divestment/maturity of bonds hedged by derivatives gave hedging income of € 0.8million, a decrease on the 2006 figure.The repurchase of proprietary structured bonds and their subsequent cancellation continued, generatingrevenues of € 0.7 million.

The 2006 profit from sale/repurchase of financial assets/liabilities of € 28 million was influenced by thesale of non-performing loans; in 2007 the comparable figure was € 7 million.The profit from the sale of stakes in IW Bank as part of the IPO, which under IAS is classified as “profiton sale of shareholdings” has been included in ordinary operating revenues since the shareholdings wereacquired as part of the private equity activity.Profit from sale of securities and shareholdings in 2007 reflects the sale of the Parmalat shareholding,acquired as part of the debt repayment whilst, in 2006, this figure was almost entirely attributable to thesale of the shareholding in Italease, which had not been acquired or managed as part of normal business.

Revenues from OTC operations

Revenues from Private Equity

Net revenues from Investment Banking

Losses on stocks and securities

Gains on interest rate operations

Other

NET RESULT OF TRADING ACTIVITIES

41.3%

255.4%

Change %

4,848

11,074

(110)

(1,710)

2,528

(2,875)

13,754

2007 2006

3,431

(1,389)

285

-

-

1,543

3,870

(euro thousands)

Hedging of AFS securities

Hedging of deposits

Hedging of active loans

Unwinding of liabilities

NET RESULT OF HEDGING OPERATIONS -94.2%

Change %

786

(1,108)

(5)

742

415

2007 2006

2,479

3,030

40

1,670

7,220

(euro thousands)

Sale of non-performing loans

Sale of shareholdings in IW Bank

Sale of securities and shareholdings

Other

PROFIT/LOSS ON SALE/REPURCHASE OF

FINANCIAL ASSETS/ LIABILITIES -44.9%

Change %

7,066

10,494

2,946

(378)

20,128

2007 2006

28,050

-

8,520

(30)

36,541

(euro thousands)


Colori compositi


The increase in personnel costs (+13.3%) was affected by extraordinary and non-recurring items (seetable below); net of these items, the increase in personnel costs would have been 4.9% (+2.5% inaverage per capita cost).

The trend in employee numbers shows an increase in the front office areas, which is in line with the2007-2010 Business Plan.

Employees (employees + secondments in - secondments out)

Administrative expenses

Personnel costs


Personnel costs

Other administrative expenses

TOTAL ADMINISTRATIVE EXPENSES

Net adjustments to value of tangible and intangible fixed assets

TOTAL OPERATING EXPENSES

+ 13.3%

+ 1.2%

+ 7.9%

- 12.6%

+ 7.4%

Change %

29,309

21,389

50,698

995

51,693

2007 2006

25,870

21,133

47,003

1,139

48,142

(euro thousands)

Personnel costs

Remuneration

Social security, national insurance and luncheon vouchers

Training

Temporary staff and collaborators

Directors remuneration

Redundancy fund

Training reimbursements

TOTAL

Adjustment for extraordinary items in 2007

- Training reimbursements

- Redundancy fund

- Impact of 2007 Budget Law on staff-leaving indemnity fund

- one-off distribution for 2007 relating to 2006 performance

Adjustment for extraordinary items in 2006

- write-back for excess utilisation of 2005 provisions

TOTAL ADJUSTED PERSONNEL COSTS

Average annual employees

Per capita costs

+ 12.7%

+ 19.3%

- 29.9%

+ 40.4%

+ 5.3%

+ 13.3%

+ 4.9%

+ 2.5%

Change %

26,563

1,224

164

476

733

347

(198)

29,309

198

(347)

440

(850)

28,750

311

92.4

2007 2006

23,575

1,026

234

339

696

25,870

850

689

27,409

304

90.2

Lending and Corporate Finance

Investment Banking and Markets

Assisted Finance

Commercial division

Governance and Support operations

TOTAL

AVERAGE TOTAL

108

56

34

56

83

337

334

2007

95

32

46

43

118

334

340

2005 2006

102

33

33

36

87

291

304

2003 2004

95

31

48

36

92

302

315

103

29

35

35

95

297

297

2007

111

44

30

50

89

324

311

20072004

P. I.Net Total

(euro thousands)


Colori compositi



Other administrative expenses had a small increase of 1.2%. Within this figure, costs for IT serviceslinked to the discontinued activity of order routing for the retail clients of Gruppo UBI (included in“services supplied by third parties”) fell.

The impairment adjustments to loans (-€ 7.2 million at year-end 2007 compared to +€ 9.5 millionat year-end 2006) were significantly affected by the different impact of the collective impairmentprocess on loans in bonis; whilst in 2006 the marked improvement in the risk ratios resulted in anincrease in value of € 16.7 million, in 2007, their stability, combined with the increase in the size ofthe loan portfolio and the impact of increasing the time horizons in the calculation methodology,resulted in adjustments totalling -€ 5.7 million. The analytical component alone shows an improvement(+€ 2.2 million compared with -€ 6.6 million) lowering the proportion of analytical adjustments, takenin isolation, on total net loans to clients from 0.48% in 2006 to 0.27% in 2007 and confirms thepositive trend of value recovery.Also in 2007, adjustments of € 2.5 million were made which were not directly imputable to the loanportfolio but to convertible bonds that were part of the Car Testing private equity operation, whichhas been classified, in accordance with IAS, under loans to customers.

Other financial assets are for financing and guarantee commitments given; the comment aboveconcerning collective impairment of cash loans also applies to these items.

The improvement in credit quality and the good trend in loan recovery was reflected in lower netprovisions for risks and costs linked to the lending activity for circa € 0.9 million (from +€ 0.2 millionto +€ 1.2 million).


Net value adjustments to loansand financial asset/liability

impairment


IT and telephone

Property and maintenance

Travel and transport

Consultancy and insurance

Advertising, promotional and marketing

Third-party services

Other

TOTAL

+ 8.2%

+ 13.8%

+ 30.3%

+ 3.8%

+ 63.4%

- 14.2%

+ 4.7%

+ 1.2%

Change %

3,085

2,225

576

7,837

696

5,936

1,034

21,389

2007 2006

2,852

1,956

442

7,551

426

6,918

988

21,133

Loan value analysis

Analytical write-downs

Analytical write-backs

Time reversal write-backs

NET

impact of gross analytical write-backs on loans

impact of net analytical write-backs on loans

Analytical valuations of L&R securities

Valuation of credits other than loans and securities

Collective valuation on cash loans and other

- due to change in collective impairment parameters

TOTAL

Valuation of other financial assets

- due to change in collective impairment parameters

TOTAL

- 38.7%

- 1.8%

- 98.1%

- 37.0%

- 133.7%

+ 0.20%

+ 0.15%

+ 344.8%

n.s.

n.s.

n.s.

n.s.

n.s.

Change %

-16,815

16,612

-203

2,437

2,234

-0,27%

0,04%

-2,913

-767

-5,707

-2,281

-7,154

-2,223

-506

-9,376

2007 2006

-27,409

16,920

-10,489

3,868

-6,621

-0,48%

-0,12%

-655

16,745

9,469

4,205

13,675

(euro thousands)

(euro thousands)


Colori compositi



The effective tax charge, equal to 40.15% of pre-tax profit, is lower than that of the 2006 financialyear (42.7%) despite a € 6 million negative effect on deferred taxes from a reduction in the IRES tax(from 33% to 27.5%) and IRAP (from 5.25% to 4.8176%) in 2008 under the Budget Law.

As already pointed out, the 2006 and 2007 financial years have been affected by non-recurring itemsand those not connected to the normal business activity:

For a uniform comparison and understanding of the income statement excluding non-recurring itemsand items not connected to the normal business activity, the income statements for 2007 and 2006have been reclassified.

Taxation

Income statementadjusted for non-recurring items

Net commissions

Profit from sale of loans & financial assets

Personnel costs

Adjustment to net value of loans

Adjustment to net value of other financial assets

Profit/loss from investments

Taxation

TOTAL INCLUDING TAXES

2,577

28,050

8,520

1,539

15,308

4,566

1,668

(32,561)

29,668

20062007

-

7,066

2,946

(559)

(7,103)

(1,679)

-

(6,343)

(5,671)

Income statement entry

Revenues from terminated activities (order routing)

Profit from sale of non-performing loans

Profit from sale of non-private equity securities

Adjustment to include only those for the period

Adjustment for collective impairment (2)

Adjustment for collective impairment (2)

From sale of non-private equity investments (3)

Net effect of fiscal changes and

tax effect of non-recurring items

non-recurring element

(1) Parmalat shares in 2007 and Italease shares in 2006

(2) Restatement of 2005 and 2006 collective impairment using PD 2007 and a 12-month time horizon

(3) Shareholding in Centrosiel

(euro thousands)

Interest margin

Dividends

Net commissions

Net result from trading

Net result from hedging

Profit/Loss from sale/repurchase of loans and financial assets/liabilities

Other administrative income/expenses (1)

Operating revenues

Personnel costs

Other administrative expenses (1)

TOTAL OTHER ADMINISTRATIVE EXPENSES

Adjustment to net value of fixed assets

Operating expenses

Operating result

Adjustments to net values for impairment of loans

Adjustments to net values for impairment of other financial assets/liabilities


Profit/loss from shareholdings

Profit/loss on disposal of investments

PROFIT/LOSS BEFORE TAXES

Income taxes

PROFIT/LOSS FOR THE PERIOD

cost/income ratio

ROE

-2.0%

60.8%

38.8%

255.4%

-94.2%

-20.1%

15.8%

4.9%

1.2%

3.3%

-12.6%

2.9%

23.2%

-99.1%

50.8%

375.6%

-55.3%

32.8%

29.8%

34.5%

-4.0%

3.3%

Change %

93,456

7,888

29,051

13,754

415

10,116

3,450

158,130

(28,751)

(21,389)

(50,140)

(995)

(51,135)

106,995

(51)

(543)

1,173

23

107,597

(37,127)

70,469

32,34%

12,54%

2007 2006

95,340

4,907

20,928

3,870

7,220

(30)

4,320

136,555

(27,410)

(21,133)

(48,543)

(1,139)

(49,681)

86,874

(5,801)

(360)

247

51

81,010

(28,605)

52,405

36,38%

9,21%

Reclassified income statement

(1) net of tax rebates of € 2,211 in 2007 and € 2,286 in 2006

(euro thousands)


Colori compositi



Operating revenues rose 15.8% primarily due to the contributions from Corporate Finance, InvestmentBanking (commissions and trading profit) and Private Equity (dividends and profits on divestment).

The operating result increased 23.2%, helped by only a slight increase in expenses (+2.9%), andthere was an improvement in the cost/income ratio of four percentage points.

The value of loans outstanding, calculated for both financial years using uniform criteria and parametersfor the collective impairment on loans in bonis, shows an improvement in net adjustments in 2007compared to 2006; they move from -€ 5.8 million to zero.

Net profit, reclassified using the effective tax rate and stripping out the extraordinary effect of changesin fiscal law, increased to € 70.4 million (+34.5%) with a 3.3% point increase in ROE compared to2006.

At the year-end the Group capital was as follows:

The change in the valuation reserve is entirely due to a net negative value deriving from the differencein the market value and the book value of the corporate bond portfolio classified under available forsale financial assets.

The share capital is made up of 336,000,000 shares.

It is proposed that the Shareholders' meeting approve the allocation of the profit for the period, equalto € 64,798,627.58, as follows:

Capital

Share capital

Proposed allocationof profit for the period

Capital

Reserves

Valuation reserves

Profit (Loss) for the period

TOTAL

+ 0.0%

+ 3.9%

- 21.0%

- 3.7%

Change %

369,600

202,271

-9,959

64,799

626,711

2007 2006

369,600

194,755

4,349

82,073

650,778

Item

(euro thousands)

5% Legal reserve 3,239,931.3815% other profit reserves 9,719,794.14Euro 0.154 dividend payable on 336,000,000 shares in issue 51,744,000.00Use of retained profits (*) 94,902.06

64,798,627.58

(*) The Retained profits reserve will rise from € 104,401 to € 199,303


Colori compositi



Assuming that the proposed allocation of profit for the year is approved, the net equity and regulatorycapital is as follows:

The allocation of the profit of the 2007 financial year to equity reserves partly compensates thereduction caused by the variation in the portfolio value of the available for sale financial assets (-€13.7 million) and the increase in deductions for holdings in banks and financial companies (-€ 1.6million); the regulatory capital was € 766 million (€ 768 million in December 2006).

Despite the decrease in assets, risk requirements increased 3.7%, due to the exit from instrumentswith a lower risk profile (insurance company capitalisation policies in part hedged by banking creditdefault swaps) and their replacement by loans to customers.

The total regulatory capital ratio - equal to 8.9% - remains above the minimum level required by banksbelonging to a Banking Group (7%), raising the possibility for further growth in assets while remainingwithin the financial parameters of the regulatory legislation (the potential increase in assets would beequal to € 2.3 billion).

Regulatory capitaland capital requirements

Base Capital (narrow definition)

Intangible fixed assets

Negative reserves for AFS securities

Shareholdings in banks & financial companies to be deducted

Base Capitale (a)

Valuation reserves

Reserves for computable AFS securities

Subordinated liabilities

Other

Shareholdings in banks & financial companies to be deducted

Supplementary capital (b)

Regulatory capital (c) = (a+b)

TOTAL RISK REQUIREMENTS

- Credit risk

- Market risk

risk on debt securities held

risk on equity securities held

other market risks

- Other risk requirements

Free capital

Risk Weighted Assets (RWA) (d)

Base capital / RWA (a/d)

Regulatory capital / RWA (c/d)

+ 2.2%

- 0.1%

- 1.1%

- 0.3%

+ 3.7%

+ 2.3%

+ 42.0%

- 24.6%

- 12.8%

+ 3.7%

- 3.6%

- 3.9%

Change %

584.9

(4.7)

(12.1)

(2.2)

566.0

1.7

200.0

0.1

(2.2)

199.7

765.7

601.0

566.2

32.3

10.8

18.3

3.2

2.5

164.7

8,593.8

6,59%

8,91%

December 2007 December 2006 (*)

572.5

(4.7)

(1.4)

566.4

1.7

1.6

200.0

(1.4)

201.9

768.4

579.5

553.4

22.7

3.8

14.8

4.1

3.4

188.9

8.287.2

6,84%

9,27%

(euro millions)

(*) Although the final figure is unchanged, the Regulatory capital at 31/12/2006 has been reclassified under current rules for

comparable purposes


Colori compositi


Balance sheet to 31.12.2007 with comparative figures at 31.12.2006


FINANCIAL STATEMENTS

BALANCE SHEET

10.

20.

30.

40.

60.

70.

80.

90.

100.

110.

120.

130.

140.

150.

-13.1%

-8.7%

-82.5%

36.4%

31.5%

7.2%

1.0%

-81.4%

-79.2%

-1.5%

n.s.

-

-19.4%

-11.1%

20.4%

-

-12.1%

-12.1%

Assets 31.12.2007 31.12.2006

(*)

-6,141

-34,788,456

-1,664,672,999

118,783,727

95,175,464

416,979,924

554,733

-4,645,870

-6,007,852

-932,393

-15,598

-

-29,646,450

-1,704,899

-27,941,551

6,016,122

-8,204,651

-1,111,410,440

Absolute change % Change

Change 31.12.07 versus 31.12.06

(euro)

(*) The figures to 31 December 2006 differ from published figures as they have been

reclassified using accounting practices and rules necessitated by the merger accounting of

the ex-BPU and ex-LOMBARDA E PIEMONTESE Groups which formed Gruppo UBI Banca

Please see Notes to the Accounts - Part A.1 - Section 4 - Paragraph entitled "Alignment of Accounting Practices and

Procedures"

Cash and liquid assets

Tradeable financial assets

Fair value financial assets


Loans to banks

Loans to customers

Hedging instruments

Value adjustments to generically hedged

financial assets (+/-)

Shareholdings

Tangible assets

Intangible assets

of which:

- goodwill

Tax assets

a) current

b) advance

Non-current assets and assets in course of divestment

Other assets

TOTAL ASSETS

40,571

366,725,178

352,438,832

445,033,749

397,543,538

6,173,656,425

58,682,971

1,059,451

1,580,976

61,160,519

4,670,101

4,654,502

122,805,945

13,637,294

109,168,651

6,016,122

59,545,691

8,050,960,069

46,712

401,513,634

2,017,111,831

326,250,022

302,368,074

5,756,676,501

58,128,238

5,705,321

7,588,828

62,092,912

4,685,699

4,654,502

152,452,395

15,342,193

137,110,202

-

67,750,342

9,162,370,509


Colori compositi


(*) The figures to 31 December 2006 differ from published figures as they have been

reclassified using accounting practices and rules necessitated by the merger accounting of

the ex-BPU and ex-LOMBARDA E PIEMONTESE Groups which formed Gruppo UBI Banca

Please see Notes to the Accounts - Part A.1 - Section 4 - Paragraph entitled "Alignment of Accounting Practices and Procedures"


10.

20.

30.

40.

60.

80.

100.

110.

120.

130.

160.

180.

200.

-31.0%

-5.4%

9.1%

-25.0%

-11.9%

-17.1%

-5.2%

-17.9%

-21.4%

5.2%

-24.9%

-3.3%

-26.3%

-299.7%

3.9%

-

-21.0%

-12.1%

Assets 31.12.2007 31.12.2006

(*)

-1,251,653,114

-635,321

328,017,385

-80,247,368

-30,661,290

-16,394,910

-335,286

-16,059,624

-27,921,234

284,007

-7,494,749

-61,880

-7,432,869

-14,945,400

7,515,923

-

-17,274,369

-1,111,410,440

% Change

Change 31.12.07 versus 31.12.06

(euro)

Due to banks

Due to customers

Debt securities in issue

Tradeable financial liabilities

Hedging instruments

Tax liabilities

a) current

b) deferred

Other liabilities

Employee termination fund

Provisions for risks and charges

a) retirement provisions

b) other provisions

Revaluation reserve

Reserves

Share capital

Profit/ Loss for the period

TOTAL LIABILITIES AND NET EQUITY

2,786,844,811

11,164,162

3,946,797,560

241,251,243

227,734,380

79,646,547

6,129,157

73,517,390

102,420,133

5,764,520

22,625,607

1,787,717

20,837,890

-9,958,847

202,271,325

369,600,000

64,798,628

8,050,960,069

4,038,497,925

11,799,483

3,618,780,175

321,498,611

258,395,670

96,041,457

6,464,443

89,577,014

130,341,367

5,480,513

30,120,356

1,849,597

28,270,759

4,986,553

194,755,402

369,600,000

82,072,997

9,162.370,509

Absolute change


Colori compositi


(*) The figures to 31 December 2006 differ from published figures as they have been reclassified using accounting practices

and rules necessitated by the merger accounting of the ex-BPU and ex-LOMBARDA E PIEMONTESE Groups which formed

Gruppo UBI Banca Please see Notes to the Accounts - Part A.1 - Section 4 - Paragraph entitled "Alignment of Accounting

Practices and Procedures"

10.

20.

30.

40.

50.

60.

70.

80.

90.

100.

120.

130.

140.

150.

160.

170.

180.

190.

200.

210.

240.

250.

260.

270.

290.

19.5%

28.0%

-2.0%

15.3%

-57.5%

23.6%

60.8%

255.4%

-94.2%

-73.6%

-76.1%

-65.4%

-10.0%

-168.4%

-175.2%

-152.9%

-21.8%

7.3%

13.3%

0.8%

375.6%

-10.0%

-68.9%

-14.3%

8.6%

529.2%

-55.3%

-24.6%

-28.9%

-21.0%

-21.0%

338,027,134

-242,687,339

95,339,795

26,198,170

-2,693,383

23,504,787

4,906,925

3,870,395

7,219,572

36,540,606

28,020,168

8,520,438

171,382,080

13,712,673

9,507,337

4,205,336

185,094,753

-49,289,203

-25,870,375

-23,418,828

246,592

-1,088,294

-50,213

6,606,115

-43,575,003

1,667,982

51,480

143,239,212

-61,166,215

82,072,997

82,072,997

Items 31.12.2007 31.12.2006

(*)

403,975,482

-310,519,692

93,455,790

30,195,023

-1,144,228

29,050,795

7,887,916

13,754,398

415,450

9,633,998

6,687,602

2,946,396

154,198,347

-9,376,472

-7,153,845

-2,222,627

144,821,875

-52,909,223

-29,309,491

-23,599,732

1,172,777

-979,318

-15,598

5,660,678

-47,070,684

10,494,187

22,999

108,268,377

-43,469,749

64,798,628

64,798,628

65,948,348

-67,832,353

-1,884,005

3,996,853

1,549,155

5,546,008

2,980,991

9,884,003

-6,804,122

-26,906,608

-21,332,566

-5,574,042

-17,183,733

23,089,145

-16,661,182

-6,427,963

-40,272,878

3,620,020

-3,439,116

-180,904

926,185

108,976

34,615

-945,437

-3,744,359

8,826,205

-28,481

-35,219,513

17,696,466

-17,274,369

-17,274,369

Absolute change % Change

Change 31.12.07 versus 31.12.06

Interest income and similar income

Interest costs and similar expenses

Interest margin

Commission income

Commission expenses

Net commissions

Dividends and similar income

Net result of trading activities

Net result of hedging activities

Prof/loss from sale or repurchase of:

a) loans

b) available for sale financial assets

Net trading result

Adjustments to net values for impairment in:

a) loans

d) other financial operations

Net result of financial operations

Administrative costs:

a) personnel costs

b) other administrative costs


Adjustments to net values of tangible assets

Adjustments to net values of intangible assets

Other operating expenses/ income

Operating expenses

Profit/loss on shareholdings

Profit/loss on disposal of ivestments

Profit/loss before taxes

Income taxes

Profit/loss net of taxes

Net profit/loss for the period

Income statement at 31.12.2007 with comparative figures to 31.12.2006


(euro)

INCOME STATEMENT


Colori compositi



REPORT ON CHANGESIN NET EQUITYAT 31 DECEMBER 2007

Items Balance

at 31.12.2006

Reserves

Capital:

a) ordinary shares

b) other shares

Share Price Premium

Reserves:

a) profit reserves

b) other shares

Valuation Reserves

a) available for sale financial assets

b) cover of financial flows

c) special revaluation law reserves

d) other: actuarial gains/losses on employee

termination fund (TFR)

Equity instruments

Treasury shares

Profit for the period

Net Equity

369,600,000

369,600,000

194,755,402

84,323,264

110,432,138

4,986,553

3,290,889

1,695,664

82,072,997

651,414,952

Allocation of previous

year profits Change

to opening

balance (1)

-637,074

-637,074

-637,074

Balance

at 1.1.2007

369,600,000

369,600,000

194,755,402

84,323,264

110,432,138

4,349,479

3,290,889

1,695,664

-637,074

82,072,997

650,777,878

-73.920.000

-73.920.000

Dividends and

other distribution

8,152,997

8,152,997

-8,152,997

-637,074

-637,074

-14,308,326

-15,051,969

743,643

-14,945,400

Changes

to reserves

(2)

(2)

(3)

(4)

Notes to the Report to 31.12.2007:

(1) With regard to changes in opening balance refer to the paragraph "Changes in accounting standards" in Part A.1, Section

2 of the Notes to the Accounts

(2) Allocation of the net negative reserves, created by modifications to the balances of 1.1.2007, to the Profit reserves

(3) Net variations in fair value/returns to the income statement on debt and equity securities held or sold, of which:

-12.289.059 due to exposure to capital losses on debt securities

-2.789.675 due to the sale of Parmalat shares that were in the portfolio at 31.12.2006

26.765 due to exposure to capital gains on equity securities

(4) of which: 106,569 actuarial profits for the period 1.1.2007-31.12.2007


Colori compositi



369,600,000

369,600,000

-

-

202,271,325

91,839,187

110,432,138

-9,958,847

-11,761,080

-

1,695,664

106,569

-

-

64,798,628

626,711,106

Issues of

new shares

Purchase

of own shares

Derivatives on

own shares

Extraordinary

dividend

distribution

Change

in equity

instruments

Stock

options

Net Equity operations Changes in the year

Profit

for the period

Net Equity

at 31.12.2007

64,798,628

64,798,628

(euro)


Colori compositi



1. Operations

- result for the period (+/-)

- capital gains/losses on financial assets held for trading

and on financial assets/ liabilities valued at fair value (-/+)

- gains/losses on hedging transactions (-/+)

- write-downs/write-backs of net values for impairment (-/+)

- write-downs/write-backs of net values of tangible and intangible fixed assets (+/-)

- net provisions for risks and charges and other expenses/ income (-/+)

- unpaid taxes (+/-)

- write-downs/write-backs of net values of assets in course of divestment net of any tax effect (+/-)

- other adjustments

2. Cash generated/absorbed by financial assets

- financial assets held for trading

- financial assets valued at fair value

- available for sale financial assets

- loans to banks: current

- loans to banks: other

- loans to customers

3. Cash generated/absorbed by financial liabilities

- due to banks: current

- due to banks: other

- due to customers

- debt securities in issue

- tradeable financial liabilities

- financial liabilities valued at fair value

- other liabilities

NET CASH GENERATED/ ABSORBED BY OPERATIONS

B. INVESTMENT ACTIVITY

1. Cash generated by

- sales of shareholdings

- dividends received from shareholdings

- sales of financial assets held to maturity

- sales of tangible assets

- sales of intangible assets

- sales of business units

2. Cash absorbed by

- purchase of shareholdings

- purchase of financial assets held to maturity

- purchase of tangible assets

- purchase of intangible assets

- purchase of business units

NET CASH GENERATED/ ABSORBED BY INVESTMENTS

C. FINANCING ACTIVITY

- issue/purchase of own shares

- issue/purchase of equity instruments

- dividend distribution and other allocations

NET CASH GENERATED/ ABSORBED BY CAPITAL

NET LIQUIDITY GENERATED/ABSORBED IN THE PERIOD

NOTE: (+) generated, (-) absorbed

119,328,488

82,072,997

-3,870,395

-7,219,572

-13,674,750

1,138,507

-284,515

61,166,216

-

-

-362,487,544

1,937,697,228

-2,017,111,831

-24,280,970

129,965,863

-31,555,345

-357,202,489

302,106,546

-1,035,591,246

1,505,488,239

-4,213,666

-160,216,062

-69,809,183

-

66,448,464

58,947,490

4,909,087

2,162

4,906,925

-

-

-

-

-4,113

-4,113

4,904,974

-63,840,000

-63,840,000

12,464

(A+B+C)

86,889,750

64,798,628

-13,754,398

-415,450

-9,376,472

994,916

1,172,777

43,469,749

-

-

1,068,522,340

34,788,456

1,664,672,999

-118,783,727

12,508,185

-107,683,649

-416,979,924

-1.100,219,830

545,633,214

-1.797,286,328

-635,321

328,017,385

-80,247,368

-

-95,701,412

55,192,260

19,347,752

11,459,836

7,887,916

-

-

-

-

-626,153

-626,153

-

-

-

-

18,721,599

-

-

-73,920,000

-73,920,000

-6,141

(A+B+C)

A. Operating activity 31.12.2007 31.12.2006

CASH FLOW STATEMENTINDIRECT METHOD

(euro)


Colori compositi


RECONCILIATION

KEY DATAAND RATIOS

(*) 2007 operating income includes 10.5 million from the sale of the stakes in IW Bank

(**) Adjusted for those not related to the period


Cash and cash equivalents at the start of the period

Net cash generated/absorbed in the period

Cash and cash equivalents: foreign exchange impact

Cash and cash equivalents at the end of the period

34,248

12,464

46,712

46,712

-6,141

-

40,571

Items 31.12.2007 31.12.2006

(euro)

Structural ratios and data

Net customer loans/ total assets

Customer deposits/ interbank deposits

Bonds and subordinated loans/ mortgages and loans

Net equity (excluding profit for the perioid)/ total liabilities

Average number of employees

Number of branches

Profitability ratios and data

Profit for the period (euro thousands)

ROE (profit /net equity excluding profit for the period)

ROA (profit/total assets)

COST / INCOME (operating income/operating expenses) (*)

Interest margin/ operating income

Personnel costs/ operating income

Risk ratios

Net non-performing loans/ loans to customers

% non-performing loan cover (write-downs/ gross non-performing loans)

Net non-performing loans/ Regulatory capital

Net non-performing and watch-list loans/ loans to customers

% cover of non-performing + watch-list loans

Capital ratios

Tier 1 (base capital/ total weighted capital)

Solvency ratio (Regulatory capita/ total weighted capital)

Productivity ratios (euro thousands)

Total assets/ average number of employees

Operating income/ average number of employees

Personnel costs (**) / average number of employees

Capital data

Net loans to customers

of which: net non-performing loans

Net equity (excluding profit for the period)

Regulatory capital

+ 13.97%

- 16.08%

- 7.20%

- 0.12%

+ 2.30%

+ 0.00%

- 21.05%

- 2.88%

- 0.09%

+ 3.33%

+ 1.33%

+ 1.78%

- 0.37%

+ 2.44%

- 2.46%

- 0.58%

- 2.54%

- 0.17%

- 0.29%

- 13.83%

- 12.81%

+ 2.53%

+ 7.44%

- 32.75%

- 1.30%

- 0.35%

Change %

76,68%

142,02%

63,50%

6,98%

311

7

64.799

11,53%

0,80%

30,74%

55,58%

17,43%

0,61%

66,77%

4,91%

1,28%

53,07%

6,66%

8,98%

25,887

541

92

6,173,656

37,908

561,912

765,698


62.72%

89.37%

59.02%

6.21%

304

7

82.073

14.42%

0.90%

27.41%

54.25%

15.02%

0.98%

64.33%

7.37%

1.86%

55.61%

6.84%

9.27%

30.041

576

90

5,746,264

56,367

569,342

768,379

(euro thousands)


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Honorary Chairman Lino Venini

Board of Directors:

Chairman (*) Mario Boselli

Vice Chairman (*) Giorgio Frigeri

Directors Giampiero Auletta Armenise (*), Emilio Cugini,Argante Del Monte, Giuseppe Miroglio, Aldo Fumagalli Romario,Luciano Goffi, Domenico Guidi, Rossella Leidi (*),Andrea Pisani Massamormile (*), Giorgio Ricchebuono,Giuseppe Sciarrotta, Marco Venier, Costantino Vitali (*)

Secretary Valeriano D’Urbano

Stautory Auditors:

Chairman Luigi Guatri

Acting Auditors Giovanni Frezzotti, Pecuvio Rondini

Supplementary Auditors Antonio Amaduzzi, Rodolfo Luzzana

Management:

Director General Valeriano D’Urbano

Vice Director General Mario Ramelli

Vice Director General Leonardo Siccoli

Independent Auditors: KPMG S.p.A.

(*) Members of the Executive Committee


COMPANY OFFICERSAT 31 DECEMBER 2007


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-Copertina e retro 27-05-2008 14:46 Pagina 1

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