Banco Popolare

Presentation of the Business Plan

14 December 2006 @ 2:30 pm

Disclaimer
In connection with the proposed business combination, the required information document will be sent to Commissione Nazionale per le Società e la Borsa
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disclaim any responsibility or liability for the violation of such restrictions by any person.
This presentation does not constitute or form part of, and should not be construed as, any offer or invitation to subscribe for, underwrite or otherwise acquire,
any securities of Banco Popolare di Verona e Novara or any member of its group, any securities of Banca Popolare Italiana or any member of its group nor
should it or any part of it form the basis of, or be relied on in connection with, any contract to purchase or subscribe for any securities in Banco Popolare di
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intend to participate in the proposed tender offers are reminded that any such participation may only be made solely on the basis of the information contained in
the respective offer documents to be issued by Banco Popolare di Verona e Novara and Banca Popolare Italiana in accordance with the relevant tender offer and
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proposed to be offered in Banco Popolare di Verona e Novara have not been and will not be registered under the Securities Act and may not be offered or sold in
the United States except to QIBs in reliance on an exemption from, or transaction not subject to, the registration requirements of the Securities Act.
The information contained in this presentation is for background purposes only and is subject to amendment, revision and updating. Certain statements in this
presentation are forward-looking statements under the US federal securities laws about Banco Popolare di Verona e Novara and Banca Popolare Italiana and
their combined business after completion of the proposed business combination. Forward-looking statements are statements that are not historical facts. These
statements include financial projections and estimates and their underlying assumptions, statements regarding plans, objectives and expectations with respect
to future operations, products and services, and statements regarding future performance. Forward-looking statements are generally identified by the words
“expects”, “anticipates”, “believes”, “intends”, “estimates” and similar expressions. By their nature, forward-looking statements involve a number of risks,
uncertainties and assumptions which could cause actual results or events to differ materially from those expressed or implied by the forward-looking
statements. These include, among other factors, the satisfaction of the conditions of the offering, changing business or other market conditions and the
prospects for growth anticipated by the Banco Popolare di Verona e Novara’s and Banca Popolare Italiana’s management. These and other factors could
adversely affect the outcome and financial effects of the plans and events described herein. Forward-looking statements contained in this presentation regarding
past trends or activities should not be taken as a representation that such trends or activities will continue in the future. Banco Popolare di Verona e Novara and
Banca Popolare Italiana do not undertake any obligation to update or revise any forward-looking statements, whether as a result of new information, future
events or otherwise. You should not place undue reliance on forward-looking statements, which speak only as of the date of this presentation.

1
Agenda

I. Investment Story Highlights

II. Value Creation Drivers
III. Financials & Capital Management
IV. Management Team
V. Timetable
VI. Closing Remarks

Appendix

2
I. Investment Story Highlights

3
Investment Story Highlights
Competitive Strengths of the Newcomer Group in the Italian Banking Top League

1 2 3 4

Efficiency Qualified and Flexibility in

Distribution
advantages diversified Capital
franchise
compared to business Management
strength
peers portfolio Strategy

„ Excellent „ Strong starting point „ Consumer Credit „ Recurrent earnings

geographical fit position on
„ Asset Management „ Unrealized capital
among the two personnel and
gains
Groups administrative costs „ Corporate Finance
and Investment „ Capital tools and
„ Franchise quality „ Demonstrated track
Banking Securitization
record
„ Local brand
strength „ Full benefit from
economies of scale

4
Investment Story Highlights
Distribution Franchise Strength

„ Excellent geographical fit:

– No branch overlap
– Average branch market share of 10% in the 6
main regions in northern Italy:
- Liguria: 13.8%
- Tuscany: 11.3%
- Veneto: 9.2%
- Piedmont: 9.2%
Branch market - Lombardy: 8.9%
share - Emilia Romagna: 7.3%
– Market share of more than 10% in 21 provinces
<1.0%
1.0%<=X<2.5% „ Franchise quality:
2.5%<=X<7.5% – Young average age of employees
7.5%<=X<15% – Good level of education
=> 15% – High ratio of front office/total employees
„ Well recognized brands in core market regions

Excellent competitive position in the core Retail/SME banking business

5
Investment Story Highlights
Efficiency Advantages

„ HR cost base advantage ( - 4 % vs. peers1):

Total operating cost per employee (2005)²
– Young resources compared to competitors (€k)
(46% of resources are <40s) 129
130
– Flat commercial network organization 122
125
121 121
120
120 117 117 118
114
110
110

„ Sound cost management: 101

100
– Operating costs3/customer funds: 1.0% of
89
BPI+BPVN vs 1.5% of competitors 90

80

– Operatingcosts3/banking volumes4:
0.7% of
70
BPI+BPVN vs 1.0% of competitors

L
N

U
it

I
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M
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em

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BP

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te

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BP

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ed

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Pa
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cr

In

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Cr
i
Un

V
Ca

S.
BP

t
An
Demonstrated track record in cost reduction: stable reduction of
general expenses in BPVN (CAGR = - 3.4% in 2002-2005)

(1) Banca Lombarda, BPM, BPU, Capitalia, CR Firenze, Credem, Banca Intesa, MPS, San Paolo, Unicredit (Sept. 2006).
(2) Prometeia benchmark (3) Total Operating costs including depreciation
(4) Banking volumes refer to custormer loans and direct and indirect customer funds 6
Investment Story Highlights
Qualified and Diversified Business Portfolio

Market opportunities Group business position

„ Italy’s fastest growing business „ 100% of Ducato: #5 Italian player with

segment (expected market growth market share of 5.5%
Consumer
CAGR 2006-2009 >13%) „ 49% of Linea: Market share = 3.8%
Credit
„ 20% of Delta: Market share = 4.3%

„ High savings rate in Europe „ 100% of Aletti Gestielle Sgr Market share:
Asset „ Significant opportunities in the „ 100% of Bipitalia Gestioni Sgr • BPVN 2.9%
pension business due to the • BPI 1.1%
Mgmt. „ 28% of Arca Sgr • Arca 4.3%
impending pension reform

„ 100% of Efibanca
„ Acceleration of opportunities due to
Corporate „ 100% of Aletti Merchant
Mid-Corporate transformation
Finance

Strong competitive position in fast growing businesses

(captive and non captive)
7
Investment Story Highlights
Flexibility in Capital Management Strategy

„ In addition to strong generation of recurrent net Potential capital impact

income: 2007-2010 (€ bn)

- Significant unrealized capital gains in equity up to 1.4

stakes and Real Estate Assets

- Room for issuing hybrid capital instruments up to 0.7

- Possibility of reducing of RWAs through up to 0.5

securitization of customer loans
- Retail mortgage loans
- Mid-Corporate loans

- Possible opening of minority stakes of product up to 0.5

factories to partners
up to 3.1

8
II. Value Creation Drivers

9
Value Creation Drivers
Overview 2007-2010 Business Plan

FROM TO
Top-down analysis of the merger project Detailed bottom-up analysis
(16 Oct. 2006) (14 Dec. 2006)
€m pre-tax €m pre-tax
145 500 127 500

146
135

50% of 48% of
220 227
top-down bottom-up
full full
potential potential

Cost
x Revenue
x Improvement
x Total
Total Cost
x Revenue
x Productivity
x Total
Total
synergies synergies in pro-capita synergies synergies alignment
profitability

Full confirmation of value creation opportunities through

detailed bottom-up analysis
10
Value Creation Drivers
Cost Synergies (2007-2010 Business Plan)

Gross Cost Synergies (€m) Main Drivers

% of total
„ Personnel cost savings
Personnel 91
40% – ~1,350 resources
– mainly HQ staff and BO

IT / Back Office
Administrative „ IT system integration
67 30%
Expenses „ Back Office optimization

General „ Single purchasing unit

Administrative 69 30%
Expenses „ Wide adoption of cost management best
practice

227 100%
„ Leveraging on track record in achieving
Total
economies of scale

11
Value Creation Drivers
Savings on Personnel Costs

Rationale Impact (€m)

„ Benefiting from economies of scale:

- reducing weight of Headquarters and Incentivized exits
Back Office
- leveraging on new IT procedures ∼ 1,350
€ 91m
- improved efficiency of product factories
22%
840
„ Synergies on HR costs mainly limited to
non-sales personnel:
- net reduction of about 1,350 units over
the business plan period, through
turnover effect and incentive plans 510
- maintaining business plan targets on
network growth (excellent fit with no
overlap and investments in fast growing Number of Personnel
Turnover resources synergies
businesses) without
substitution

12
Value Creation Drivers
Economies of Scale and Best Practice on IT/BO Costs

Rationale Impact (€m)

„ 31% of total IT/BO costs (€ 123m) can be -€67m (-17%)

optimized by 9% through the adoption of best
practices (e.g. telecommunication services, 401 11
51

non-central IT) -9%

5 334
123 Best practice
cost alignment
-33%
„ 43% of total IT/BO costs (€ 173m) can be
reduced by over 30% due to economies of
scale (e.g. central IT, software development, Synergies
173 of scale
internalization of IT body rentals)

„ 26% of total IT/BO costs (€ 105m) can be

105
Not impacted
optimized only in the medium-long term (e.g. by synergies
information providers, utilities) and, therefore,
have not been included as a saving target in Total IT/BO costs Alignment Scale Internalization Total IT/BO costs
pre-synergies synergies effect after synergies
the business plan (2010E) (2010E)

13
Value Creation Drivers
Economies of Scale and Best Practice on Other Administrative Costs

Rationale Impact (€m)

-€69m (-9%)
„ 30% of other administrative costs (€ 219m) can be 729 29
40
optimized by 13% through the adoption of best 660
-13%
practices (e.g. facility management) 219 Best practice -19%
cost alignment

„ 29% of the (€ 211m) can be optimized through the

adoption of best practices and the positive Synergies of scale +
effect of economies of scale (e.g. office 211 cost alignment

materials)

„ 41% of the (€ 299m) can be optimized only in the

Not impacted
long term (e.g. depreciations, leases, marketing 299
by synergies
(amortization,
expenses) and, therefore have not been included rentals, ..)
as a saving target in the business plan
Total costs Pure alignment Scale Total costs
pre-synergies effect and after synergies
(2010E) alignment (2010E)

14
Value Creation Drivers
Revenues (2007-2010 Business Plan)

Gross revenue-driven value (€m) Main Drivers

% of total

Productivity „ Commercial best practices and extension of

127 47% processes, mainly to the BPI network
alignment

Revenue 53%
synergies 146

„ Value chain „ Margins internalization on Corporate/Retail products

80 29%
optimization „ Cost of funding reduction

„ Extension of External Specialized Network (RES) on BPI

„ Network 35 13% „ Merger and development of international Private Banking
empowerment
structures

„ Cross- 31
„ Enabling Ducato consumer credit products on BPVN
11% network
fertilization

„ 53% of easily actionable value drivers

Total revenue-
273 100% „ 47% facilitated by BPI franchise quality and BPVN
driven value
proven track record

15
Value Creation Drivers
Opportunity to Fill the Productivity Gap (2006 Internal Benchmark excl. Consumer Credit¹)

High concentration areas²

Total revenues per
network employee (€k)

BPV
CB 265
Average Average (after LLP)³
BPN 197 24% Total revenues per Total revenues per
network employee (€k) network employee (€k)

BPI 213 BPV BPV

251 231
CB CB

BPN 201 22% BPN 189 21%

Low concentration areas
Total revenues per
BPI 206 BPI 191
network employee (€k)

BPV
223
CB

BPN 204 12%

BPI 200 Strong opportunity to realign productivity to

BPV-CB internal best practices based on
detailed branch analysis

(1) Based on detailed branch analysis; productivity calculated as network revenues/network employees
excluding Ducato and Linea. (2) High concentration: areas with distance between branches lower than 1
km. (3) Revenues after loan-loss provisions 16
Value Creation Drivers
Productivity Alignment Actions and Targets

Actions Impact (€m)

„ Extension of the BPVN’s commercial model in

terms of: Revenues (after loan-loss provisions, €m)¹
– Corporate Branches and Corporate Accounts 131 250
fully dedicated
– Private key accounts and support processes 48% of full
from Aletti potential
alignment
„ Adoption of BPVN’s distribution best practices
127 8
in terms of: 119
– Product range
– Control & monitoring processes
– Customer Relationship Management
procedures and IT architecture
– Planning processes, Budgeting techniques and Productivity BPVN BPI Buffer BPI Full
procedures alignment upside potential
– Sales forces incentives (Business 2010
plan) (alignment to Group
– Sales force training
best performance)2
„ Residual alignment of BPVN in core BPI areas
(€8m in 2010)

(1) Revenues, provisions and employees not including Head Office

(2) 100% alignment to BPV+CB revenues per employee (net of loans-loss provisions)
17
 Value Creation Drivers
Pro Capita Productivity Target on Commercial Banking Network¹

BPV+CB BPN BPI

Total revenues (after LLP)
€ 25k X 3,100 employees € 20k X 6,000 employees
per network employee (€k)
∼€ 78m ∼€ 119m
48 278 2 280
25 262 20 258
231 48 237 48 239

189 191

2 0 0 6 gr ow t h 2 0 10 p r o d a lig n 2 0 10 n g 2 0 0 6 gr ow t h 2 0 10 p r o d a lig n 2 0 10 n g 2 0 0 6 gr ow t h 2 0 10 p r o d a lig n 2 0 10 n g

2006 Baseline 2010 Producti- 2010 2006 Baseline 2010 Producti- 2010 2006 Baseline 2010 Producti- 2010
growth vity New growth vity New growth vity New
alignment Group alignment Group alignment Group
4.8% 5.8% 5.7%

5.0% 8.5% 7.9%

# Network
∼5,600 2.4% ∼6,200 ∼3,000 0.3% ∼3,100 ∼5,300 3.0% ∼6,000
employees

Total revenues 7.5% 8,8% 11,1%

(after LLP)

(1) Revenues, provisions and employees related to the commercial banking network
CAGR 2006-2010
18
Value Creation Drivers
Share of Wallet and Pricing Opportunities to Realign Productivity

BPI BPN
Revenues after
Revenues after
-34% 35% loan-loss
loan-loss
provisions
100% 24% provisions 100% 31%
-27% 13%
67%
61%

14% 16%

Business Inertial Pricing Mix Share Acquisition Business Inertial Pricing Mix Share Acquisition
Plan growth (1) of of new Plan growth (1) of of new
target Wallet customers target Wallet customers

Focus on mix and share of wallet

increase on current customer-base
(1) Customer assets growth CAGR. 2006-2010 3%
19
Value Creation Drivers
Productivity Alignment and Buffers in BPI and BPN Networks

BPI BPN

Revenues after Revenues after

loan-loss provisions loan-loss provisions
(€m) 1 (€m) 1

131 250

55 133
119
78
48%
58%

Business Upside Full potential Business Upside Full potential

Plan 2010 Plan 2010
target (alignment to Group target (alignment to Group
best performance)2 best performance)2

(1) Revenues, provisions and employees excluding Head Office

(2) 100% alignment to BPV+CB revenues per employee (net of loans-loss provisions)
20
Value Creation Drivers
Value Chain Optimization

Rationale Impact (€m)

„ Retail and Corporate products (Aletti) Aletti

- Revenue growth from structured 7 80
finance products due to the full 24
internalisation of the related
manufacturing process within Banca
Aletti
49

„ Brokerage and trading (Aletti)

- Internalisation of brokerage and
trading fees on BPI assets under
custody, currently paid to third party
brokerage houses

„ Cost of funding
Retail/Corporate Brokerage and Cost of funding Total synergies
- Reduction in BPI cost of funding in Products trading from value chain
EMTN/institutional markets (-15 bps) optimization

21
Value Creation Drivers
Network Empowerment

Rationale Impact (€m)

„ RES (External Specialized Network): extension

of the “specialist intermediaries” model to the BPI 2010 volumes = € 1.1 bn
from new mortgage loans
network in areas previously not covered, 10 35
especially in:
- Liguria
- Tuscany 25

- Abruzzo

„ PRIVATE: Merger of foreign Private Banking

structures allowing for:
- increased assets related to captive channel
- development of existing customer base
- acquisition of new customers
Extension of RES on BPI Merge of foreign Private Total synergies from
Banking structures network empowerment

22
Value Creation Drivers
Cross-fertilization on Consumer Credit Products – Ducato

Rationale Impact (€m)

70% penetration on
„ Volume alignment consumer credit loans (vs.
current 95% Ducato)
- Adoption of Ducato best practice on BPI
product range on personal loans From current
BPVN 417 bps 11 31
- Sharing of BPI highly effective sales to Ducato 450
€ 233 m of new
processes and methods on consumer credit consumer credit bps
loans
7
„ Pricing/risk metrics alignment
- Adoption of highly developed scoring and
14
risk assessment tools (based in Ducato)

„ Credit Protection Insurance penetration (CPI)

- Alignment to BPI best practice

Volumes Pricing Mix (CPI) Total synergies

from consumer
credit

23
Value Creation Drivers
Phasing

Expected Total Value Creation (€m)

Productivity alignment
500
Revenue synergies
413 127 25%
Cost synergies
102 25%

270 146 29%

114 27%
64 24%

74
27%

48% 227 45%

70 197
10 132 49%
20
40

2007E 2008E 2009E 2010E

Phasing 14% 54% 83% 100%

Conservative phasing, especially on the revenue side

24
Value Creation Drivers
Buffers not Included in the Business Plan

Buffers Rationale Impact (€m)

Upside from the full potential „ Up-side from the 52% of commercial network „ Up to 85
productivity alignment not-included in the
productivity alignment
Business Plan

„ Gain in concentration premium from branch re- „ Up to 70

Concentration premium branding in synergic areas where both Groups
stand-alone have a marginal market position

„ Synergies from consumer credit product „ Up to 40

Consumer Credit product factories:
factories - Linea/Delta (BPVN)
- Ducato (BPI)

„ The extension to the BPI distribution network of „ Up to 20

“+20” Project the “+20” Project increasing the operational
efficiency

„ Up to 215

25
III. Financials & Capital Management

26
Financials 2007-2010 – Banco Popolare Group
Banking Volume Targets

Group consolidated Commercial Banking Network

(avg., € bn) (avg., € bn)

CAGR 06-10 CAGR 06-10

8.7% 9.5%
+40%
400 359 400

Assets under 7.9%

68 management
300 300 +44%
257 253
Assets under 5.1% Assets under
72 custody 8.6%
50 53 management
200 200 176 Assets under
59 Direct customer 7.7% 45 custody 7.6%
106 38
funds
34 61 Direct customer 6.8%
100 78 100 funds
47
113 Customer loans 12.9% 93 Customer loans 13.0%
70 57
0 0
2006 2010 2006 2010
(pro-forma) (pro-forma)

27
Financials 2007-2010 – Banco Popolare Group
Profitability Targets

CAGR 9-months 06 2010

(06-10) (pro-forma)

• Total revenues + 10.7% • Cost/Income 57% 43%

– Net Financial Income1 + 10.8% • Cost/Income 59% 45%

(excl. Ducato and
– Other revenues + 10.7%
Efibanca)

• Operating Costs + 3.2% • EPS (€) 2.85

– Personnel Costs +3.8%

– Non Personnel Costs +2.1%

• Operating margin (pre-cost of risk) + 18.9%

• Loan loss provisions + 15.2%

• Recurrent net income + 20.0%

(1) Includes Net Interest Income, Dividends and similar Income

28
Financials 2007-2010 – Banco Popolare Group
Italian Commercial Banking Network1: Pricing & Profitability Targets
2006 2010 Delta
(pro-forma)

• Asset spread (Customer Loans) 2.25% 1.95% -0.30pp

Pricing
• Liability spread (Direct Customer Funds) 1.26% 1.49% +0.23pp

• TOTAL CUSTOMER SPREAD 3.51% 3.44% -0.07pp

• Euribor 1-month 2.94% 3.45% +0.51pp

• Revenues / employee (€ K) 223 2943 +7.2%

Profitability • Revenues after cost of credit / employee (€k) 207 269 +6.7%

– Customer loans + financial assets / employee (€ m) 12.6 16.6 +7.1%

- Customer loans + financial assets / customer2 (€k) 57 74 +7.0%

- # of customers / employee 222 223 +0.1%

– Customer loans & financial assets profitability 1.77% 1.78% +0.1pp

– # of employees 14.0 15.3 +2.2%

(commercial banking network) (K)

(1) Figures not including Head Office

(2) Customers with one or more products (CAGR 06-10: 2.3%)
(3) Inclusive of productivity alignment and other synergies on revenues
29
Financials 2007-2010 – Banco Popolare Group
Group Key Ratios
2006
(pro-forma)
2010

• Customer Loans / Direct Customer Funds 89% 107%

Banking
volume • Asset Under Mgmt / Indirect Customer Funds 46% 49%

• ROE (incl. IFRS 3)¹ 14,6%

Profitability
• ROE (excl. IFRS3)¹ 20.5%
• Net Financial Income2/ Total Revenues 55% 55%
• Cost / Income3 59% 45%
• Total Revenues/ Employee (€K) 195 288

• Tier 1 Capital Ratio 6.4%

Capital
adequacy • Total Capital Ratio 10.0%

• Net NPL ratio4 1.2% 0.8%

Asset
quality & • Loan Loss Provisions 0.42% 0.45%
Cost of risk
- Cost of Commercial Banking Loans 0.40% 0.42%
- Cost of Consumer Credit Loans5 1.39% 1.38%
(1) Calculated as year-end net income over average equity, excluding the income of the year. In order to adhere to the “Purchasing Method” (as of IFSR 3), balance sheet assets of Banco Popolare
include goodwill from the legal entity which, for financial reporting purposes, is identified as acquired entity (Banca Popolare Italiana). The equity of Banco Popolare is increased by an amount
equivalent to the one reported as goodwill on the asset side
(2) Includes Net Interest Income, Dividends and similar Income (3) Excl. Efibanca and Ducato (4) Ratio on average loans (5) Pre-capital management

30
Capital management
Overview

Capital
Share
strengthening ~ 3.3% ~ 9.7%
Buybacks
initiatives

• Sale of equity
~ 6.4%
stakes
~ 6.1% • Sale of real
Tier 1 Capital to Basle II
estate assets
Capital finance organic impact
• Issuance of
generated growth in RWAs
hybrid capital
from retained • Reduction of
earnings² RWAs

Tier 1 Tier 1 Tier 1

2006 PF 2010E PF 2010E PF
Basle I Payout Ratio on Recurrent Net Income: ~50% Basle I Basle II
Advanced¹

(1) Preliminary estimates, with BPVN using Basle II Advanced and with BPI using Basle I
(2) Retained earnings over the period 2007-2010 including synergies and restructuring costs

31
Capital adequacy outlook

2006 PF 2010E 2010E 2010E

Total capital ratio 9.0% 10.0% - -

Tier 1 6.1% 6.4% 7.8% 9.7%

Core Tier 1 5.4% 5.6% 6.9% 8.5%

Basle I framework Basle II Foundation Basle II Advanced

Preliminary estimates, Preliminary estimates,

with BPVN using Basle with BPVN using Basle
II Foundation* and with II Advanced and with
BPI using Basle I BPI using Basle I

32
IV. Management Team

33
Management Team

CEO: Fabio Innocenzi

Corporate General Manager: Massimo Minolfi Retail General Manager: Franco Baronio

• Human Resources: Giuseppe Apicella Guerra • Corporate: Andrea Santini

• Operations: Ottavio Rigodanza • Retail: Emanuele Giustini

• Group Finance: Maurizio Faroni • Corporate Centre: Marco Franceschini

• Group Credit: Giovanni Capitanio • Planning: Alberto Gasparri

• Legal & Corporate Affairs: Lucio Menestrina • Administration: Gianpietro Val

• RES (External Specialized Networks): Maurizio Di Maio • Group Audit: Giancarlo Castelli

• Communication & Corporate Identity: Marco Grassi

34
V. Timetable

35
Timetable overview
Milestones

‘06 2007
H1 2008
D J F M A M J J A S O N D

13
„ BoD Approval

15
„ Authorization from Bank of Italy

„ Roadshows

10
„ Approval of the merger project by the
Shareholders’ Meeting

„ Quick wins and activity plan set-up

„ Roll-out of detailed merger integration

plan
1
„ Merger

„ New IT procedures on BPI network

36
Group IT Migration
Migration Timing
13/12 March 07 01/07/07 Aug. 07 Oct. 07 15/12/07 Feb. 08

Shareholders
Board approval
approval

Migration
start up Solutions
Merger project realization
start up start up

Merger effective

Integration of client
credit risk database

Operational test
(40-70 branches)

BPL migration
conclusion

Other banks legacy

2007 Balance Sheets from systems migration
standardized platform
Other banks migration
(300 branches)

37
VI. Closing Remarks

38
Closing remarks

„ Superior objectives of returns compared to peers:

– Focus on core Retail and SME banking business

– Strong management resolve and confidence in business
plan delivery

„ New business plan will leverage on:

– Key success factors of the two Groups

– Proven track record
– Capital Management flexibility

„ Sustainable value creation based on strong recurrent financial

performance

39
Appendix

40
Appendix
Macro Economic Scenario - Deposit and Loan Growth Rate Forecasts

Italian banking system

Macro economic scenario
deposits and loans growth rate forecasts

CAGR
2006 2007 2008 2009
2006-2009

GDP Italy 1.70% 1.30% 1.40% 1.20% Customer funds +4.7%

GDP EU 2.50% 1.90% 2.10% 2.00% - Bond issued +7.7%

Inflation
2.20% 1.80% 2.00% 1.70% Total Customer loans +6.5%
(Italy)

1-Month - Medium-long term

2.90% 3.40% 3.33% 3.45% +7.0%
Euribor loans

- Consumer Credit +13.1%

- Retail mortgage loans +8.2%

Source: Prometeia forecasts (15 November 2006)

41
Appendix
Distribution Network Regional Competitive Position

National Distribution Network Ranking by Region¹

BPVN BPI Region Ranking Mkt Share

Lom bardy 542 3° 8.9%

Veneto 309 3° 9.2%

Tuscany 264 3° 11.3%

Em ilia
244 4° 7.3%
Rom agna

Piedm ont 236 3° 9.2%

Sicily 143 3° 8.2%

New Group – National Distribution Network
Liguria 130 3° 13.8%

Branch market Lazio 64 9° 2.5%

share
Cam pania 55 8° 3.5%
<1.0%

1.0%<=X<2.5% Abruzzo 45 6° 6.9%

2.5%<=X<7.5%
Trentino 21 6° 2.2%
7.5%<=X<15%

=> 15% Friuli 15 13° 1.6%

Source: Bank of Italy, June 2006

(1) Included regions with more than 10 branches 42
Appendix
Distribution Network Provincial Competitive Position

„ Perfect geographic fit with negligible overlap

„ Significant market share in key northern regions
Market share
„ Market share in excess of 8% in 24 provinces
Province BPVN BPI BP Rank

Bologna 1.5% 4.6% 6.1% 4°

Market share Market share Ferrara 0.5% 0.9% 1.4% 11°
Forli'-Cesena 0.6% 1.9% 2.5% 10°

Emilia-Romagna
Province BPVN BPI BP Rank Province BPVN BPI BP Rank
Modena 15.3% 1.5% 16.8% 3°
Alessandria 7.2% 1.4% 8.6% 5° Bergamo 13.5% 1.9% 15.4% 3° Parma 5.9% 1.5% 7.4% 3°
Asti 7.2% 0.6% 7.8% 4° Brescia 6.4% 3.0% 9.4% 3° Piacenza 0.9% 3.8% 4.7% 5°
Biella 10.9% - 10.9% 3° Como 2.6% 1.2% 3.8% 8° Ravenna 1.3% 2.8% 4.1% 8°
Piedmont

Cuneo 6.5% 0.2% 6.7% 4° Cremona 1.5% 23.3% 24.8% 1° Reggio Em. 13.3% 0.8% 14.1% 3°
Novara 26.6% - 26.6% 1° Lombardy Lecco 1.9% 1.9% 3.8% 7° Rimini - 1.4% 1.4% 15°
Turin 3.7% 0.7% 4.4% 5° Lodi - 19.1% 19.1% 2° Total 4.9% 2.4% 7.3% 4°
Verbano 26.8% - 26.8% 2° Mantova 6.3% 2.5% 8.8% 4°
Vercelli 21.6% - 21.6% 2° Milan 2.9% 2.9% 5.8% 5° 9°
Arezzo 0.9% 1.4% 2.3%
Total 8.7% 0.5% 9.2% 3° Pavia 8.8% 2.5% 11.3% 3° 4°
Florence 1.7% 4.3% 6.0%
Sondrio - 0.8% 0.8% 5° 3°
Grosseto 4.3% 3.5% 7.8%
Varese 3.7% 4.7% 8.1% 4° 2°
Belluno 2.1% 1.0% 3.1% 8° Livorno 2.1% 24.1% 26.2%
Total 4.9% 4.0% 8.9% 3°

Tuscany
Padova 3.8% 0.7% 4.5% 4° Lucca 2.8% 25.9% 28.7% 1°
Rovigo 1.1% 0.6% 1.7% 11° Massa C. 1.0% 9.6% 10.6% 4°
Veneto

Treviso 3.6% 0.8% 4.4% 6° Genoa 3.3% 12.1% 15.4% 3° Pisa 2.3% 16.5% 18.8% 2°
Venice 10.2% 0.6% 10.8% 3° Imperia 6.8% 1.7% 8.5% 3° Pistoia 3.3% 5.0% 8.3% 3°
Liguria

Verona 22.8% 0.3% 23.1% 2° La Spezia 3.7% 6.1% 9.8% 4° Prato 1.5% 4.5% 6.0% 6°
Vicenza 5.6% 0.6% 6.2% 5° Savona 8.9% 6.7% 15.6% 3° Siena - 1.5% 1.5% 12°
Total 8.6% 0.6% 9.2% 3° Total 4.9% 8.9% 13.8% 3° Total 1.9% 9.4% 11.3% 3°

Source: Bank of Italy, June 2006

43
Appendix
Governance Rules

Structure Key Principles

Supervisory Board „ AGMs in charge of approval of financial statements and

dividend policy
Chairman: Carlo Fratta Pasini
Deputy Vice-Chairman: Dino Piero Giarda „ Location of AGMs to rotate on an annual basis between
Second Vice-Chairman: Maurizio Comoli Verona and Lodi, whereas EGMs will be held in Verona
20 members drawn from BPVN and BPI Boards
„ Dual-Board structure composed of a Supervisory and
Management Board
Management Board
– Supervisory Board to be elected by the General
Shareholders’ Meeting, in charge of controlling,
Chairman: Divo Gronchi1 supervision and relevant extraordinary transactions
12 members of which 8 executives2
– Management Board, elected by the Supervisory
Board, in charge of business operations
CEO „ Integrated management team
Fabio Innocenzi
– BPVN CEO to become the new CEO of the Group
and to report to the Management Board

– BPVN and BPI current General Managers in charge

General Manager - Corporate General Manager - Retail of Corporate and Retail businesses, respectively
Massimo Minolfi Franco Baronio
„ Proven track-record in managing integration and
restructuring

(1) Subjected to the reapproval by the shareholders’ meeting scheduled on 20th January 2007
(2) In accordance with the Memorandum of Understanding signed on 1 Nov. 2006, the Management Board shall be composed of a minimum of 12 up to a maximum of 15 members, of
which at least two thirds chosen among managers of the new Group and at least one fourth among non-executive representatives.

44
Appendix
One-off Restructuring Costs

Restructuring costs (€m) Restructuring cost composition

Other
costs
300

28%

Personnel
60%
12%
IT

Restructuring costs

Restructuring costs to support economies of

scale and HR synergies

45
Appendix
Group Financials 3Q06: Income Statement

BPI Group BPVN Group

• Total revenues 1,137.6 1,984.9

• Net interest income¹ 620.0 990.0

• Other revenues² 517.5 994.9

• Operating Costs 766.0 1,078.4

• Personnel expenses 381.5 651.0

• Other Administrative Expenses 331.8 363.4
• Depreciation³ 52.8 63.9

• Operating margin (pre-cost of risk4) 371.6 906.6

• Operating margin (after cost of risk4) 279.5 815.7

• Net Income 150.6 569.1

Source: 3Q06 financial statement

(1) Includes the following items: 10, 20
(2) Includes the following items: 60, 70, 80, 90, 110, 150, 160, 220
(3) Includes the following items: 200, 210
(4) Includes the following item: 130a 46
Appendix
Group Financials 3Q06: Balance Sheet

BPI Group BPVN Group

• Total Assets / Liabilities 46,854.3 66,436.6

Balance Sheet
• Customer Loans 27,816.2 46,506.7

• Hedging Derivatives 95.1 36.0

• Shareholders’ Equity 4,070.2 4,379.0

Customer • Direct Customer Funds 32,311.3 41,599.2

Financial
• Indirect Customer Funds 31,709.1 75,341.7
Assets
- Assets Under Management 18,083.0 30,802.6

- Assets Under Custody 13,626.2 44,539.1

• Total Customer Funds 64,020.4 116,940.9

Source: 3Q06 financial statement

47
Investors and Analysts: Key Contacts

BPVN BPI

Tom Lucassen Office: +39 045 867 5537 Nicoletta Zangrandi Office: +39 0371 580.036
Head of Investor Relations e-mail: investor.relations@bpv.it Head of Investor Relations e-mail: investor.relations@bipielle.it

Elena Segura Office: +39 045 867 5484 Chiara Leoni Office: +39 0371 580 073
e-mail: investor.relations@bpv.it e-mail: investor.relations@bipielle.it

Vania Farinati Office: +39 045 867 5580 Elisa Mazzocco Office: +39 0371 580.681
e-mail: investor.relations@bpv.it e-mail: investor.relations@bipielle.it

Office: +39 045 867 5613 Fabio Pelati Office: +39 0371 580.105
Francesca Romagnoli
e-mail: investor.relations@bpv.it e-mail: investor.relations@bipielle.it

48