2002 Group Annual Report Eng2

Notes to the consolidated financial statements

5.4. – Distribution of subordinated assets (in thousands of euros)

a) b) c)

31-12-2002

31-12-2001 pro-forma

Changes

due from banks due from customers bonds and other debt securities

165,375

152,653

12,722

8.33%

Total

165,375

152,653

12,722

8.33%

The refund of the above securities and the payment of the relevant interest are subordinated to the payment of all other creditors with a higher claim. In addition to those shown in the chart, as of December 31st, 2002 and December 31st, 2001, the Group had posted under item “Other assets” subordinated assets – referring to a non-interest bearing loan to a subsidiary under liquidation – amounting to €15,494 thousand.

SECTION 6 - LIABILITIES 6.1 - Breakdown of item "Due to banks" (in thousands of euros)

a) b) c) d)

31-12-2002

31-12-2001 pro-forma

Changes

repurchase agreements securities lending due to central banks other - deposits - other

351,493 5,704,375 4,855,162 849,213

135,257 216,236 8,941,787 -3,237,412 7,369,351 -2,514,189 1,572,436 -723,223

159.87%

Total

6,055,868

9,077,044 -3,021,176

-33.28%

-36.21% -34.12% -45.99%

6.2 - Breakdown of item "Due to customers" 31-12-2001 pro-forma

(in thousands of euros)

31-12-2002

Changes

a) b) c)

repurchase agrrements securities lending other - checking accounts - other

3,455,063 17,980,296 15,792,874 2,187,422

4,477,289 -1,022,226 16,716,573 1,263,723 15,027,949 764,925 1,688,624 498,798

Total

21,435,359

21,193,862

241,497

-22.83% 7.56% 5.09% 29.54% 1.14%

125

Notes to the consolidated financial statements

SECTION 7 – PROVISIONS The following section reports on the provision for termination benefits, the provision for risks and charges and the loan loss provision.

7.1 – Annual changes in the "Provision for termination benefits" (in thousands of euros)

2002

2001 pro-forma

A.

Opening balance

314,007

347,645

B.

Increments B.1. allocations B.2. other changes

57,982 43,236 14,746

42,583 42,583 -

C.

Decrements C.1. drawdowns C.2. other changes

-40,777 -21,496 -19,281

-76,221 -66,794 -9,427

D.

Closing balance

331,212

314,007

7.2 – Provisions for risks and charges 7.2.1 – Sub-item 80 a) "allocation to retirement funds and similar obligations" (in thousands of euros)

2002

2001 pro-forma

A.

Opening balance

15,172

14,183

B.

Increments B.1. allocations B.2. other changes

185 185 -

2,370 2,370 -

C.

Decrements C.1. drawdowns C.2. other changes

-13,303 -10,258 -3,045

-1,381 -1,381 -

D.

Closing balance

2,054

15,172

Retirement funds reported in the consolidated financial statements of December 31st, 2002 amounted to €2,054 thousand, of which €1,821 thousand refer to the supplementary pension fund for the employees of the consolidated Banco S.Geminiano e S.Prospero. Among the decrement variations, there is a drawdown of €9,665 thousand carried out by the Parent company, referring to a bullet severance pay liquidated to the employees concerned, who accepted the Banco’s proposal in this sense. As a result of their assent to the proposal to be liquidated their termination bene-

126

Notes to the consolidated financial statements

fits with a one-time payment, as of December 31st, 2002 the number of retired employees and their heirs entitled to the benefits provided for went down to 52 units. The characteristics of the main external retirement funds and the ensuing commitments for the Group are described below. Pension fund for the employees of Banca Popolare di Verona – Banco S.Geminiano e S.Prospero The Company pension fund for employees of the Parent company has its own capital autonomy, and from a legal standpoint it is regarded as an unincorporated association (a de facto entity) governed by article 36 and following articles of the Civil Code. With reference to the above fund, the Parent company took on the following commitments: •

•

for the prevailing part, covered by a defined contribution scheme, the Parent company is committed to paying a yearly contribution equal to the amount agreed in contracts entered into with Trade Unions, aiming at guaranteeing to the entitled persons benefits in the form of annuity and/or lump sum. The contribution charged to income of 2002 totaled €13,061 thousand; only for employees entitled to defined benefits, namely two active employees and eighty-one retired employees at year-end, the Parent company is committed to guaranteeing the actual payment of the above benefits. The estimated liability the Parent company shall bear to cover the guarantee given, based upon the Fund’s latest statement and on the most recent actuarial evaluations, was allocated in other provisions for risks and charges.

7.2.2 – Sub-item 80 b) "tax provisions" (in thousands of euros)

2002

2001 pro-forma

A.

Opening balance

402,254

379,835

B.

Increments B.1. allocations B.2. other changes

361,430 360,603 827

331,233 329,519 1,714

C.

Decrements C.1. drawdowns C.2. other changes

-320,213 -316,946 -3,267

-308,814 -301,172 -7,642

D.

Closing balance

443,471

402,254

The tax provision as of December 31st, 2001 includes current liabilities for direct taxes, gross of advances paid and deferred tax liabilities due by the companies of the Group. It also includes outstanding liabilities to the Inland Revenue for indirect taxes for the year, such as stamp duties, transfer taxes and the so called “substitutive tax” (substitute for income taxes) set forth by D.P.R. 601/1973.

127

Notes to the consolidated financial statements

Deferred taxes Deferred taxes are computed along the "balance sheet liability method" dictated by IAS 12, in compliance with the specific instructions issued by the Bank of Italy. In particular, deferred tax assets and liabilities are calculated by applying the estimated tax rates to the nominal values of deductible and taxable temporary differences, that according to the tax regulations in force at the time of accounting shall be in effect when the above differences reverse themselves. The tax rates and the method of computing the I.R.PE.G. (corporate income) taxable base have been changed over the fiscal year, to factor in the novelties introduced by the relevant regulations, and to include intervening changes in the profitability outlook of the single companies of the Group.

DEFERRED TAX ASSETS The balances and changes intervened during the year in prepaid tax assets, whose offset account was posted to income, are shown in the following chart:

(in thousands of euros)

2002

2001 pro-forma

212,540

224,190

1.

Opening balance

2.

Increments 2.1. prepaid taxes generated during the year 2.2. other increments

57,464 36,492 20,972

37,448 20,129 17,319

3.

Decrements 3.1. prepaid taxes cancelled during the year 3.2. other decrements

-82,852 -69,090 -13,762

-49,098 -43,313 -5,785

4.

Closing balance

187,152

212,540

The main deductible temporary differences that on December 31st, 2002 contributed to the calculation of disposed assets are attributable to: allowances to the other provisions of item "provisions for risks and charges" that were not deducted in the fiscal year in which they were charged to income, because they did not fall under the provisions expressly defined under art. 73 of D.P.R. n. 917 of December 22nd, 1986, totaling €72,552 thousand; un-deducted loan write-downs charged to income in 1995 and previous fiscal years, deductible along the modalities set forth in art. 3, paragraph 107, of Act n. 549 of December 28th, 1995, totaling €66.961 thousand; loan write-downs that were not deducted in the fiscal year in which they were charged to income, because they exceeded the ceiling fixed under art. 71, paragraph 3, of D.P.R. n. 917 of December 22nd, 1986, totaling €13.791 thousand;

128

Notes to the consolidated financial statements

At the date of accounting, no prepaid tax assets were recorded, whose offset account was posted to equity. On December 31st, 2002, deductible temporary differences that as a precaution were not posted in the accounts of the subsidiaries, and as a consequence in the consolidated financial statement, totaled €2.976 thousand, and refer to allowances to the other provisions of item “provisions for risks and charges” that were not deducted in the fiscal year in which they were charged to income, because they did not fall under the provisions expressly defined under art. 73 of D.P.R. n. 917 of December 22nd, 1986. DEFERRED TAX LIABILITIES The balances and changes intervened during the fiscal year in deferred tax liabilities, whose offset account was posted to income, are shown in the following chart: (in thousands of euros)

1.

Opening balance

2.

Increments 2.1. deferred taxes generated during the year 2.2. other increments

3.

Decrements 3.1. deferred taxes cancelled during the year 3.2. other decrements

4.

Closing balance

2002

2001 pro-forma

73,751

55,798

2,614 2,262 352

31,466 29,669 1,797

-13,334 -13,318 -16

-13,513 -12,373 -1,140

63,031

73,751

The main deductible temporary differences that on December 31st, 2002 contributed to the calculation of deferred tax liabilities are attributable to: -

-

-

-

the exercise of the faculty to defer taxes on capital gains, as envisaged under art. 54, paragraph 4, of D.P.R. n. 917 of December 22nd, 1986, totaling €1,908 thousand; allowances to the loan loss reserves carried out in the financial statements of the companies of the Group exclusively to benefit from the fiscal advantage of immediate deductibility. Deferred taxes recognized in the consolidated accounts further to the elimination of the above allowances totaled €36.562 thousand; accelerated depreciation carried out in the financial statements of the companies of the Group exclusively to benefit from the fiscal advantage of immediate deductibility. Deferred taxes recognized in the consolidated accounts further to the elimination of the above accelerated depreciation totaled €5.110 thousand; greater values recognized to equity investments valued along the equity

129

Notes to the consolidated financial statements

method. Deferred taxes stated in the consolidated financial statements in the light of said values totaled €15.873 thousand. Upon drawing up the consolidated accounts, the possibility of offsetting prepaid tax assets with deferred tax liabilities was not taken advantage of, and therefore they have been fully recognized under items “Other assets” and “Tax provisions”. Tax credit from prepaid taxes is likely to be recovered, considering the sufficient taxable income generation capability demonstrated in past years by the companies of the Group, and substantiated by the projections developed in the relevant corporate business plans.

FISCAL POSITION OF THE COMPANIES OF THE GROUP As to the fiscal position of the companies of the Group, the following is worth mentioning:

Direct taxes With regard to the companies of the Group, with the exception of Leasimpresa that took part in the so called “condono tombale” (a sweeping tax pardon) for financial years from 1997 to 2001, at the date of accounting fiscal years 1997 and following are still open from a fiscal point of view, because the ordinary term for possible tax audits has not elapsed yet. In addition, fiscal years 1990, 1991 and 1992 are still open in that fiscal authorities are carrying out audits.

Indirect taxes Fiscal years from 1998 onwards are still open for the purpose of VAT, whilst with reference to stamp duties, the substitutive tax and transfer tax, fiscal years from 2000 on are still deemed open. Described below are the main tax disputes outstanding for the companies of the Group.

Parent company As a result of the merger, the ensuing Banco Popolare di Verona e Novara took over all rights and duties that previously belonged to the merged companies, including fiscal obligations.

130

Notes to the consolidated financial statements

Fiscal position of Banca Popolare di Verona – Banco S.Geminiano e S. Prospero Direct taxes As of December 31st, 2002 the following tax disputes were outstanding: Fiscal year 1990 – The original claim by the Inland Revenue Service amounted to €9.896 thousand, inclusive of penalties. The petition filed by the Parent company was fully agreed to by the Provincial Tax Commission. On April 14th, 2000, the Regional Tax Commission partially agreed to the appeal made by the Direct Tax Department, thus confirming the tax deficiency regarding a liability incurred to effect the merger recorded as goodwill. The Bank appealed against said decision to the Court of Cassation. The hearing took place on December 16th, 2002. At the date of accounting the outcome is not known yet. Fiscal years 1991 and 1992 – The original claim by the Inland Revenue Service amounted to €14,849 thousand, and €10,316 thousand, respectively, inclusive of penalties. The petitions filed by the Parent company were agreed to by the Provincial Tax Commission, that cancelled the deficiencies assessed. The Inland Revenue Service filed an appeal. The Parent company in turn filed an immediate counter-appeal to the Regional Tax Commission. In view of the favorable outcome of petitions filed up to now, it is likely that also the outstanding tax disputes shall be closed without giving rise to significant liabilities for the Parent company.

Fiscal position of the acquired Banco S.Geminiano e S.Prospero Direct taxes Fiscal years 1981, 1987, 1988 and 1992 are still open, in that they are being audited by the relevant tax authorities. As of December 31st, 2002, the following tax disputes were outstanding: -

-

Fiscal year 1981 – The original claims of the Inland Revenue Service amounted to €710 thousand, inclusive of penalties. The petitions filed by the Parent company were agreed to by the Appeal Tax commission, that cancelled all deficiencies assessed. The decision by the Central Tax Commission for the above fiscal years is still pending, further to the appeals filed by IRS. Fiscal year 1987 – The original claims of IRS amounted to €678 thousand, inclusive of penalties. The petitions filed by the Parent company have been agreed to by the Appeal Tax Commission, that cancelled almost all deficiencies assessed. In 2002, the Central Tax Commission confirmed the previous decisions, bringing the possible settlement charge down to €36 thousand .

131

Notes to the consolidated financial statements

-

-

Fiscal year 1988 – The original claims of IRS amounted to €202 thousand, inclusive of penalties. The petition filed by the Parent company was agreed to by the Regional Tax Commission for almost all deficiencies assessed. The definitive decision is still pending at the Supreme Court of Cassation, further to the appeal filed by the Tax Department. Fiscal year 1992 – The original claims of IRS amounted to €468 thousand, inclusive of penalties. The petition filed by the Parent company was fully agreed to by the Provincial Tax Commission, that cancelled the deficiencies. In 2002, the Bologna Regional Tax Commission confirmed the above decision.

Tax provisions are in any case deemed adequate to cover possible liabilities that might ensue from the settlement of all pending tax disputes.

Banca Popolare di Novara As of December 31st, 2002 there are no significant tax disputes pending.

Credito Bergamasco The tax dispute being assessed by the relevant Tax Commissions is finally being settled in favor of the Bank. The only fiscal year that is still open is 1987. Fiscal deficiencies assessed by the Tax authorities are part of a tax law interpretation contention that involves the whole banking industry, and that up to now was fully acknowledged by the various Commissions.

SA.RI. Sannitica Riscossioni A legal and administrative dispute is pending with the Fiscal Authorities due to the latter’s request to refund €8,484 thousand (plus penalties and interest due), that would have been unduly paid to some taxpayers as a result of tax refund applications, and the correlated legal action brought against SA.RI. and the tax authorities by Italfinanziaria S.p.A., a company sponsoring 20 taxpayers who were refunded tax credits for €4,851 thousand. The provision set aside to cover this potential liability amounts to €997 thousand, a sum the company deems adequate, in light of the fact that upon verification, the procedures followed to deal with the above transactions were considered correct.

Fiscal position of the other companies of the Group No significant tax disputes are pending. Tax provisions are in any case deemed adequate to cover possible liabilities that might ensue from the settlement of all outstanding tax disputes.

132

Notes to the consolidated financial statements

7.2.3 – Sub-item 80 d) "other provisions" Changes occurred during the year are detailed below: (in thousands of euros)

2002

2001 pro-forma

A.

Opening balance

167,710

168,137

B.

Increments B.1. allocations B.2. other changes

56,653 53,025 3,628

32,071 31,939 132

C.

Decrements C.1. drawdowns C.2. other changes

-19,489 -13,614 -5,875

-32,498 -26,384 -6,114

D.

Closing balance

204,874

167,710

Other provisions as of December 31st, 2002 include: -

-

estimate of expected losses from risks ensuing from bankruptcy proceedings against companies of the Group totaling €104,760 thousand; estimate of expected losses from guarantees issued, including unsecured guarantees to individuals residing in countries at risk, totaling €20,547 thousand; charity, amounting to €6,994 thousand; liabilities of various types, whose amount cannot be objectively defined, involving commitments taken, as well as the estimate of losses that could ensue from other pending or in any case foreseeable legal proceedings, in and out of court.

An update on the disputes pending between the Parent company and the National Social Security Agency I.N.P.S. is provided below.

Alleged failure to pay social security contributions on the share of profits destined to the company supplementary pension fund for employees before 1992, and on the value of shares gratuitously granted to employees on the 125th anniversary of the foundation of former Banca Popolare di Verona – Banco S.Geminiano e S.Prospero. On July 19th, 2000, the Cassation Court passed a ruling, agreeing to the petition filed by the former Banca Popolare di Verona – Banco S.Geminiano e S.Prospero as to the groundlessness of a contribution obligation due on shares that had been gratuitously granted to employees on the 125th anniversary, but at the same time it had accepted I.N.P.S.’s petition, thus voiding the appeal decision that considered the share of profits destined to

133

Notes to the consolidated financial statements

the Company Supplementary Pension fund as not subject to social security contributions. Even though the disputes could not be considered settled because of the further appeal to the Appellate Court of Vicenza, in 2001 the former Banca Popolare di Verona – Banco S.Geminiano e S.Prospero decided to write off the credit with I.N.P.S., made up of the total reprieve payments with reservation of repetition. On March 1st, 2002, the judgment pronounced by the Court of Vicenza, acting as an appellate Court, was passed. Since said decision give the Banco the right to claim back the reprieve payments already charged to income, the posting of the credit with I.N.P.S. has been reinstated, and a corresponding €12,974 thousand write-back was credited to income for the year. For the purpose of full disclosure, it should be noted that I.N.P.S. appealed to the Supreme Court of Cassation.

Alleged failure to pay social security contributions on the spread between the legal interest rate and the actual interest rate imposed on mortgages extended to employees. The petition filed by the Parent company against the audit report with which I.N.P.S. objected against the failure to pay social security contributions on the spread between the legal and the actual tax rate applied on mortgages extended to employees was rejected by I.N.P.S. on August 29th, 2000. I.N.P.S.’s claim totals €1,029 thousand. Since the claim is considered totally groundless, no provisions were set aside.

In compliance with the requirements raised by Consob in its letter dated February 15th, 2001, the required information on events affecting the whole banking industry is reported below.

Tax incentives envisaged under articles 22 and 23 of Law Decree n. 153 of May 17th, 1999. Unlike many other Italian lending institutions, both the former Banca Popolare di Verona – Banco S.Geminiano e S.Prospero, and the former Banca Popolare di Novara S.c.r.l. could never take advantage of the above tax incentives, because consolidation operations were carried out before the introduction of the relevant legal provision, the only exception being the non-structural consolidation operation with Banca Aletti, finalized during the year 2000 by the former Banca Popolare di Verona – Banco S.Geminiano e S.Prospero. With regard to the above transaction, during the year higher taxes were paid on the €368 thousand allocation to the “provision for banking restructuring under law n. 461 of December 23rd, 1998,” using the tax provisions as an offset

134

Notes to the consolidated financial statements

account. Considering the uncertainty as to whether the Bank could take advantage of the above incentive further to the preliminary exceptions raised by the European Commission, as a cautionary measure, the estimate of the 2000 taxes did not take into account the potential benefits deriving from the above incentives.

Provisions dictated by Act n. 133 of May 13th, 1999, and by the Budget Law for 2001 regarding real estate soft mortgages and provisions under Law Decree n. 394 of December 29th, 2000, regarding conventional fixed rate mortgages. Decision n. 29 of February 14-25th, 2002 passed by the Constitutional Court de facto determined that criminal and civil penalties against usury are applicable with regard to the time when the interest due was agreed upon and not to the time of interest payment. The same decision also determined that the replacement rate be applied to the installments falling due as of December 31st, 2000, when the L.D. n. 394/2000 took effect. The above decision bore no significant economic effects on Banca Popolare di Verona – Banco S.Geminiano e S.Prospero. As to Banca Popolare di Novara, the expected€5,371 thousand charge ensuing from the obligation to recalculate interest due had already been set aside on December 31st, 2001 in the provisions for risks and charges. Banco’s 2002 income was charged with further €621 thousand as a supplementary provision. Then, all the Italian branches of the former Banca Popolare di Novara s.c.r.l. were contributed to Banca Popolare di Novara S.p.A., together with the risk associated with the obligation to recalculate interests. Accordingly, the contributed business line included also the relevant portion of provisions for risks and charges destined to this end.

Ruling n. 425 of October 9th, 2000 with which the Constitutional Court declared article 25, third paragraph of Law Decree n. 342 of August 4th, 1999 void, with regards to the clauses referring to interest earned on interest accrued earlier (compound interest). The issue did not undergo significant changes over the year, since no legislative action was carried out. The Parent company was submitted out-of-court claims by customers, asking for the refunding of charges debited to them further to the application of the interest compounding method, while the feared increase in in-court litigations did not take place. The Parent company harmonized the frequency by which interest paid to clients are calculated and compounded to that of interest earned. In any case, it considers the procedures adopted in the past totally legitimate, and in line with the entire banking industry. Should the legal issue be settled to the detriment of the

135

Notes to the consolidated financial statements

banking industry, the possible charge that could be incurred by the Group may be covered by drawing from the allowance for general banking risks.

SECTION 8 – CAPITAL, RESERVES, ALLOWANCE FOR GENERAL BANKING RISKS AND SUBORDINATED LIABILITIES Shareholders’ equity (in thousands of euros)

31-12-2002 31-12-2001 pro-forma

100 120 130 150 160 170

changes

Allowance for general banking risks 58,265 58,265 Negative differences upon consolidation 6,703 Negative differences on equity method 33,673 34,128 Share capital 1,332,174 1,323,359 Share premiums 162,008 97,798 Reserves 1,185,739 1,065,246 a) legal reserve 259,331 231,699 b) reserve from own shares 51,646 c) statutory reserves 508,094 373,890 d) other reserves 418,314 408,011 180 Revaluation reserve 87,473 85,099 200 Net income for the year 429,213 317,610

-6,703 -100.00% -455 -1.33% 8,815 0.67% 64,210 65.66% 120,493 11.31% 27,632 11.93% -51,646 -100.00% 134,204 35.89% 10,303 2.52% 2,374 2.79% 111,603 35.14%

Total shareholders’ equity

300,337

3,288,545 2,988,208

10.05%

The reconciliation between the Parent company’s equity and the consolidated shareholders’ equity is shown in the “Group’s report on operations”. In the attachments a table is included showing changes intervened during the year.

Annual changes in item 100 "Allowance for general banking risks" (in thousands of euros)

136

2002

2001 pro-forma

A.

Opening balance

58,265

58,455

B.

Increments B.1. allocations B.2. other changes

-

-

C.

Decrements C.1. drawdowns C.2. other changes

-

-190 -190 -

D.

Closing balance

58,265

58,265

Notes to the consolidated financial statements

Negative consolidation differences (item 120 of liabilities) As of December 31st, 2002, there are no negative consolidation differences. The negative consolidation differences recognized in the pro-forma accounts of year-end 2001 amounted to €6,703 thousand. Before the offset against positive consolidation differences, they amounted to €8,171 thousand. In 2002, negative consolidation differences, gross of offsets, decreased by €1,060 thousand as a result of the disposal of the equity interest in Impresol. Net of offsets, the decrement amounted to €757 thousand. During the year, further offsets against positive consolidation differences were carried out, compared with the €5,946 thousand worth of offsets recognized in the pro-forma accounts as of December 31st, 2001. Had no offset been carried out during the current and past years, negative consolidation differences would amount to €7,111 thousand.

Negative differences on application of the equity method (item 130 of liabilities) As of December 31st, 2002, negative differences on application of the equity method stood at €33,673 thousand, and are mainly referred to Italease, Seefinanz (the subsidiary had been valued along the equity method by Banca Popolare di Novara s.c. a r.l. before liquidation), and Istituto Centrale delle Banche Popolari Italiane. Gross of offsets against positive differences on application of the equity method, they amounted to € 40,777 thousand. In 2002, negative differences on application of the equity method, gross of offsets, increased as a result of the €280 thousand capital increase carried out by Italease. During the year, further offsets against positive differences on application of the equity method were carried out, compared with the €735 thousand worth of offsets recognized in the pro-forma accounts as of December 31st, 2001. Had no offset been carried out in the current and past years, negative differences on application of the equity method would be €41,057 thousand.

Minority interest (item 140 of liabilities) As of December 31st, 2002, minority interest amounted to €147,436 thousand, compared with €180,188 thousand being the pro-forma figure for the previous year.

137

Notes to the consolidated financial statements

During the year, minority interest decreased by €32,752 thousand, mainly because of the increase of the equity interest held in Credito Bergamasco S.p.A. and the purchase of the remaining 50% equity interest in Aletti Invest Sim S.p.A.

Revaluation reserves (item 180 of liabilities) (in thousands of euros)

a) b) c) d) e)

ex lege n. 576, 2 December 1975 ex lege n. 72, 19 March 1983 ex lege n. 408, 29 December 1990 ex lege n. 413, 30 December 1991 ex lege 21 n. 342, November 2000

Total

31-12-02

31-12-01 pro-forma

changes

486 17,307 45,898 21,534 2,248

486 17,307 45,898 19,160 2,248

2,374 -

12.39% -

87,473

85,099

2,374

2.79%

Regulatory capital and capital requirements

A.

B.

C.

138

(in thousands of euros)

31-12-02

Regulatory capital A.1. tier 1 capital A.2. tier 2 capital A.3. deductibles A.4. regulatory capital

2,623,157 916,088 339,461 3,199,784

2,343,274 778,088 193,584 2,927,778

2,729,994 139,850

2,709,379 136,887

20,615 2,963

138,796 1,054 2,869,844

136,144 743 2,846,266

2,652 1.95% 311 41.86% 23,578 0.83%

Capital adequacy requirements B.1. credit risks B.2. market risks of which: - risks on trading portfolio - exchange rate risk B.3. other capital requirements B.4. total capitl requirements

31-12-01 pro-forma

Risk assets and capital ratios C.1. risk weighted assets 35,873,047 35,578,325 C.2. tier 1 capital/risk weighted assets 7.31% 6.59% C.3. regulatory capital/risk weighted assets 8.92% 8.23%

changes

279,883 11.94% 138,000 17.74% 145,877 75.36% 272,006 9.29%

294,722

0.76% 2.16%

0.83%

Notes to the consolidated financial statements

Positive consolidation differences (item 90 of assets) (in thousands of euros)

a) b) c) d) e)

31-12-2001 pro-forma

Increments Decrements

Writedowns

31-12-2002

Credito Bergamasco S.p.A. 307,414 Banca Aletti & C. S.p.A. 26,267 Aletti Invest Sim S.p.A. Sogepo SGR (ora Aletti Gestielle SGR) Aletti Fiduciaria S.p.A. -

16,504 28,721 7,257 585 26

-5,058 -585 -

-20,245 -6,242 -726 -26

303,673 43,688 6,531 -

Total

53,093

-5,643

-27,239

353,892

333,681

The net increase in positive consolidation differences, equal to €53,093 thousand, is due to the increase in the equity interest held in the following subsidiaries: Credito Bergamasco: the shareholding went from 76.752% on December 31st, 2001 to the current 81.252%; Banca Aletti: during the year the call option on 497,000 shares was exercised; Aletti Invest SIM: as explained in the report on operations, the remaining 50% equity interest in Società Cattolica di Assicurazione was acquired. To be noted, that during the year, €5,946 thousand worth of positive consolidation differences were set off against an equal amount of negative consolidation differences. Positive differences on application of the equity method (item 100 of assets) (in thousands of euros)

31-12-2001 pro-forma

a) GEMA Magazzini Generali Banca Popolare di Verona - Banco S. Geminiano e S. Prospero S.p.A. b) Arena Broker S.r.l. c) Assisebino S.r.l. Total

Increments Decrements

Writedowns

31-12-2002

378 29 328

-

-378 -29 -328

-

-

735

-

-735

-

-

During the year, positive differences on application of the equity method have been set off against an equal amount of negative differences on application of the equity method.

Composition of item 110 of liabilities "Subordinated liabilities” Subordinated liabilities are comprised by the following debenture stock issued by the Parent company: •

bearer bonds for €125,000 thousand issued at par on March 30th, 2001. Bonds shall be repaid with a bullet payment on January 15th, 2007. The

139

Notes to the consolidated financial statements

floating interest rate can be adjusted every three months along the three month Eurolira Libor rate. Subordination requires, in the event of liquidation of the Bank, that bonds be repaid only after all other debts with a higher claim have been satisfied;

140

•

convertible subordinated bond issue reserved preemptively to shareholders. Bonds issued at par on July 12th, 1999 amounted to a face value of €244,504 thousand. The debt shall be repaid with a bullet payment on December 31st, 2005, unless the conversion option has already been exercised. As of January 1st, 2000, bonds can be converted into shares at any time, on a one to one ratio. The interest rate is fixed throughout the duration of the borrowing, and is equal to a gross annual 2.125% rate. The Bank reserved the option to exercise an early redemption after five years from the issue date, provided that the official price quoted on the MTA (electronic equity market) of Borsa Italiana of the conversion Shares undergoes a variation of 130% or greater than the bond’s face value, that the Bank of Italy grants the relevant authorization, and with at least a one month notice. Subordination requires, in case of voluntary or involuntary bankruptcy, that bondholders be repaid only after all other debts with a higher claim have been satisfied;

•

€258,228 thousand bearer bonds issued at par on April 10th, 1997. The debt shall be repaid with a bullet payment on April 10th, 2004. The interest rate can be adjusted every three months along the three month Eurolira Libor rate. The Bank reserved the option to exercise an early redemption, with prior authorization by the Bank of Italy. Subordination requires, in the event of liquidation of the Bank, that bonds be repaid only after all other debts with a higher claim have been satisfied;

•

bonds for €150,000 thousand issued at par on June 1st, 1999. Bonds shall be repaid in five annual proportional shares equal to 20% of the debenture stock each. Subordination requires, in the event of liquidation of the Bank, that bonds be repaid only after all other debts with a higher claim have been satisfied;

•

convertible bonds for Lire 339,099 million issued at par on November 29th, 1999 and represented by bearer bonds. It shall be fully repaid by January 1st, 2006;

•

bonds totaling €50,000 thousand issued at par on December 20th, 2001. Bonds shall be repaid in five proportional annual shares equal to 20% of the debenture stock each. Subordination requires, in the event of liquidation of the Bank, that bonds be repaid only after all other debts with a higher claim have been satisfied;

•

bonds for €150,000 thousand issued at par on January 15th, 2002. Bonds shall be repaid with a bullet payment on April 15th, 2012, unless after 63 months from the issue the Bank reserves the early redemption

Notes to the consolidated financial statements

option. Subordination requires, in the event of liquidation of the Bank, that bonds be repaid only after all other debts with a higher claim have been satisfied; •

bonds for €100,000 thousand issued at par on May 9th. 2002. Bonds shall be repaid in five proportional annual shares equal to 20% of the debenture stock each. Subordination requires, in the event of liquidation of the Bank, that bonds be repaid only after all other debts with a higher claim have been satisfied;

•

bonds for €50,000 thousand issued at par on June 20th, 2002. Bonds shall be repaid in five proportional annual shares. The issuer has the right to exercise an early redemption at par as of the 24th month following the issue date. Subordination requires, in the event of liquidation of the Bank, that bonds be repaid only after all other debts with a higher claim have been satisfied.

The above amounts include interest rates incrementing the value of securities. In addition, bonds for €90,569 thousand were issued at par in May 2002 by the Parent company and contributed to Banca Popolare di Novara S.p.A.. Bonds shall be repaid in five proportional annual shares equal to 20% of the debenture stock each. Subordination requires, in the event of liquidation of the Bank, that bonds be repaid only after all other debts with a higher claim have been satisfied. The issuer has the right to exercise an early redemption, with prior authorization by the Bank of Italy, and to purchase its own bonds on the market.

SECTION 9 – OTHER LIABILITIES 9.1 - Composition of item 50 "Other liabilities" (in thousands of euros)

a) due to suppliers b) pending items c) items between branches not assigned yet to the relevant accounts d) sums available due to third parties e) bank transfers to be cleared electronically f) other Total

31-12-2002 31-12-2001 pro-forma

changes

257,540 135,092

220,320 256,099

37,220 -121,007

16.89% -47.25%

120,735 85,742

199,948 241,004

-79,213 -155,262

-39.62% -64.42%

197,515 1,382,329

187,770 965,060

9,745 417,279

5.19% 43.24%

2,178,953

2,070,201

108,752

5.25%

141

Notes to the consolidated financial statements

9.2 - Composition of item 60 "Accrued expenses and deferred income" (in thousands of euros)

31-12-2002 31-12-2001 pro-forma

a) accrued expenses 292,101 1. interest accrued on derivative contracts 145,485 2. interest on interbank transactions 22,344 3. interest accrued on repurchase agreements issued 14,038 4. other 110,234 b) deferred income 1. non accrued interest on derivative contracts 2. finance lease payments 3. other Totali

changes

380,624

-88,523

-23.26%

112,912

32,573

28.85%

55,538

-33,194

-59.77%

16,361 195,813

-2,323 -85,579

-14.20% -43.70%

75,120

70,833

4,287

6.05%

13,365 38,759 22,996

12,423 29,913 28,497

942 8,846 -5,501

7.58% 29.57% -19.30%

367,221

451,457

-84,236

-18.66%

9.3 – Adjustments for accrued expenses and deferred income Adjustments for accrued expenses and deferred income directly recognized on the relevant balance sheet items are summarized below:

(in thousands of euros)

a) liabilities - due to banks - due to customers - debt securities in issue - on subordinated liabilities b) assets - due from banks - due from customers - bonds and other debt securities

142

31-12-2002 31-12-2001 pro-forma

changes

102,236 90,126 12,110

84,016 74,213 9,803

18,220 15,913 2,307

21.69%

6,435 785 5,650 -

9,333 84 9,249 -

-2,898 701 -3,599

-31.05% 834.52% -38.91%

21.44% 23.53%

Notes to the consolidated financial statements

SECTION 10 – GUARANTEES AND COMMITMENTS

10.1 - Composition of item 10 "Guarantees issued" Guarantees issued by the Group are shown below: (in thousands of euros)

a) commercial lines of credit b) financial lines of credit c) assets pledged as security Total

31-12-2002 31-12-2001 pro-forma

changes

2,858,751 2,584,999 910,274 871,318 6,699 12,380

273,752 38,956 -5,681

10.59% 4.47% -45.89%

3,775,724 3,468,697

307,027

8.85%

10.2 - Composition of item 20 "Commitments" (in thousands of euros)

a) commitments certain tro be called on - still unsettled securities purchases - deposits and financings to be extended - default swap credits - other

31-12-2002

changes

1,380,008 290,295

1,232,903 147,105 11.93% 370,827 -80,532 -21.72%

629,084 159,734 300,895

603,032 26,052 4.32% 154,052 5,682 3.69% 104,992 195,903 186.59%

b) commitments not certain to be called on 1,684,337 - undrawn margins on extended credit lines 1,170,986 - commitments towards the Interbank Deposit Protection Fund 38,444 - other 474,907 Total

31-12-2001 pro-forma

3,064,345

1,609,292

75,045

4.66%

1,284,522 -113,536

-8.84%

39,047 -603 285,723 189,184

-1.54% 66.21%

2,842,195 222,150

7.82%

143

Notes to the consolidated financial statements

10.3 – Assets pledged as security to debts (in thousands of euros)

a) securities - referring to reverse repurchase agreements - as a security to advances from the Bank of Italy - as a surety for the issue of circular checks - as a security for other transactions

31-12-2002 31-12-2001 pro-forma

changes

1,165,839

2,702,297

-1,536,458 -56.86%

948,812

2,474,258

-1,525,446 -61.65%

108,043

117,548

-9,505

-8.09%

88,602 20,382

88,176 22,315

426 -1,933

0.48% -8.66%

b) other

125

128

-3

-2,34%

Total

1,165,964

2,702,425

-1,536,461 -56.85%

10.4 – Undrawn margins on lines of credit

(in thousands of euros)

a) central banks b) other banks

Total

144

31-12-2002 31-12-2001 pro-forma

changes

114,678 1,044,887

119,527 1,088,199

-4,849 -43,312

-4.06% -3.98%

1,159,565

1,207,726

-48,161

-3.99%

Notes to the consolidated financial statements

10.5 – Forward transactions 31-12-2002 (in thousands of euros)

1. Purchase and sale 1.1. securities - purchase - sale 1.2. currencies - currencies against currencies - purchase against euro - sale against euro 2. Deposits and financing - to be extended - to be received 3. Derivative contracts: 3.1. with exchange of capital: a) securities: - purchase - sale b) currencies: - currencies against currencies - purchase against euro - sale against euro c) other: - purchase - sale

hedging

Classes of transactions trading

other

1,719,927

4,706,023

-

1,879 987 892

550,673 287,957 262,716

-

1,718,048

4,155,350

-

194,334 1,085,418 438,296

139,669 2,420,756 1,594,925

-

-

105,237 116,892 -11,655

1,446,434 211,377 1,235,057

12,696,668

23,697,362

1,429,143

652,159 652,159

2,644,773 172,926 172,922 4 2,390,949

105,583 105,583 105,583 -

7,509 642,094 2,556 -

20,040 1,122,516 1,248,393 80,898 80,898 -

-

3.2. without exchange of capital: 12,044,509 a) currencies: - currencies against currencies - purchase against euro - sale against euro b) other: 12,044,509 - purchase 8,003,528 - sale 4,040,981

21,052,589 -

1,323,560 -

21,052,589 9,525,232 11,527,357

1,323,560 110,663 1,212,897

Total

28,508,622

2,875,577

14,416,595

145

Notes to the consolidated financial statements

31-12-2001 pro-forma (in thousands of euros)

1. Purchases and sales

other

3,825,305

1,768,779

-

7,524 560 6,964

489,216 320,753 168,463

-

3,817,781 842,560 1,519,760 1,455,461

1,279,563 97,217 921,665 260,681

-

-

50,000 50,000

1,303,218 683,318 619,900

13,653,187

8,754,079

1,163,977

914,115 143,868 87,058 56,810 770,247 8,671 758,481 3,095 -

813,024 254,793 130,180 124,613 558,231 9,418 272,632 276,181 -

30,248 30,248 30,248 -

3.2. without exchange of capital: 12,739,072 a) currencies: - currencies against - purchase against euro - sale against euro b) other: 12,739,072 - purchase 9,142,433 - sale 3,596,639

7,941,055 7,941,055 3,651,151 4,289,904

1,133,729 1,133,729 1,133,729

10,572,858

2,467,195

1.1. securities - purchase - sale 1.2. currencies - currencies against - purchase against euro - sale against euro 2. Deposits and financing - to be extended - to be extended 3. Derivative contracts: 3.1. with exchange of capital: a) securities: - purchase - sale b) currencies: - currencies against - purchase against euro - sale against euro c) other: - purchase - sale

Total

146

Classes of transactions hedging trading

17,478,492

Notes to the consolidated financial statements

Internal deals The chart below shows the notional value of derivative contracts that were the object of internal deals, broken down in purchase and sale by contract. 31-12-2002 (in thousands of euros)

a) Interest rate derivatives - purchase - sale

Classes of transactions hedging trading

3,740,140 1,181,372 2,558,768

12,682,786 7,030,091 5,652,695

-

2,554,044 1,277,022 1,277,022

193,241 190,297 2,944

687,455 250,051 437,404

3,933,381

15,924,285

b) Exchange rate derivatives - purchase - sale c) Derivatives on securities and indices - purchase - sale Total

The mark to market of internal deal contracts entered into with Banca Aletti by the other Companies of the Group to hedge assets/liabilities valued at cost shows a total €9,680 thousand capital loss – that did not emerge when applying the principle of the evaluation consistency.

10.6 – Credit derivatives 31-12-2002 (in thousands of euros)

1. Protective purchase 1.1 with exchange of capital - Credit default swaps - Credit default options 1.2 without exchange of capital - Credit default swaps - Credit linked notes - other 2. Protective sale 2.1 with exchange of capital - Credit default swaps - Credit default options 2.2 without exchange of capital - Credit default swaps - Credit linked notes - other

Classes of transactions trading other trans.

1,068 1,068 1,068 -

71,068 70,000 70,000 1,068 1,068 159,734 110,000 110,000 49,734 49,734 -

147

Notes to the consolidated financial statements

SECTION 11 - CONCENTRATION AND DISTRIBUTION OF ASSETS AND LIABILITIES

11.1 – Major risks (in thousands of euros)

a) total b) number

31-12-2002 31-12-2001 pro-forma

1,809,955 4

2,245,972 10

Changes

-436,017 -19.41% -6 -60.00%

11.2.- Distribution of customer loans by main classes of borrowers The following chart shows loans subdivided by classes of borrowers:

a) b) c) d) e) f)

(in thousands of euros)

31-12-2002 31-12-2001 pro-forma

Governments other public agencies non-financial businesses financial businesses family businesses other operators

6,191 8,555 182,254 248,452 20,745,530 21,109,479 3,696,663 3,344,377 1,843,000 1,964,779 5,475,606 4,579,139

Total

31,949,244 31,254,781

Changes

-2,364 -27.63% -66,198 -26.64% -363,949 -1.72% 352,286 10.53% -121,779 -6.20% 896,467 19.58% 694,463

2.22%

11.3 – Distribution of loans to non-financial companies and resident family businesses (in thousands of euros)

a) b) c) d)

other marketable services commerce, salvage and repairs construction and public works textiles, leather, footwear and clothing e) metal products, excluding machines and vehicles f) other branks Total

148

31-12-2002 31-12-2001 pro-forma

Changes

3,469,565 3,844,636 2,053,510

3,015,944 4,069,410 1,947,774

453,621 -224,774 105,736

15.4% -5.52% 5.43%

1,276,818

1,350,804

-73,986

-5.48%

1,197,516 9,814,575

1,362,082 10,353,340

-164,566 -538,765

-12.08% -5.20%

21,656,620 22,099,354

-442,734

-2.00%

Notes to the consolidated financial statements

11.4 – Distribution of guarantees issued by main counterpart classes

(in thousands of euros)

a) b) c) d) e) f) g)

31-12-2002 31-12-2001 pro-forma

Changes

Governments other public bodies banks non-financial businesses financial businesses family businesses other operators

13,104 10,811 251,926 251,879 2,928,973 2,658,469 324,356 277,326 79,857 85,596 177,508 184,616

2,293 47 270,504 47,030 -5,739 -7,108

21.21% 0.02% 10.18% 16.96% -6.70% -3.85%

Total

3,775,724 3,468,697

307,027

8.85%

11.5 – Geographical distribution of assets and liabilities The geographical distribution of relations based upon the counterparts’ residence is summarized below: 31-12-2002 (in thousands of euros)

Italy Other U.E. Countries

Other Countries

Total

1. Assets 1.1. due from banks 1.2. due from customers 1.3. securities

38,712,179 3,353,691 4,434,857 1,440,110 30,671,886 1,070,395 3,605,436 843,186

943,849 188,217 206,963 548,669

43,009,719 6,063,184 31,949,244 4,997,291

2. Liabilities 2.1. due to banks 2.2. due to customers 2.3. debt securities in issue 2.4. other

34,963,981 3,476,228 19,976,858 10,411,732 1,099,163

4,867,858 1,451,885 1,360,264 1,219,376 1,244,671 213,830 2,262,923 18,679 -

41,283,724 6,055,868 21,435,359 12,693,334 1,099,163

3. Guarantees and commitments

31-12-2001 pro-forma (in thousands of euros)

6,210,009

536,131

93,929

6,840,069

Italy Other U.E. Countries

Other Countries

Total

1. Assets 1.1. due from banks 1.2. due from customers 1.3. securities

39,006,335 5,222,275 29,772,614 4,011,446

5,106,635 1,347,008 2,962,842 414,034 1,111,609 370,558 1,032,184 562,416

45,459,978 8,599,151 31,254,781 5,606,046

2. Liabilities 2.1. due to banks 2.2. due to customers 2.3. debt securities in issue 2.4. other

34,941,329 6,891,571 2,381,912 3,578,933 3,300,141 2,197,970 20,362,920 684,031 146,911 10,034,759 2,907,399 37,031 964,717 -

44,214,812 9,077,044 21,193,862 12,979,189 964,717

3. Guarantees and commitments

5,097,718 1,051,654

161,520

6,310,892

149

Notes to the consolidated financial statements

11.6 – Time distribution of assets and liabilities specified duration 31-12-2002 (in thousands of euros)

on demand

beyond 3 months up to up to 3 months 12 months

beyond 1 year up to 5 years

fixed r.

indexed r.

unspebeyond 5 years cified fixed indexed duration rate rate

1. Assets 15,207,984 23,183,574 10,825,628 17,040,186 1.1 Treasury bills eligible for refinancing 30,619 216,091 230,885 66,631 1.2 Due from banks 744,208 3,675,107 1,208,296 74,880 1.3 Due from customers 13,015,114 4,868,258 2,549,544 1,542,374 1.4 Bonds and other debt securities 9,656 447,584 637,463 333,003 1.5 Off-balance sheet transactions 1,408,387 13,976,534 6,199,440 15,023,298

8,757,630

3,695,147

4,117,257 1,574,873

362,236 17,676 5,065,779 1,111,979 2,199,960

41,179 2,437 729,359 203,112 2,719,060

219,242 - 340,580 3,027,065 1,151,751 807,942 82,517 63,008 25

2. Liabilities 19,470,790 27,145,666 11,907,841 16,203,144 2.1 Due to banks 2,098,882 3,096,075 465,641 66,321 2.2 Due to customers 16,478,236 4,694,353 205,249 170 2.3 Debt securities in issue: 271,959 2,311,156 2,602,654 4,304,845 - bonds 319 531,378 1,845,638 4,219,571 - certificates of deposit 100,561 1,779,778 757,016 85,274 - other securities 171,079 2.4 Subordinated liabilities 3,373 26,852 265,381 2.5 Off-balance sheet transactions 621,713 17,040,709 8,607,445 11,566,427

5,166,375 223,216 41 2,432,140 2,414,530 17,610 470,683 2,040,295

2,692,989 14,300 203,632 203,632 2,475,057

752,280 67,610 560,559 560,559 93,306 30,805

312,514 23,823 57,310 6,389 6,389 224,967 25

specified duration 31-12-2001 pro-forma (in thousands of euros)

on demand

beyond beyond 1 year 3 months up to up to 5 years up to 3 months indexed r. 12 months fixed r.

specified beyond 5 years duration fixed indexed rate rate

1. Assets 15,679,247 16,004,221 11,006,554 1.1 Treasury bills eligible for refinancing 2,937 51,015 654,437 1.2 Due from banks 1,220,647 5,466,048 1,434,996 1.3 Due from customers 13,561,340 4,097,573 2,485,293 1.4 Bonds and other debt securities 33,158 247,632 452,982 1.5 Off-balance sheet transactions 861,165 6,141,953 5,978,846

6,244,583

8,059,347

2,303,757

3,722,632 1,575,593

103,084 9,397 1,844,404 307,928 3,979,770

875,721 100,693 4,708,960 1,198,269 1,175,704

345,115 791,842 163,504 1,003,296

254,339 - 367,370 2,557,173 1,208,196 826,132 84,988 27

2. Liabilities 17,717,120 21,032,367 11,868,520 2.1 Due to banks 1,085,473 5,381,831 2,208,550 2.2 Due to customers 15,964,671 4,776,056 418,107 2.3 Debt securities in issue: 297,919 2,179,065 2,031,049 - bonds 2,912 315,864 1,153,764 - certificates of deposit 67,336 1,857,068 851,697 - other securities 227,671 6,133 25,588 2.4 Subordinated liabilities 130,535 3,199 35,184 2.5 Off-balance sheet transactions 238,522 8,692,216 7,175,630

6,310,479 83,887 732 4,433,761 4,329,380 104,381 351,735 1,440,364

4,340,412 225,976 174 3,020,654 3,002,219 18,435 258,228 835,380

1,197,245 18,491 334,228 334,228 50,000 794,526

150

776,490 57,613 572,210 572,210 125,000 21,667

159,675 15,223 34,122 110,303 3,053 107,250 27

Notes to the consolidated financial statements

11.7 – Assets and liabilities in foreign currency Assets and liabilities include the following components in foreign currency:

(in thousands of euros)

31-12-2002

31-12-2001 pro-forma

a) assets 1. due from banks 2. due from customers 3. securities 4. equity investments 5. other

2,070,595 886,465 1,019,295 155,327 9,508

4,663,220 -2,592,625 -55.60% 2,801,685 -1,915,220 -68.36% 1,591,531 -572,236 -35.96% 252,682 -97,355 -38.53% 17,322 -7,814 -45.11%

b) liabilities 1. due to banks 2. due to customers 3. debt securities in issue 4. other

3,406,689 1,378,922 400,620 1,627,147 -

5,663,754 -2,257,065 -39.85% 3,396,232 -2,017,310 -59.40% 342,223 58,397 17.06% 1,925,299 -298,152 -15.49% -

Changes

11.8 – Securitization transactions Securities from securitization transactions, that on December 31st, 2002 were registered in the securities portfolio of the Group companies, amounted to €197,236 thousand. 31-12-2002 (in thousands of euros)

Senior

Mezzanine

Junior

Total

Investment securities Trading securities

162,349

30,972

3,915 -

3,915 193,321

Total

162,349

30,972

3,915

197,236

The breakdown of securitized securities by type of underlying asset as of December 31st, 2002 is as follows: mortgages and finance operations for €102,719 thousand; securities for €33,629 thousand; loans from lease contracts for €16,690 thousand; games and gambling for €10,505 thousand; other assets for €33,693 thousand. Securities from securitization transactions associated with proprietary underlying assets amounted to €3,915 thousand, and refer to performing loans; securities associated with third party underlying assets amounted to €193,321 thousand and break down as follows:

151

Notes to the consolidated financial statements

31-12-2002 (in thousands of euros)

Senior

Mezzanine

Junior

Total

NPLs Watchlist loans Other assets

4,499 157,850

30,972

-

4,499 188,822

Total

162,349

30,972

-

193,321

Write-downs and write-backs carried out during the year on securities from securitization transactions included in the securities portfolio break down as follows: 31-12-2002 (in thousands of euros)

Senior

Mezzanine

Junior

Total

Write-downs Write-backs

-59 12

-38 -

-

-97 12

Total

-47

-38

-

-85

The geographical distribution of borrowers is as follows: 31-12-2002 (in thousands of euros)

Italy

Other U.E. Other Countries Countries

Total

Securities in portfolio (book value)

121,909

65,827

9,500

197,236

Total

121,909

65,827

9,500

197,236

Total asset-backed securities from securitization transactions amounted to €14,000 thousand. The Group has no sharing in SPVs. The Parent company has the right to exercise a call option to buy the interest representing the entire share capital of BPV Mortgages from the foreign foundations that at present hold the stakes, at a total price of €10,000 thousand. The option may be exercised only on 60% of BPV Mortgages’ share capital until Class A1, A2 and B notes are fully repaid. After that date, the option may be exercised also on the remaining 40% share capital. During the year, the Group collected loans on behalf of the special purpose vehicle BPV Mortgages for €94,036 thousand, and on behalf of the special purpose vehicle Leasimpresa Finance for €272,415 thousand.

152

Notes to the consolidated financial statements

SECTION 12 – THIRD PARTY MANAGEMENT AND INTERMEDIATION

12.1 – Securities trading (in thousands of euros)

31-12-2002

31-12-2001 pro-forma

Changes

a) purchase 1. settled 2. imsettled

10,624,862 11,587,766 10,399,692 11,302,939 225,170 284,827

-962,904 -903,247 -59,657

-8.31% -7.99% -20.94%

b) sale 1. settled 2. unsettled

9,273,964 11,837,065 9,049,877 11,559,919 224,087 277,146

-2,563,101 -2,510,042 -53,059

-21.65% -21.71% -19.14%

12.2 – Assets under management (in thousands of euros)

Assets under management (market value)

31-12-2002

31-12-2001 pro-forma

15,385,820 14,786,717

Changes

599,103

4.05%

During the year, the banks of the Group started selling “guaranteed asset management products”. At year-end, they were represented by two types of products (Investisereno and Temposicuro) and amounted to €242,315 thousand.

12.3 – Securities under custody The chart below shows securities under custody and administration (recognized at their nominal value):

(in thousands of euros)

31-12-2002

31-12-2001 pro-forma

a) third party securities under custody b) third party securities held by third parties c) own securities held by third parties

58,313,511

47,950,474

10,363,037

21.61%

48,624,543 5,123,886

41,168,990 6,587,344

7,455,553 -1,463,458

18.11% -22.22%

Changes

153

Notes to the consolidated financial statements

12.4 – Collection of loans on behalf of third parties: debit and credit adjustments

(in migliaia di euro)

31-12-2002

31-12-2001 pro-forma

a) “debt” adjustments 1. checking accounts 2. central portfolio 3. cash 4. other

12,050,774 74,642 9,909,840 496,116 1,570,176

11,260,860 89,584 9,248,266 533,751 1,389,259

789,914 -14,942 661,574 -37,635 180,917

7.01% -16.68% 7.15%

b) “credit” adjustments 1. checking accounts 2. lender bills and documents 3. other

12,215,408 1,567,721

11,337,361 1,629,033

878,047 -61,312

7.74% -3.76%

10,096,093 551,594

9,134,437 573,891

961,656 -22,297

10.53%

Changes

13.02%

12.5 – Other transactions As of December 31st, 2002, no other material transactions were carried out that were not included in the above items.

154

Notes to the consolidated financial statements

Chapter C – Notes to the consolidated income statement SECTION 1 - INTEREST 1.1 - Composition of item 10 "Interest income and similar revenues" Interest income and similar revenues break down as follows: (in thousands of euros)

2002

2001 pro-forma

a) on due from banks of which: - from central banks b) on due from customers of which: - with third party assets under administration c) on debt securities d) other e) positive spread on heading transactions

288,676

386,465

-97,789

-25.30%

13,254 1,795,686

17,377 2,011,535

-4,123 -215,849

-23.73% -10.73%

159 221,833 5,241

104 289,063 2,685

55 -67,230 2,556

52,88% -23.26% 95.20%

34,047

9,488

24,559

258.84%

2,345,483

2,699,236

-353,753

-13.11%

Total

Changes

Interest income and similar revenues from foreign currency assets as of December 31st, 2002 amounted to €117,043 thousand compared with €238,145 thousand on December 31st, 2001. 1.2 - Composition of item 20 "Interest expense and similar charges" (in thousands of euros)

a) on due to banks b) on due to customers c) on debt securities in issue of which: - on certificates of deposit d) on third party assets under administration e) assumed financial charges on distribution of share premiums f) on subordinated liabilities g) other interest expense h) negative spread on hedging transactions Total

2002

2001 pro-forma

266,349 355,226 431,926

463,740 468,965 494,542

-197,391 -113,739 -62,616

-42.57% -24.25% -12.66%

74,377

100,435

-26,058

-25.95%

141

194

-53

-27.32%

30,376 -

21,017 31,506 -

-21,017 -100.00% -1,130 -3.59% -

-

5,722

-5,722 -100.00%

1,084,018

1,485,686

Changes

-401,668

-27.04%

On December 31st, 2002, interest expense and similar charges on foreign currency liabilities amounted to €63,066 thousand compared with €224,728 thousand on December 31st, 2001.

155

Notes to the consolidated financial statements

SECTION 2 - COMMISSIONS Commissions are recognized under items 40 and 50 of the consolidated income statement. The breakdown is shown below:

2.1 - Composition of item 40 "Commission income" (in thousands of euros)

a) guarantees given b) credit derivatives c) management, trading and advisory services: 1. securities trading 2. currency trading 3. asset management: 3.1 portfolio 3.2 mutual 4. securities under custody 5. custodian bank 6. securities placement 7. order collection 8. advisory service 9. distribution of third party services: 9.1 asset management: a) portfolio b) mutual 9.2 insurance products 9.3 other products d) collection and payment services e) servicing for securitization transaction f) tax collection services g) other services: - expense recovery on deposits and c/a - other Total

156

2002

2001 pro-forma

21,732 646

21,673 586

59 60

0.27% 10.24%

405,047 27,942 13,259 234,899 69,202 165,697 9,012 14,892 16,038 18,752 1,887 68,366 8,934 62 8,872 43,537 15,895 122,430

447,102 30,451 16,028 270,605 73,636 196,969 10,159 15,563 21,948 22,550 468 59,330 8,406 8,406 37,039 13,885 115,489

-42,055 -2,509 -2,769 -35,706 -4,434 -31,272 -1,147 -671 -5,910 -3,798 1,419 9,036 528 62 466 6,498 2,010 6,941

-9.41% -8.24% -17.28% -13.19% -6.02% -15.88% -11.29% -4.31% -26.93% -16.84% 303.21% 15.23% 6.28%

235 33,635 187,962

34,412 168,760

235 -777 19,202

-2.26% 11.38%

53,924 134,038

45,361 123,399

8,563 10,639

18.88% 8.62%

771,687

788,022

-16,335

-2.07%

Changes

5.54% 17.54% 14.48% 6.01%

Notes to the consolidated financial statements

Breakdown of commission income by distribution channel (in thousands of euros)

2002

2001 pro-forma

a) own branches: 1. asset management 2. securities placement 3. third party services and products

319,303 234,899 16,038

351,883 270,605 21,948

-32,580 -35,706 -5,910

-9.26% -13.19% -26.93%

68,366

59,330

9,036

15.23%

b) external distribution: 1. asset management 2. securities placement 3. third party services and products

-

-

-

-

-

-

319,303

351,883

-32,580

Total

Changes

-9.26%

2.2 - Composition of item 50 "Commission expense" (in thousands of euros)

a) guarantees received b) credit derivatives c) management and trading services: 1. securities trading 2. currency trading 3. asset management: 3.1 own portfolio 3.2 third party portfolio 4. securities under custody 5. securities placement 6. external sale of securities, products and services d) collection and payment services e) other services Total

2002

2001 pro-forma

385 454 31,724 7,903 662 6,323 6,323 4,142 11,238

837 415 27,959 4,720 675 5,054 5,054 3,932 12,982

-452 39 3,765 3,183 -13 1,269 1,269 210 -1,744

-54.00% 9.40% 13.47% 67.44% -1.93% 25.11%

1,456 26,977 13,023

596 23,775 17,752

860 3.202 -4,729

144.30% 13.47% -26.64%

72,563

70,738

1,825

2.58%

Changes

25.11% 5.34% -13.43%

157

Notes to the consolidated financial statements

SECTION 3 – PROFITS AND LOSSES FROM FINANCIAL TRANSACTIONS

3.1 -Composition of item 60 "Profits/losses from financial transactions" 2002 (in thousands of euros)

A.1 write-ups A.2 write-downs B other profits/losses

Total

1. 2. 3. 4.

treasury bonds other debt securities equity securities derivatives on securities

Securities

Other Currencies transactions

46,471 -48,943 13,388

xxx xxx 11,702

10,916

11,702

Total

151,739 198,210 -138,049 -186,992 30,840 55,930

44,530

67,148

38,604 23,543 -16,812 -34,419

Profits and losses from financial transaction include €32,798 thousand as a result of the change in the accounting criteria to value trading securities and derivatives. The total impact from the change in valuation is €37.081 thousand. The remaining €4,283 thousand, referring to the retrospective effect, have been classified under “Extraordinary income”.

2001 (in thousands of euros)

A.1 write-ups A.2 write-downs B other profits/losses

1. 2. 3. 4.

158

Securities

Other Currencies transactions

Total

10,308 -17,796 32.568

xxx xxx 16,334

1,435 -3,272 13,961

11,743 -21,068 62,863

Total

25,080

16,334

12,124

53,538

treasury bonds other debt securities equity securities derivatives on securities

22,076 8,587 -5,436 -147

Notes to the consolidated financial statements

SECTION 4 – OPERATING COSTS Operating costs include staff costs for €815,492 thousand. The breakdown of said cost is reported in the income statement.

4.1 – Average number of employees per category

2002

a) executives c) managers d) other personnel

Total

2001 pro-forma

Changes

193 4,402 8,413

180 4,313 8,782

13 89 -369

6.94% 2.06% -4.20%

13,008

13,275

-267

-2.01%

As of December 31st, 2002, the headcount was 13,013; on December 31st, 2001 it was 13,002 employees.

4.2 - Composition of sub-item 80 b) "other administrative expenses"

(in thousands of euros)

a) property expenses: - rent expenses and maintenance costs - cleaning costs - electric power, heating and water b) indirect taxes c) postal and telephone expenses, print-outs and other office expenses d) maintenance and rents for furniture plants and equipment e) fees for professional services f) information and survey costs g) security costs (security and armored truck guards) h) third party services i) advertising, entertainment and gifts l) insurance premiums m) compensations to directors, statutory auditors and independent auditors n) rentals and other travel expenses o) other sundry costs and expense Total

2002

2001 pro-forma

Changes

81,776 54,911 11,004 15,861 75,745

64,431 35,759 12,253 16,419 76,640

17,345 19,152 -1,249 -558 -895

26.92% 53.56% -10.19% -3.40% -1.17%

56,021

53,816

2,205

4.10%

53,235 43,733 19,364

58,859 41,540 17,934

-5,624 2,193 1,430

-9.56% 5.28% 7.97%

19,268 19,147 12,019 10,552

16,817 16,282 14,137 10,869

2,451 2,865 -2,118 -317

14.57% 17.60% -14.98% -2.92%

8,035 7,141 66,226

8,585 5,845 60,569

-550 1,296 5,657

-6.41% 22.17% 9.34%

472,262

446,324

25,938

5.81%

159

Notes to the consolidated financial statements

SECTION 5 – WRITE-DOWNS, WRITE-BACKS AND PROVISIONS

5.1 - Composition of item 120 "Write-down of loans and provisions for guarantees and commitments" (in thousands of euros)

2002

a) loan write-downs 283,969 of which: - lump-sum for country risk 108 - other lump-sum write-downs 14,005 b) provisions for guarantees and commitments of which: - lump-sum for country risk - other lump-sum provisions Total

2001 pro-forma

Changes

211,632

72,337

34.18%

1,230 11,265

-1,122 2,740

-91.22% 24.32%

4,219

3,011

1,208

40.12%

5 392

2,173

5 -1,781

-81.96%

288,188

214,643

73,545

34.26%

5.2 – Change in the allowance for general banking risks During the year there have been no changes in the Allowance for general banking risks.

SECTION 6 – OTHER ITEMS OF THE INCOME STATEMENT

6.1 - Composition of item 70 "Other operating income"

(in thousands of euros)

a) expenses payable by third parties charged on deposits and c/a b) tax recovery c) expense recovery d) securization proceeds c) property rent income e) other Total

160

2002

2001 pro-forma

Changes

127,373 63,071 9,885 15,314 3,606 15,306

78,887 65,500 17,599 10,179 25,446

48,486 -2,429 -7,714 15,314 -6,573 -10,140

61.46% -3.71% -43.83% -64.57% -39.85%

234,555

197,611

36,944

18.70%

Notes to the consolidated financial statements

6.2 - Composition of item 110 "Other operating expense" (in thousands of euros)

a) charges on fixed assets under lease b) option premiums c) other

Total

2002

2001 pro-forma

3,690 1,405 6,298

2,218 2,776 11,081

1,472 -1,371 -4,783

66.37% -49.39% -43.16%

11,393

16,075

-4,682

-29.13%

Changes

6.3 - Composition of item 190 "Extraordinary income" (in thousands of euros)

2002

a) profit from the disposal of Impresol 175,559 b) profits from disposal of: 10,081 - equity investments 7,071 - fixed assets 3,010 c) recognition of deferred tax assets 1,375 d) retrospective effect of the change in the accounting of securities 4,283 e) other 32,549 Total

223,847

2001 pro-forma

Changes

26,417 21,132 5,285

175,559 -16,336 -14,061 -2,275

-61.84% -66.54% -43.05%

5,947

-4,572

-76.88%

21,888

4,283 10,661

48.71%

54,252

169,595 312.61%

The income from the disposal of the shareholding in Impresol includes €159,912 thousand relating to the residual capital gain realized by the former Banca Popolare di Novara s.c.r.l. upon contributing a business line at the end of 2000. 6.4 - Composition of item 200 "Extraordinary expense" (in thousands of euros)

a) losses from disposal of: - fixed assets - equity investments b) early retirement schemes c) alignment of the asset value of vested shareholdings d) other Total

2002

2001 pro-forma

Changes

8,516 5,803 2,713 3,465

1,498 1,081 417 2,649

7,018 468.49% 4,722 436.82% 2,296 550.60% 816 30.80%

23,051

3,139 12,383

-3,139 -100.00% 10,668 86.15%

35,032

19,669

15,363

78.11%

161

Notes to the consolidated financial statements

6.5 - Composition of item 240 "Income taxes for the year" 2002 (in thousands of euros)

IRPEG

IRAP

Other taxes

Total

199,158

114,948

624

314,730

607

-352

-

255

-1,126

1

154

-971

4. Income taxes for the year

198,639

114,597

778

314,014

2001 pro-forma (in thousands of euros)

IRPEG

IRAP

Other taxes

Total

192,115

36,725

952

229,792

2. changes in prepaid taxes (+/-)

18,767

4,095

-10,995

11,867

3. changes in deferrend taxes (+/-)

14,306

1,549

816

16,671

225,188

42,369

-9,227

258,330

1. current taxes (-) 2. changes in prepaid taxes (+/-) 3. changes in deferrend taxes (+/-)

1. current taxes (-)

4. Income taxes for the year

SECTION 7 – OTHER INFORMATION ON THE INCOME STATEMENT 7.1 – Geographical distribution of income (in thousands of euros)

a) b) c) d) e)

162

2002 Italy

Other Countries

2001 pro-forma Italy Other Countries

interest income and similar revenues dividends and other income commission income profits from financial transactions other operating income

2,169,191 15,230 756,295 68,436 234,233

176,292 31 15,392 -1,288 322

2,454,521 15,749 778,362 52,845 197,005

244,715 26 9,660 693 606

Total

3,243,385

190,749

3,498,482

255,700

Notes to the consolidated financial statements

Chapter D – Other information SECTION 1 – DIRECTORS AND STATUTORY AUDITORS

1.1 - Remuneration Remunerations paid in 2002 to Directors and Statutory Auditors of the Parent company, who held these offices – be it even for part of the year – with the Parent company, or with the other companies of the Group, totaled €4,550 thousand and €512 thousand, respectively. The nominal listing of remunerations of Directors, Statutory Auditors and the General Manager of the Parent company is shown in Chapter D “Other information” of the notes to the financial statements of the Parent company.

1.2 – Loans extended and guarantees issued Loans extended and guarantees issued during the year to the Directors of the Parent company reached €202,884 thousand. Loans extended and guarantees issued during the year to Statutory auditors of the Parent company amounted to €444 thousand.

163

Charts and attachments to the consolidated financial statements

VICENZA Palladian Basilica

(in thousands of euros)

Initial shareholders’ equity as a result of merger

Share capital

87,473

58,265

Net Total income sharehold. for the year equity

2,874,410

Change in negative differences upon consolidation and application of the equity method

280

-757

-477

Further offsets of negative differences against positive - Differences upon consolidation and application of the equity method

-735

-5,946

-6,681

688

Drawdown on reserve under art, 19 D,Lgs, n, 87/92 Other income for the year

1,194,747

Allow. for Negative Negative general differences on consolidation bank. risks equity meth. differences

6,703

342

161,262

Reserves Revaluation reserve

34,128

Capital increase as a result of the bond conversion

1,331,832

Share premiums

58

1,030

-1,030

-1,030

-7,978

-7,920

Net income for the year Shareholders’ equity as of 31 December 2002

429,213

1,332,174

162,008

1,185,739

87,473

58,265

33,673

-

429,213

429,213 3,288,545

Charts and attachments the consolidated financial statements

166

Statement of changes in the consolidated shareholders’ equity

Charts and attachments the consolidated financial statements

Consolidated statement of cash flows This consolidated statement of cash flows was drawn up by comparing the 2002 consolidated financial statements to the corresponding pro-forma accounts as of December 31st, 2001.

SOURCES OF FUNDS (in thousands of euros)

2002

CASH FLOWS FROM OPERATING ACTIVITIES Provision for termination benefits Amortization of positive consolidation differences Amortization of intangible assets Depreciation of tangible assets Provisions for risks and charges: - retirement fund and similar obligations - tax provision - other provisions Net income for the year

43,236 27,239 84,792 65,811 185 360,603 53,025 429,213

1,064,104

241,497 3,765 108,752 130,681

484,695

INCREASE IN RAISED FUNDS Due to customers Third party assets under administration Other liabilities Subordinated liabilities

DECREASE IN EMPLOYED FUNDS Cash and funds with central banks and post offices Treasury bills and similar bills eligible to refinancing with central banks Due from banks Positive differences on application of the equity method Tangible assets Accrued income and prepaid expenses

Total

28,482 1,119,765 2,535,967 735 27,383 24,493

3,736,825

5,285,624

167

Charts and attachments the consolidated financial statements

APPLICATION OF FUNDS (in thousands of euros)

2002

CASH FLOWS USED IN OPERATING ACTIVITIES Drawdown on termination benefit provisions Drawdown on provisions for risks and charges: - retirement fund and similar obligations - tax provision - other provisions

26,031 13,303 319,386 16,715

375,435

3,021,176 285,855 84,236 32,752 128,876

3,552,895

694,463 403,651 107,359 71,241 13,762 47,450 8,315 11,053

1,357,294

DECREASE IN RAISED FUNDS Due to banks Debt securities in issue Accrued expenses and deferred income Minority interest Other shareholders’ equity decreases

INCREASE IN EMPLOYED FUNDS Due from customers Bonds and other debt securities Shares and other equity securities Equity investments Equity investments in companies of the Group Positive consolidation differences Intangible assets Other assets

Total

168

5,285,624

Charts and attachments the consolidated financial statements

Composition of item 70 “Equity investments” (euro denominated)

Head office

Book value 31/12/2001 PF

Book value 31/12/2002

% ownership

1,748

35,989 107,694,822 28,293 20,823,557

49.000% 38.160% 37.150% 33.830%

47,000

1,283,324

33.333%

3,000 199,800

64,159 467,348 1,216,320

25.100% 25.050% 24.000%

41,827,556 3,621,245 16,025,586 37,699,714 37,238,870 15,090,877 -

22.089% 20.000% 20000%

6,105,725 181,398

19.391% 19.248%

1 1 15,343 3,099 1,967,480 41,358 105,434,489 826,800 17,704,605 252,315

15.556% 15.000% 14.950% 12.500% 10.714% 10.000% 10.000% 10.000% 10.000% 10.000%

22,081 3,099 1 134,287 23,343,701 5,140,480

10.000% 9.998% 9.857% 9.286% 9.003% 8.496%

106,658 6,563,386 1,960,225 509,784

8.221% 8.144% 8.144% 8.000%

Increments Decrements

Significant equity investments Novara Promuove S.r.l. Novara Banca per il Leasing - Italease S.p.A. Milan Veronagest S.A. Luxembourg Factorit S.p.A. Milan GEMA Magazzini Generali Banca Pop. di Verona Castelnovo Banco S.Geminiano e S.Prospero S.p.A. di Sotto Società Cooperativa fra le Banche Popolari "L.Luzzatti" S.c.r.l. Rome G.I. Holding S.p.A. Bergamo Pama S.p.A. Rovereto Istituto Centrale delle Banche Popolari Italiane S.p.A. Rome Aosta Factor S.p.A. Aosta Conceria Mastrotto S.p.A. Arzignano (VI) Cattolica Partecipazioni Assicurative S.p.A. Verona Duomo Assicurazioni S.p.A. Milan Duomo Previdenza S.p.A. Milan

37,736 95,268,676 23,293 19,893,557

12,426,145 5,000 930,000

1,330,324 67,159 34,129,556 3,601,245 37,699,714 14,057,962

667,148 1,216,320 7,698,000 20,000 16,025,586 37,238,870 1,032,915

Other equity investments Linea S.p.A. Milan Financiere Galliera S.A. F - Paris SITCOM S.p.A. Società Italiana Comunicazione Rome Natura Appennino S.r.l. Montefiorino Mecmarket.com S.p.A. Verona Consorzio "Energia 1" Verona Cattolica Aziende S.p.A. Verona Bergamo Stadio S.p.A. Bergamo Crediop S.p.A. Rome Edulife S.p.A. Verona Nuova MAA Assicurazioni S.p.A. Turin Omnia Factor S.p.A. Milan Servizio Riscossione Imposte e Tesorerie SE.RI.T. S.p.A. (in liquid.) Cercola (NA) Consorzio Sviluppo Sicilia Paternò (CT) BIC Piemonte S.p.A. (in liquidazione) Torino Consorzio Triveneto S.p.A. Padova Promatech S.p.A. Colzate Arca S.G.R. S.p.A. Milan Consorzio Interbancario Lombardo per la Moneta Elettronica - CILME S.p.A. Zingonia Arca Merchant S.p.A. Milan Finarca S.p.A. Milan Serfactoring S.p.A. Milan

6,081,956 181,398 1 2,324 1 3,099 1,580,480 41,358 41,459,643 826,800 17,704,605 252,315 24,694 661 1 134,287 23,343,701 5,140,480 106,658 8,523,611 509,784

23,769

2,323 15,342 387,000 63,974,846

2,614 2,438

1,960,225 1,960,225

169

Charts and attachments the consolidated financial statements

(euro denominated)

Società Aree Industriali e Artigianali - S.A.I.A. S.p.A. Eurofidi Consorzio Garanzia Fidi Finanziaria per lo sviluppo e la valorizzazione dell'economia reggiana - SOFISER S.r.l. e-MID S.p.A. Impianti Sestola 2000 S.r.l. Borsa Italiana S.p.A. Evoluzione 94 S.p.A. Assofin Brescia S.p.A. (in liquidazione) Ente Autonomo per le Fiere di Verona Impianti S.r.l. (in liquidazione) Euros Consulting S.p.A. CartaSì S.p.A. Veneto Sviluppo S.p.A. Unione Fiduciaria S.p.A. Centrale dei Bilanci S.r.l. - Società per gli Studi Finanziari Fondo Retex Gal - Valle Brembana S.r.l. Veronamercato S.p.A. Centro Interportuale Merci - C.I.M. S.p.A. Società per i Servizi Bancari - SSB S.p.A. Istituto per l'Enciclopedia della Banca e della Borsa S.p.A. Compagnia Investimenti e Sviluppo CIS S.p.A. Aeroporto Valerio Catullo di Verona Villafranca S.p.A. Adica Fiduciaria Lombarda S.p.A (in liquidazione) Bilanciai International Società di Cooperazione Agricola S.p.A. (in liquidazione) CE.P.I.M. - Centro Padano Interscambio Merci S.p.A. Istituto Finanziario Regionale Piemontese - Finpiemonte S.p.A. Società Gestione per il Realizzo S.p.A. Società per l'Aeroporto Civile di Bergamo-Orio al Serio S.p.A. Autostrada del Brennero S.p.A. Società Autostrada Brescia Verona Vicenza Padova S.p.A. Centrale Rischi Finanziaria - CRIF S.p.A. Centrosim S.p.A. SOA Nordest S.p.A.

170

Head office

Book value 31/12/2001 PF

Intra (VB) Turin

74,689 609,419

Reggio nell'Emilia Milan Sestola Milan Milan Brescia Verona Monza (MI) Rome Rome Venice Milan

364,825 436,940 77,469 3,843,266 2,527,167 11,733 503,545 5 614,023 1,065,970 1,083,127 1,399,045

Turin Venice Zogno Verona Novara Milan

271,140 619,747 506 1,205,859 539,148 170,165

Rome

32,516

Villafranca V.

449,741

Sommacampagna

436,209

Increments Decrements

77,475

16,419 53,504 793,406 232

893,015 1,927,604 219,270

17,642

7,771 108,176

Book value 31/12/2002

% ownership

152,164 609,419

7.826% 7.687%

364,825 436,940 61,049 3,896,770 1,733,762 11,501 503,545 5 614,023 1,065,970 1,083,127 506,030

7.640% 7.350% 7.130% 6.749% 6.735% 6.694% 6.452% 6.402% 6.275% 5.650% 5.268% 5.229%

2,198,744 400,477 506 1,205,859 521,506 170,165

5.000% 4.949% 4.900% 4.464% 4.413% 4.298%

24,745

4.085%

557,917

4.025%

436,209

4.019%

4,028 516,000

3.900% 3.753%

22,320

3.750%

Milan Campogalliano (MO)

4,028 -

San Remo (IM)

23,509

Fontevivo

388,578

388,578

3.737%

1,450,727 499,070

1,450,727 499,070

3.480% 3.479%

507,157 11,086,356

3.464% 3.333%

10,411,958 22,724 249,104 39,886

2.800% 2.615% 2.500% 2.500%

Turin Rome Orio al Serio Trento

507,157 25,565

Verona Bologna Milan Padova

22,724 249,104 -

516,000 1,189

11,060,791 10,411,958

39,886

Charts and attachments the consolidated financial statements

(euro denominated)

PROFINGEST - Istituto per la promozione della ricerca e dell'insegnamento sulla finanza e sulla gestione d'impresa Europrogetti & Finanza S.p.A. Finligure S.p.A. Società Interbancaria per l'Automazione - Cedborsa S.p.A. Consorzio Sempione (in liquidazione) Società Recupero Centri Storici SO.RE.C.S. S.p.A. (in liquidazione) Sequenza S.p.A. SITEBA S.p.A. - Sistemi Telematici Bancari Kiwi.com S.p.A. Insediamenti Produttivi Piemonte Sett. - Nordind S.p.A. Mediocredito del Friuli Venezia-Giulia S.p.A. Finlombarda - Finanziaria per lo sviluppo della Lombardia S.p.A. Comitato Triveneto di Promozione e Sviluppo - CTPS S.p.A. Aeroporto di Reggio Emilia S.r.l. S.A.C.E. S.p.A. Società Aeroporto Cerrione Interporto di Bologna S.p.A. Sofinco S.p.A. ABE Clearing S.A.S. Interporto di Padova S.p.A. Firs Italiana di Assicurazioni S.p.A. (in liquidazione) CFN - Class Financial Network S.p.A. Centro Agro-Alimentare di Parma S.r.l. Città degli Studi S.p.A. Mercato Mobiliare di Nord Est S.p.A. Finanziaria Ligure per lo Sviluppo Economico - FI.L.S.E. S.p.A. Reggiana Alimentari S.p.A. Aeroporto G. Marconi di Bologna S.p.A. Società Investimenti Fieristici - SIF S.p.A. Mirabello 2000 S.p.A. ERVET Politiche per le imprese S.p.A. Tecnofin Trentina S.p.A. Agenzia per lo Sviluppo S.p.A. Centro Tecnofin Servizi S.p.A. Lingotto S.p.A. Società Finanziaria di Promozione della Cooperazione Economica con i Paesi dell'Est europeo - FINEST S.p.A. Nomisma - Società di Studi Economici S.p.A.

Head office

Bologna Rome Genoa

Book value 31/12/2001 PF

Increments Decrements

55,518 217,847 1

18,022

Book value 31/12/2002

% ownership

37,496 217,847 1

2.491% 2.331% 2.199%

1,044,393 516

2.073% 2.021%

Milan Rome

1,044,393 516

Vercelli Bolzano Milan P - Madeira

10,811 4,152,664 47,566 2,254,821

7,000

3,811 4,152,664 47,566 2,254,821

2.000% 1.949% 1.842% 1.765%

Vercelli Udine

12,061 1,066,533

641

11,420 1,066,533

1.679% 1.638%

Milan

115,945

115,945

1.623%

Venice Reggio nell'Emilia

7,923 27,016

1,377 7,093

6,546 19,923

1.500% 1.469%

Cerrione (BI) Bologna Modena F - Paris Padova

60,266 173,172 1,000 310,907

5,840

54,425 173,172 520,000 1,000 310,907

1.459% 1.429% 1.429% 1.389% 1.327%

Rome Milan Parma Biella Brescia

2 38,734 42,473 36,152 10,655

2 38,734 42,473 30,452 10,451

1.319% 1.242% 1.205% 1.170% 1.141%

Genoa Reggio nell'Emilia Bologna Parma Reggio nell'Emilia Bologna Trento Rovereto Bologna Turin

175,699 20,658 45,724 40,903 97,173 174,227 134,268 78,848 547,241

175,699 198,016 20,658 45,724 104 97,173 174,227 134,268 78,848 -

1.077% 1.000% 0.909% 0.877% 0.860% 0.795% 0.758% 0.758% 0.686% 0.646%

Pordenone

568,103

568,103

0.431%

Bologna

19,527

19,496

0.407%

520,000

5,701 204

198,016

40,799

547,241

31

171

Charts and attachments the consolidated financial statements

Book value 31/12/2002

% ownership

5,309

5,309

0.387%

Modena Pordenone Stresa (VB)

4,596 1 1

4,596 1 1

0.360% 0.333% 0.306%

Parma

15,473

9,177

0.241%

B - La Hulpe Palermo

47,740 33,570

47,740 33,570

0.163% 0.143%

Rome Rome Trento

70,349 123,804 8,005

70,349 123,804 8,005

0.104% 0.079% 0.053%

Verona Ancona F-Paris Padoa

25 1,033 7,693 77,087

25 1,033 7,693 77,087

0.018% 0.009% 0.007% 0.006%

9,340 99 4,782 14 5,547 36,485 339,579 1 34,086 2,845 1,964,317 82,316

9,340 99 4,782 14 5,547 1 -

0.005% 0.004% 0.001% 0.001% 0.001%

(euro denominated)

Head office

Matilde di Canossa S.p.A. PROMO - Società per la promozione dell'economia modenese società consortile a r.l. Seleco S.p.A. Società dei Congressi S.S. (in liquidazione) SOGEAP Aeroporto di Parma Società per la Gestione S.p.A. SWIFT - Society for Worldwide Interbank Financial Telecommunication S.C. I.R.F.I.S. - Mediocredito della Sicilia S.p.A. Società per il Mercato dei Titoli di Stato - MTS S.p.A. Efibanca - Ente Finanziario Interbancario S.p.A. Interbrennero S.p.A. Consorzio Agrario Interprovinciale di Verona e Vicenza S.c.r.l. Banca Popolare di Ancona S.p.A. Sofaris S.A. Banca Antoniana Popolare Veneta S.c.p.a.r.l. Westdeutsche Genossenschafts Zentralbank - WGZ Bank EG SAS Carte Bleue Banca Popolare di Vicenza S.c.r.l. Consorzio Bancario SIR S.p.A. (in liquidazione) Società Cattolica di Assicurazione S.c.r.l. Cittanova 2000 S.p.A. Dianos S.p.A. DZ Bank - A.G. Intesa BCI S.p.A. Sviluppo Territorio S.p.A. (in liquidazione) Tecnosistemi S.p.A. Monte Titoli S.p.A.

S.Polo d'Enza

Total

172

D - Duesseldorf F-Paris Vicenza Rome Verona Modena Collegno D - Karlsruhe Milan Bergamo Milan Milan

Book value 31/12/2001 PF

345,997,242

Increments Decrements

6,296

36,485 339,579

3,251,171

34,086 2,845 5,215,488 82,316

171,799,605 100,557,578 417,239,269

INVESTOR RELATIONS telephone e-mail fax Internet

+39-0458675537 [email protected] +39-0458675131 www.bpv.it (Investor Relations Section)

WEB SITES OF THE COMPANIES OF THE GROUP www.bpv.it Banco Popolare di Verona e Novara S.c.ar.l. www.bpn.it Banca Popolare di Novara S.p.A. www.creberg.it Credito Bergamasco S.p.A. www.alettibank.it Banca Aletti & C. S.p.A. www.crebergsim.it Aletti Invest Sim S.p.A. www.gestielle.it Aletti Gestielle SGR S.p.A. www.gestimerchant.it Aletti Merchant S.p.A. www.leasimpresa.it Leasimpresa S.p.A. www.sestrispa.it Sestri S.p.A. www.sarispa.it Sannitica Riscossioni S.p.A.

Publishing coordination Group Strategic Marketing and Communications Photolith and print EBS-Editoriale Bortolazzi-Stei - Verona Pictures Archives Banco Popolare di Verona e Novara