2005
INTERIM
TRANSITION
TO
RESULTS
IAS/IFRS
MILANO, Palazzo Mezzanotte - September 15th, 2005
1H 2005 - Results at a Glance
30.06.2005
30.06.2004
pro-forma
Var.
61.6
49.8
23.7%
Total income
598.7
571.3
4.8%
Operating profit
205.7
186.2
10.5%
Pre-tax income
131.1
109.7
19.7%
ROE (adj.)
14.5%
13.7%
80 b.p.
COST / INCOME
63.5%
65.5%
-200 b.p.
5.2%
5.3%
-10 b.p.
GROUP NET INCOME
Tier 1 ratio
2
1H 2005 Pre-Tax Income - Breakdown
 Pre-tax income shows growth in core businesses
 Retail banking*: positive contribution mainly thanks to NII and credit
quality
 Consumer credit: in line with budget but weaker 2Q (-9.6% QoQ)
 Service companies: decrease in Infogroup’s income is due to its new
repositioning within the Group
 Tax collection services: delays in government refunds
% weight
YoY change
26%
€ 142.4
mn.
2%
25%
8%
-4%
36%
16%
2%
58%
-17%
-300%
Retail
Bkg.
Consumer
cred.
Product
co.
Service
co.
Tax
collect.
P-T
income
Pre-tax income, goodwill excluded
*B. CR Firenze, CR Pistoia, CR Spezia, CR Civitavecchia, CR Orvieto, CR Mirandola
Retail
Bkg.
Consumer
cred.
Product
co.
Service
co.
3
Tax
collect.
P-T
income
Net Interest Income
 Positive contribution from both retail banking and
consumer credit
Net interest income
4.72% 4.70%
4.66%
2.07%
2.08%
Retail banking*
4.56% 4.55%
3M '04
6M '04
360.3
FY '04
3M '05
6M '05
181.0
-4.7%
-4.7%
-3.9%
YoY change
Consumer credit
167.1
19.4% 19.7%
16.8%
13.0% 12.7%
12.0%
mn
166.5
179.3
170.6
9M '04
-2.6%
+7.8%
167.6
5.8%
4.53%
2.12% 2.16% 2.14%2.13%
334.1
5.4%
1Q '04
2Q '04
3Q '04
3 months Euribor
4Q '04
1Q '05
2Q '05
Customer spread
* B. CR Firenze, CR Pistoia, CR Spezia, CR Civitavecchia, CR Orvieto, CR Mirandola
YoY change
3M '04
6M '04
9M '04
FY '04
3M '05
4
6M '05
NII – Customer loans
 Increase in average outstandings* leads to higher
contribution margin despite mark-up reduction

retail banks: change in portfolio mix (higher mortgage
loans weight  lower mark-up)

consumer credit: less household spending and stronger
competition
YoY
change
Mark-up
change
1H 2005
% Weight
1H 2004
1H 2005
Total loans*
14,462
15,709
8.6%
Retail banks
Individuals
Corporates
11,478
6,577
4,901
12,392
7,198
5,194
8.0%
9.4%
6.0%
79%
46%
33%
(0.14)
(0.19)
(0.10)
2,984
3,317
11.2%
21%
(0.42)
Consumer credit
* Progressive average outstanding loans
(0.17)
5
NII – Customer deposits
 Higher contribution margin due to both volumes* and
mark-down

current accounts re-pricing

individuals still lead but corporate mark-down is
improving
YoY
change
Mark-down
change
1H 2005
% Weight
1H 2004
1H 2005
Total deposits*
14,680
15, 568
6.1%
Retail banks
Individuals
Corporates
13,939
11,150
2,789
14,646
11,597
3,048
5.1%
4.0%
9.3%
95%
76%
19%
9 bp
7 bp
11 bp
740
922
24.6%
5%
87 bp
Consumer credit
* Progressive average outstanding loans
12 bp
6
Mortgage Loans
 Sustainable volume growth, in line with budget
 stable spread despite stronger competition
 improving quality, far better then the system
 Continued synergies with Findomestic: all branches
operative
Doubtful loans*
0.96%
+6.3%
+15.8%
5.3
0.70%
(13% yearly)
5.6
0.52%
0.36%
Italy
BCRF
5.8
3M '05
6M '05
Total loans - bn
Distributed by Findomestic
10.4
32
10.5
22
10.2
bn
FY '04
3M '05
6M '05
* B. CR Firenze, CR Pistoia, CR Civitavecchia, CR Orvieto. Source: Assofin
10
mn
FY '04
3M '05
6M '05
7
5% of
Group flows
Non-Interest Income
 Stable fees on adjusted basis:
 positive impact from re-pricing of current accounts
 AUM campaigns: short term negative impact; average
customer portfolio still comprises monetary products
Fees + Other income
 +2% YoY PF
 Flat on adj. basis
206
202
102
100
69
1Q '04 PF
75
71
70
2Q '04 PF
Fees
108
98
3Q '04
4Q '04
67
1Q '05
69
2Q '05
Fees + other income
8
Operative costs
 Adjusted costs better than business plan. The stated
values affected by the merger of Datacentro and the
increase of tax stamps:
 YoY comparisons throughout 2005 affected by the increase of
government tax stamps
 Datacentro costs moved from other op. expenses to other
administrative costs
Var.
Var. stamps
& duty excl.
(356.3)
2.6%
1.5%
2.6%
(212.1)
1.7%
(137.5)
8.9%
(144.2)
3.9%
(27.5)
(28.8)
-4.5%
(28.8)
-4.5%
(393.0)
(376.6)
4.4%
(385.1)
2.0%
1H ‘05
1H ‘04
Var.
(365.5)
(347.9)
5.1%
(215.7)
(210.3)
Other costs (149.8)
Admin. costs
Personnel
Depreciation
Total costs
1H ‘04
PF
0.9%
1.0%
9
Customer Loans
 Total customer loans (+4.2%) in line with budget
 Stable quality and stable market share
Loans
 +3.2% banks
 + 6.0% c. credit
Market share
8.7%
8.4%
Euro bn
10.7
12.7
12.3
11.2
5.7%
2.4
2002
2.8
2003
Corporate & Retail
* Parent company on business territory
8.6%
3.3
2004
3.5
1.27%
1H '05
2003
Consumer Credit
5.5%
5.3%
NPLs/
Net loans
1.10%
1.09%
1.07%
2004
1Q '05
1H '05
Corporate unit mkt. share*
NPLs market share*
10
Capital ratios
 Stable Tier 1 ratio as at 30.06.2005
 Findomestic Banca recorded with the equity method
will strengthen capital ratios
31.12.2004
30.06.2005
Shareholders' equity
1,151.4
1,152.5
Tier 1 capital
Tier 2 capital
Regulatory capital
993.6
901.4
1,805.3
993.8
893.0
1,796.7
18,597.5
19,116.7
Risk weighted assets
Tier 1 ratio
Solvency ratio
5.34%
9.71%
5.20%
9.56%
11
IAS/IFRS
FIRST TIME ADOPTION
First Time Adoption - Criteria
 IAS/IFRS as per EU Commission ratifications released up
until January 2005. IAS 32 and 39 are included.*
 Value adjustments recognised in the shareholders’ equity
(IFRS 1)
 Applied the integral version of IAS 39 ratified by EU Commission
 Fair value model has been adopted to revaluate investment and instrumental
properties
 Amortized costs as at 31.12.2004 is equal to face value because transactional
costs (up-front) have been reckoned not significant.
 Findomestic Banca (JV with BNP Paribas Group) has been accounted for the
equity method (IAS 31)
 In the collective assessment of performing loans, Basel II recommendations have
been optimized
 Perimeter of consolidation comprises companies active in business sectors other
than that of the parent company (i.e. Centrovita - bancassurance)
 Put options have been accounted following IAS 32
* Modification of the existing standards, new standards and/or changes of interpretation which could arise may vary FTA
impact.
13
> Impatto della FTA sul Patrimonio netto e sul Patrimonio di vigilanza
Nota
L’impatto della prima applicazione dei principi IAS/IFRS sul Patrimonio di vigilanza consolidato e sui coefficienti prudenziali è stato stimato considerando i
filtri prudenziali indicati dal Comitato di Basilea sul trattamento dei valori IAS.
14
15
> Impatto della FTA sulla qualità del credito
15
16
FTA - Impact at a glance
 No material impact on shareholders’ equity
2.1
150.3
1.1
24.2
60.8
1.7
+ € 42
million
27.8
31.1 30.9
1.1
26.0
32.5
47.6
1,193
1,151
Euro million
.
s
s
es -HFT tions acts ects
FT
FS rivat
ies UI TY
ets ibles lding
I TY loan
t
c
i
H
A
s
n
f
r
U
p
s
f
g
s
p
a
l
Q
ts
ts
de
ino T EQ
t o er im cal e
d A ntan reho llow . Lblt
M
u
e
T E Tota Asse Asse ging
x
I
P
E
a
s
A
th
NE
h
in
Fi
.
.
N
Fi
d
S
F
n
n
O
i
i
4
e
4
F
F
0
0
&h
20
20
.
S
c
IA
Se
16
> Raccordo tra Patrimonio netto contabile civilistico e IAS (1/2)
(1) La valutazione ha tenuto conto degli accantonamenti a Fondo rischi su crediti (voce 90 del passivo) esistenti al 31 dicembre 2004, pari
17
a 24,7 milioni di euro, che sono stati imputati in diretta diminuzione di tali crediti.
18
FTA - Impact Breakdown
*
The evaluation takes into account provisions for risks and charges as at 31.12.2004
18
APPENDIX
FTA – Impact on balance sheet
31.12.2004
Fin. Assets held for trading (HFT)
IFRS adj.
New perimeter
adj.
31.12.2004
IFRS
712.8
24.2
17.6
754.6
0.0
0.8
1,781.1
1,781.9
Fin. Assets available for sale (AFS)
1,935.4
60.8
712.7
2,708.9
Fin. Assets held to maturity (HTM)
15.6
0.0
(15.6)
1,209.4
0.0
339.5
Fin. Assets valued at fair value (FV Option)
Amounts owing by banks
0.0
1,548.9
- doubtful loans
0.0
0.0
0.0
0.0
- in bonis loans
1,209.4
0.0
339.5
1,548.9
Customer loans
15,581.0
(47.6)
(3,290.9)
12,242.5
- doubtful loans
372.7
(41.3)
0.0
331.4
- in bonis loans
15,208.3
(6.3)
(3,290.9)
11,911.1
Hedging derivatives
46.3
95.4
0.0
141.7
Tangible assets
311.9
150.3
6.7
468.9
- instrumental assets
268.9
130.7
25.2
424.8
- investment assets
43.0
19.6
(18.5)
44.1
Intangibles assets
304.7
(0.7)
(3.8)
301.6
- goodwill
268.2
(1.1)
0.0
269.3
36.5
(0.4)
(3.8)
32.3
225.7
51.3
22.5
299.5
Partecipating interests in Group companies
45.8
11.3
252.7
309.8
Partecipating interests in affiliated companies
81.9
(9.2)
0.0
72.7
894.1
(5.9)
(72.1)
816.1
21,364.6
332.1
(249.6)
21,447.1
- other intangible assets
Fiscal assets
Other assets
TOTAL ASSETS
20
FTA – Impact on balance sheet
31.12.2004
IFRS adj.
New perimeter
adj.
31.12.2004
IFRS
Trading financial liabilities
1,286.9
0.0
292.1
1,579.0
Fin. Liabilities recognized at amortized cost
17,160.5
97.8
(1,164.3)
16,094.0
Trading derivatives
0.0
31.1
0.0
31.1
Hedging derivatives
10.6
(0.7)
(1.8)
8.1
Provisions for staff severance pay
172.7
23.1
(8.0)
187.8
Provisions for pensions
170.4
7.9
0.0
178.3
83.7
(39.2)
170.5
(3.4)
71.1
Tax provisions and other fiscal liabilities
126.0
Other provisions for risks and charges
77.7
(3.2)
0.0
174.7
0.0
174.7
999.8
20.7
651.8
1,672.3
435.1
(272.8)
20,166.9
(144.9)
23.1
86.8
Put options owned by minority shareholders' of
consolidated companies
Other liabilities
LIABILITIES
20,004.6
Minority interests
208.6
Share capital and share premium
704.0
0.1
0.0
704.4
Revaluation reserves
0.0
39.5
0.0
39.5
FTA reserve
0.0
(23.8)
0.0
(23.8)
345.1
(11.1)
0.2
334.2
Other reserves
Net profit for the period
SHAREHOLDERS' EQUITY + Minority interests
TOTAL LIABILITIES
102.3
37.4
1,151.4
41.9
21,364.6
332.1
(0.6)
0.1
139.1
1,193.4
(249.6)
21
21,447.1
IFRS 1 – Sharehold. equity reconciliation statements 1)
Consob Regulation no. 11971 - Art. 81 bis, paragraph 1b
22
IFRS 1 – Sharehold. equity reconciliation statements 2)
Consob regulations no. 11971 - Art. 81 bis, paragraph 1b
23
IAS/IFRS - Reconciliation Statements 1)
Consob Regulation no. 11971 - Art. 81 bis, paragraph 1a
24
IAS/IFRS - Reconciliation Statements 2)
Consob Regulation no. 11971 - Art. 81 bis, paragraph 1a
25
> Prospetto di riconciliazione dei saldi (art. 81 bis, 1°comma, lettera
a), del regolamento CONSOB): Conto economico
26
27
Customer loans – Evaluation Criteria
 In bonis loans: expected losses (EL) have been estimated on the
basis of PD and LDG of loans residual duration as per the
following criteria:
 40 risk categories: 5 classes x 8 segments
 PD: risk category adjusted – LGD: 18%
 Problem loans: time-discounted recovery value has been
determined as follows
AMOUNT
LOAN RATE AVG. MATURITY
Initial rate
Mortgage loans
0 - 2,500
NON PERFORMING Unsecured loans
LOANS
DOUBTFUL and
RESTRUCTURED
LOANS
with repayment
scheme
without
repayment scheme
2,501 - 15,000
15,001 - 50,000
5.0 years
1.1 year
Initial rate
3.5 years
5.8 years
50,000 - 250,000
7.2 years
> 250,000
7.1 years
Initial rate
as per
expiry date
10 months
27
Weighted
average
6 years
Put Options
 In the consolidated annual report these instruments are classified
as a financial liability. Based on this classification, put options
pertaining to minority interests, have been recorded with a value
equal to the present value of the put options themselves. In the
future, any change in the fair value of the financial liability will be
accounted for in the P&L.
28
Financial assets - HFS
MAIN ADJUSTMENTS TO HFS FINANCIAL ASSETS
Revaluation
Fondiaria-Sai
Depreciation
14.9
CR Forlì
Firenze Parcheggi
(28.6)
2.0
Engineering
(1.7)
Brain Technology
1.1
Sì Holding
2.3
Sanpaolo IMI
34.2
Others
1.0
(0.1)
TOTAL
55.5
-30.4
Net revaluation
25.1
29
2005
INTERIM
TRANSITION
TO
RESULTS
IAS/IFRS
MILANO, Palazzo Mezzanotte - September 15th, 2005