Investor Presentation Italian OBG Programme January 2011 Executive - - PowerPoint PPT Presentation

January 2011

Investor Presentation

Italian OBG Programme

1

The Italian legislation provides a strong framework for investors, fully in line with the most advanced European market standards All the bonds issued under the Programme fully benefit from the provisions and protection granted under the Obbligazioni

Bancarie Garantite Legislation (“Law”) framework, which is based on the Law 130/1999 Italian Securitisation Framework

Executive summary

Banco Popolare is delighted to present its Aaa/ AAA (Moody’s/ Fitch) rated Obbligazioni Bancarie Garantite (OBG) Programme

Banco Popolare Group The OBG programme I talian banking sector overview The Cover Pool

Banco Popolare Group is the 4th Italian Banking group by total assets (€136.4 billion as of 30 September 2010) with a leading

position in the Northern and Central regions of Italy

The Group’s business is focused on Retail Banking, with deep local roots in the North regions of Italy. Banking business is mainly

focused on households, small businesses and medium-sized corporates (SMEs)

Banco Popolare Group has a very solid deposit base, with a loan/deposit ratio of 94% as of 30 September 2010 The Group is rated A2/A-/A- (Moody’s/S&P/Fitch), with outlook negative for Moody’s, S&P and Fitch

Source: Banco Popolare 9M 2010 Report

Significantly less leveraged than the rest of Europe The Northern part of Italy is traditionally the wealthiest area and provides the largest deposit pools 100% prime Italian, first lien, performing residential mortgages Assets have been legally segregated according to the Law Only fully performing loans added to the Cover Pool WA Current LTV: 51.4%, with a WA OLTV of 52.2% Regional Distribution: 68.8% North, 23.5% Center, 7.7% South

2

Banco Popolare’s OBG Programme 2 Banco Popolare Group 8 Funding Strategy and Liquidity Profile 20 The I talian Mortgage Market 25 Banco Popolare’s Mortgage Business 32 Banco Popolare’s Underwriting Policies 37 Cover Pool Description 44

Annex 1: Summary of Programme Events 48 Annex 2: I talian OBG vs. European Covered Bond Framework 51 Annex 3: Additional I nformation on Banco Popolare 53

Table of Contents

3

Summary of the Banco Popolare programme

I ssuer Banco Popolare Societá Cooperativa Guarantor BP Covered Bond S.r.l. a bankruptcy remote, special purpose entity which benefits from segregation principals well established under law 130/ 1999 Security Structure I talian Law-based Covered Bonds (OBG) Substitute Assets Up to 15% Listing/ Denomination Luxembourg Stock Exchange; EUR 50,000 Over-collateralisation Dynamically adjusted via ACT/ I nterest Coverage Test Ratings Aaa / AAA (Moody’s / Fitch ) Asset Monitor Mazars S.p.A. Type of I ssuance Jumbo benchmark size Governing law I talian Arrangers RBS, UBS I nvestment Bank Bondholders Trustee BNP Paribas Risk Weighting 10% Cover Pool Exclusively I talian prime residential mortgages Maximum LTV 80% at inclusion and capped by the Asset Coverage Test (ACT) Originator Banca Popolare di Verona, Banca Popolare di Novara, Credito Bergamasco, Banca Popolare di Lodi, Cassa di Risparmio di Lucca Pisa Livorno

4

Overview of Covered Bond issuance structure

Swap Cash Flows

Mortgage Pool Swap Counterparties

BP Covered Bond S.r.l. (Guarantor) I nvestors (Emittente) I ssuer

Sellers

Covered Bonds Proceeds Guarantee Purchase price Transfer of assets Repayment of subordinated loan Subordinated loan

Covered Bond Swap Counterparties

Swap Cash Flows

5

Name of the instruments

Obbligazioni Bancarie Garantite

Special Supervision

Bank of I taly

Protection against ALM

Yes – Mandatory Test and Voluntary Tests

Compliance with CRD

Yes

Protection against credit risk

Seller may replace, non-eligible, defaulted or non-performing loans

Mandatory over- collateralisation

To be subject to an asset coverage test on a contractual basis

Voluntary over-collateralisation

Yes

Outstanding OBG to regulatory capital

Depending on Tier 1 and total capital ratios. There is no limit as long as the respective bank maintains a total capital ratio above 9% and a tier 1 ratio above 6%

1st claim in the event of insolvency

All payments are received from the special entity's assets. These payments are expected to be collected in a separate account. I nvestors continue to receive scheduled payments, as if the issuer had not defaulted

External support mechanisms

I n the event of insufficient pool assets proceeds to cover their claim, investors rank pari passu with senior debt

• holders. There is a simultaneous unsecured dual claim against the issuer and secured against the portfolio held

by the specially separated entity

Compliant with UCI TS Art. 22 par. 4

Yes

Legislation

Article 7-bis of law 130/ 1999, Ministry of Economy & Finance decree 310 dated 14 December 2006 and Bank of I taly instructions issued on 17 may 2007

Special banking principle

No: any I talian bank fulfilling specific criteria for transfer of Assets and issuance of Covered Bonds

Restriction on business activity

N/ A

Asset Allocation

Cover assets are segregated by Law through the transfer to a separate entity

I nclusion of hedge positions

Hedge position are part of the structural enhancements intended to protect bondholders

I ntegration Assets

Up to 15%

Geographical scope for public assets

EEA states and Switzerland, subject to a maximum risk weighting of 20% Non-EEA states or local authorities subject to a maximum risk weighting of 20% and up to 10% of the pool

Geographical scope for mortgage assets

EEA and Switzerland

LTV barrier residential / commercials

80% / 60%

I talian Covered Bond Legal Framework

6

Bank of I taly OBG requirements

Pursuant to Bank of Italy supervisory regulation (dated 15 May 2007), OBG may only be issued by

banks with:

–

minimum consolidated regulatory capital of € 500mn

–

minimum Total Capital Ratio of 9%

–

minimum Tier 1 Ratio of 6%

In addition the assignment of assets to the cover pool is subject to certain limits based on the bank’s total

capital and Tier 1 ratios:

Up to 60% of the available eligible assets Total Capital Ratio (TCR) ≥ 11% Tier 1 Ratio (T1R) ≥ 7% 10% ≤ TCR < 11% T1R ≥ 6.5% 9% ≤ TCR < 10% T1R ≥ 6% No limits Up to 25% of the available eligible assets

Source: Bank of I taly, Banco Popolare 1 Accounting ratios as of 30/ 06/ 2010

Banco Popolare Ratios1:

• Tier 1: 7.6%
• Total Capital: 10.3%

7

“OC” and ALM Matching Requirements

Note: These pages contain a summary/overview of the Priority of Payments and Tests. For the official wording please refer to the Base Prospectus

Minimum 7.5% “OC”(93% Asset Percentage) adjusted dynamically to protect AAA/Aaa ratings The aggregate outstanding amount of the Cover Pool must be at least equal to the Outstanding Amount of all the OBG issued under the Programme The Net Present Value of the cover pool (net of the SPV general and administrative expenses) including derivatives must beat least equal to the NPV of the

• utstanding Obbligazioni Bancarie Garantite

Asset Coverage Test (ACT) Net Present Value Test I nterest Coverage Test

Interests generated by the cover pool (including derivatives) must be sufficient to cover interest payments under the Obbligazioni Bancarie Garantite

“OC” Test

Mandatory Test (by Law)

8

Banco Popolare’s OBG Programme 2 Banco Popolare Group 8 Funding Strategy and Liquidity Profile 20 The I talian Mortgage Market 25 Banco Popolare’s Mortgage Business 32 Banco Popolare’s Underwriting Policies 37 Cover Pool Description 44

Annex 1: Summary of Programme Events 48 Annex 2: I talian OBG vs. European Covered Bond Framework 51 Annex 3: Additional I nformation on Banco Popolare 53

Table of Contents

9

Banco Popolare Group at a glance

Total assets: €136.4bn; Net customer loans: €96.1bn; Direct customer deposits: €102.1bn; Indirect customer funds: €77.9bn (of which €32.1bn AuM). Core business focused on retail and SME clients (~ 88% of total revenues). Banco Popolare was established on 1°July 2007 from the merger between Banco Popolare di Verona e Novara and Banca Popolare Italiana. Excellent geographical position, with an average branch market share of 10% in the main regions in northern Italy and a deeply rooted network. Today, Banco Popolare is the 1st Italian popolare bank per branch number (2,178) and the 4th largest Italian bank by total assets. Strengthening of the capital position through: €2bn capital increase to be launched in 2011 (to be used also for the repayment of €1.45bn “Tremonti Bonds”); the sale of non-core assets under way; the “soft mandatory” convertible bond issued in March 2010* .

Data as of 30/09/2010 * Tremonti bond issued in July 2009 for a total of €1.45bn and SMCN issued in March 2010 for €1bn.

Turnaround of Banca Popolare di Lodi starting to bear fruit. Banca Italease: re-organization completed and strong acceleration of the de-risking process (NPLs and watchlist loans of the Release portfolio decreased €1.7bn YTD, resulting in a reduction of 46% in the stock).

10

Short term credit rating: A2 Long term credit rating: A- Outlook: Negative Short term credit rating: F-2 Long term credit rating: A- Outlook: Negative Short term credit rating: P-1 Long term credit rating: A2 Outlook: Negative Franchise

BP as a highly systemically important institution to Italy, given its leading franchise in the Northern Italian provinces and its 5.2% market share in national retail deposits as of December 2008

Liquidity

BP's liquidity profile is adequate overall in the context of much tighter access to funding. Deep territorial roots in north and central Italy tap a large and stable pool of customer deposits that covers most financing needs

Capital

We are confident about the positive impact of capital strengthening actions that are in

• progress. As a result, we expect the bank's

core Tier 1 ratio to sustainably exceed 7% by 2011

Asset Quality

BP's management is committed to significantly strengthen the bank's current weak capital position and to address its large exposure to risky real estate operators and leasing loans that originated through agents and intermediaries during the Banca Italease consolidation

Franchise

BP ratings are based on its position as the fourth‐largest bank in Italy, with a strong franchise in some of Italy’s wealthiest regions

Liquidity

BP monitors and controls its liquidity on the basis of a three‐year plan, taking into account expected lending volumes. The volume of securities eligible for European Central Bank (ECB) refinancing is substantial: EUR11bn

Capital

BP’s capitalisation has been affected by a series of one‐off events since 2007 […]. Strengthening capitalisation has been one of the bank’s main objectives and will continue to be central to its strategy

Asset Quality

Fitch considers the high level of net impaired loans […] a key weakness of the bank, but takes comfort from the bank's good record in managing impaired loans. Fitch takes some comfort from the good quality of the collateral backing some of the group's largest impaired exposures

Source of comment excerpts: Moody’s 05-Oct-2010; Fitch 10-May-2010; S&P 26-Mar-2010.

Franchise

Franchise value (C+ ) remains BP's main strength, although under some pressure if banking subsidiaries are sold to raise capital

Liquidity

BP scores worse than its Italian peers in our key liquidity ratio […] partly due to the consolidation of wholesale-funded Italease. The loan to deposit ratio of 93% in June 2010 was satisfactory

Capital

Capital adequacy could be strengthened through the disposal of assets if necessary(the sale of Caripe in October 2010 will add 17bp to CT1).

Asset Quality

The consolidation of Italease in 2009 resulted in the worst level of problem loans in BP's rating peer group. […]The bank's senior management is closely involved in the recovery process and is having some success in recovering Italease's largest positions

Solid ratings

11

Banco Popolare Group risk profile: low structural risks

Business Model Focus on Retail 97% of the core business is domestic. Strong diversification of the loan portfolio, which was

subject to strict valuation rigor and provisioning in 2008.

Alignment of all participations in the merchant banking

portfolio to market values.

No

exposure to the subprime mortgage sector, monoliners, CDOs/CBOs.

No investment in structured credit products. No investment in structured investment products on

market variables.

Low VAR of the trading book: max. about €4.9m in 9M

2010 (holding period = 1 day; confidence interval = 99%) – about €3.8m on 30 September 2010.

No I nvestments in Toxic Assets Low risk in assets Deep local roots in core market territory. Banking business mainly focused on households, small

businesses and medium-sized corporate customers.

Core business accounts for about 93% of total revenues. Loan/Deposit ratio of 0.94 as of 30 September 2010. Funding needs are structurally covered until 2012. Low leverage. RWA/Total Assets ratio of 67% vs. 55% on average in

Italy (and c. 50% on average for European banks).

Sound Balance Sheet Structure and Liquidity Pos.

12

Geographical mix: branch network located mainly in wealthy northern I taly, with strong positioning in attractive areas

Customer loans by geographical area

RoW 1.3% North- West 45.4% North-East 30.0% Centre 16.4% South and Islands 7.0%

(i) All indicated market shares exclude Caripe. (ii) Branch market shares are calculated as of 30 Sept. 2010 and are based on a total of 2,035 domestic branches, of which 1,993 of the Banks of the Territory (excl. 51 branches of Caripe), 36 branches of Banca Aletti, 5 outlets of Efibanca and 1 branch for BP Holding. N.B. Analysis based on Bank of Italy data as at 30/06/2010. Deposit market shares are based on the Bank of Italy’s Statistical Bulletin and hence comprise banks’ fund-raising in the form of deposits (with agreed maturity, sight, overnight and redeemable at notice), savings certificates, CDs, current accounts and repos.

Market share by number of branches

(i) Economically resilient northern Italy accounts for more than 70% of the Group’s branch network (more than 80% including Tuscany) (ii)

Market share by loans and deposits in some

• f the main regions (as at 30/ 09/ 2010)

Group franchise at a glance

• Leading player in the I talian domestic market, mainly

concentrated in the wealthiest regions of Italy, with good market shares in both loans and deposits:

• North West: 7.14% (loans) and 6.23% (deposits)
• North East: 6.85% and 6.43%
• Low-risk retail clients in I taly
• Excellent geographical position:
• average market share by branches in the main regions

equal to 10% and above 10% in 20 provinces

• Franchise quality
• Well-recognized brands in core market regions
• Veneto
• Lombardy
• Emilia Romagna
• Liguria
• Piedmont
• Tuscany

Loans Deposits

=> 15% 2.5%<=X<7.5% 7.5%<=X<15% 1%<=X<2.5% <1%

Branch Market Share:

7.95% 8.17% 7.11% 5.89% 7.92% 7.01% 8.95% 9.96% 6.69% 5.88% 7.39% 7.67%

13

559 379 153 101 96 47 35 100 200 300 400 500 600 UCG ISP MPS UBI BP BPER BPM

ASSETS - €/ bn NET CUSTOMER LOANS - €/ bn DI RECT CUSTOMER FUNDS - €/ bn

(including outstanding bonds)

BRANCHES

Sources: 9M 2010 Reports

9,585 7,669 2,980 2,178 1,899 1,296 782 1,500 3,000 4,500 6,000 7,500 9,000 10,500 12,000 UCG ISP MPS BP UBI BPER BPM 969 677 243 136 132 58 52 200 400 600 800 1,000 1,200 UCG ISP MPS BP UBI BPER BPM 590 435 155 104 102 47 36 100 200 300 400 500 600 700 UCG ISP MPS UBI BP BPER BPM

Benchmarking – Banco Popolare vs. I talian peers

14

Breakdown of Group total revenues (excludes PPA effects)

Focus on core commercial banking business

100% ~ 12% ~ 88%

Total revenues Other businesses Commercial bank Well rooted regional banks, mainly

concentrated in northern Italy

Retail Banking revenues representing 88%

• f total revenues

Domestic leader in 27 provinces The remaining 12% is linked to the Private

and Investment Banking, Asset Management, Leasing, and other businesses

Data as of 30/09/2010

Commercial model based on core banking business

15

HOLDI NG BPV-SGSP CREBERG BP NOVARA BP LODI CR LUPI LI

BP Crema Caripe

Banca ALETTI AGOS DUCATO EFI BANCA ALETTI GESTI ELLE SGR AVI POP Assicurazioni POPOLARE VI TA

Private & Investment Banking Asset Management Consumer Credit JV with Credit Agricole (61% CA, 39% BP) Merchant Banking Non-Life Bancassurance JV with AVIVA (49% BP, 51% AVIVA) Life Bancassurance JV with FONDIARIA-SAI (49% BP, 51% FONSAI)

Network Banks (2,044 branches) Product Companies

(517) (251) (416) (464) (231) # branches indicated in brackets (51) (36) (5) # branches indicated in brackets

BP Cremona

(44) (70)

Data as of 30/09/2010

* Does not include Treasury branches (31 outlets), one branch of Banco Popolare Holding and foreign banking subsidiaries in Croatia (35 branches), Hungary (10 branches), Czech Rep. (7 branches) and AT Leasing (3 branches). On 09/12/2009, Banco Popolare signed an agreement to sell 100% of Banco Popolare Ceska Rep. Sale of 95% stake to Banca Tercas for €228mln finalized on 31/12/2010

BANCA I TALEASE

Leasing company

(6)

Banco Popolare Group structure*

16

2009 - 2010

• SALE OF NON-STRATEGIC PARTECIPATIONS

(disposal of Caripe finalised on 31/12/2010)

• €1.45bn GOVERNMENT BOND (July 2009)
• RESTRUCTURING
• BANCA I TALEASE

FOCUS ON: FOCUS ON:

• CAPI TAL STRENGTHENI NG
• ASSET QUALI TY
• TURNAROUND OF BPL
• NEW BUSI NESS PLAN 2011-2013

(to be presented in 2011).

from 2011

After a phase of restructuring and rationalization, focus on core business

• €1.0bn SMCN (March 2010)
• €2.0bn CAPITAL INCREASE (EGM approval in Dec. 2010)
• LOAN BOOK DE-RISKING
• RETURNED TO GENERATE PROFIT
• COST OF CREDIT RISK UNDER CONTROL
• CORE BANKI NG BUSI NESS

(Households, Small Businesses, Mid-Corporate)

• PROFI TABI LI TY AND EFFI CI ENCY

17

30/ 09/ 2010

Households Other Small Businesses Large Corporate €/bn (average data) Mid Corporate

31/ 12/ 09 30/ 09/ 09

17.2 12.7 28.3 9.8 16.1 5.0 7.7

0.7

16.6 12.3 28.0 10.2 5.6 6.7 15.5

0.5

18.5 17.2 13.6 5.7 30.0 8.0 10.5 + 10.9% + 7.2% + 10.5% + 7.1% + 7.1% + 5.6% + 3.1% + 6.9%

30/ 09/ 10 31/ 12/ 09 30/ 09/ 09 30/ 09/ 10 31/ 12/ 09 30/ 09/ 09 30/ 09/ 10 31/ 12/ 09 30/ 09/ 09 30/ 09/ 10

€/bn 18% 26% 2% 15% 39%

0.7

Banks of Territory (BdT): increase in customer loans by segments (period-end data)

Mortgage loans

Households Small Businesses Mid Corporate Large Corporate

Gross customer loans

• Cust. Loans of BdT by segments

Comments

(period-end data)

Mortgage loans

• Group gross customer loans rose 6.5%

y/y and 4.5% since year-end 2009.

• In particular, Household loans increased

by + 10.9% y/y (+ 7.2% since year-end 2009), while Small Businesses lending grew + 10.5% y/y (+ 7.1% since year-end 2009).

31/ 12/ 09

+ 4.5%

30/ 09/ 10

87.6

26,2 30.5

91.6

32.8

57.1 58.8

30/ 09/ 09

86.0

26,2 29.5

56.5

+ 6.5%

Banco Popolare ‘standalone’

Customer loans: focus on Retail and SMEs

18

The decrease in the coverage of NPLs over 30/06/2010 is influenced by the change in the portfolio mix: positions up to €250,000 registered an increase (mainly residential mortgage loans: + 12% ), which has led to less accounting provisions due to a better collateralization (for these specific positions, the total coverage rose from 91% to 94% ). The watchlists loan portfolio is well fragmented and characterized by a higher accounting coverage on average for positions > €3m (21% ) , whereas for the positions up to €500,000 the coverage is represented to a significant degree by RE collateral, with a total coverage (accounting provisions + RE collateral) of 55%. The stock of restructured loans increased by €96m in Q3, of which €78m related to the suppport plan denominated “SOS famiglie/ Ditte individuali”. The 5 largest positions, which continue to perform in an orderly way, account for 45% of the total. One of these 5 positions, accounting for 13% of the total portfolio, is provisioned against by 15%, plus an additional 29% of real etate collateral solely in favour of our Bank. The increase in Past-Due loans in Q3 2010 brings the stock to €527m, against €392m at 30/06/10, but remains well below the level registered at the end of 2009 (€745m). This increase is related to the specific period of the year clashing with summer months characterized by a lower level of collection activity; October figures are positive, showing a decrease in the stock to about €400m, hence moving back to the level registered in June.

1,483.7 1,803.1 2,058.7 3,189.8 3,414.5 3,284.7 591.7 652.7 686.9 707.1 367.9 495.6

31/ 12/ 2009 30/ 06/ 2010 30/ 09/ 2010

€/m €/m 3,054.8 3,418.9 3,759.4 3,910.6 4,108.7 3,925.0 674.7 722.0 818.5 744.6 392.5 527.1

31/ 12/ 2009 30/ 06/ 2010 30/ 09/ 2010

8,384.7 5,972.4 6,525.9 9,030.0 8,642.1 + 34.3% + 13.4%

• 4.5%

+ 10.0% 6,238.3 + 34.7% + 5.2%

• 3.8%

+ 14.2% + 21.3% + 0.4% + 23.1%

• 29.2%

+ 16.1% + 3.0% + 38.8%

• 29.9%

+ 9.3% + 7.7%

92% including real state

collateral

30/ 09/ 10 30/ 06/ 10 16.3% 16.9% 63.7% 65.8% 6.0% 6.2%

52% including real estate collateral

Comments Gross impaired loans Net impaired loans

% change since YE 2009 % change since YE 2009

NPLs Watchlist Restructured Past due NPLs Watchlist Restructured Past due

Coverage of impaired loans

• NPL coverage:
• Watchlist loan

coverage:

• Coverage
• f ‘Past Due’

N.B.: NPL coverage includes write-offs

Credit quality: impaired loans and coverage ratios

Banco Popolare ‘standalone’

+ 4.5% + 4.6%

19 3.68% 3.82% 4.10% 2.08% 2.32% 3.49% 1.91% 1.75%

0.70% 1.70% 2.70% 3.70% 4.70% Dec-09 Mar-10 Jun-10 Sep-10 Gross NPL ratio Net NPL ratio

4.76% 4.59% 4.29% 4.06% 3.94% 3.71% 4.46% 3.77%

3.00% 3.60% 4.20% 4.80% Dec-09 Mar-10 Jun-10 Sep-10 Gross watchlist ratio Net watchlist ratio

NON-PERFORMI NG LOAN RATI OS WATCHLI ST LOAN RATI OS

Credit quality: ratios

Banco Popolare ‘standalone’

20

Banco Popolare’s OBG Programme 2 Banco Popolare Group 8 Funding Strategy and Liquidity Profile 20 The I talian Mortgage Market 25 Banco Popolare’s Mortgage Business 32 Banco Popolare’s Underwriting Policies 37 Cover Pool Description 44

Annex 1: Summary of Programme Events 48 Annex 2: I talian OBG vs. European Covered Bond Framework 51 Annex 3: Additional I nformation on Banco Popolare 53

Table of Contents

21

Sound balance sheet structure…

Total BP ‘standalone’ direct customer funds

• / w: Direct cust. funds of the Banks of the Territory

€/bn 39,2 41,3 37,9 43,5 47,2 50,1 10,0 8,5 8,8 97,0 96,8 92,7 30/ 09/ 2009 31/ 12/ 2009 30/ 09/ 2010 Core Deposits(1) Bonds and Other Securities Repos + 3.5% + 6.1%

• 8.2%

% chg. 9M 10/ 9M 09

• 12.0%

+ 15.2%

• 3.3%

+ 4.4%

(1) Core deposits include CDs placed with retail customers. (2) ‘Deposits’ include the following liability items under the Bank of Italy accounting scheme: item 20 (Due to Customers), item 30 (Securities issued) and item 50 (Financial liabilities designated at fair value); N.B. Banco Popolare bonds placed with retail customers are accounted for under item 50. (3) Peers include ISP, UCG, MPS, UBI, BPER, BPM and Carige. Data based on latest reported figures as at 30/09/2010.

• 0.2%
• Group direct customer funds broadly in line with year-end 2009,

however significant growth in the Households and Small Business segments (+ 6.2% y/y and + 2.2% since YE 2009).

• Sound funding profile with a L/D ratio of 94% as at Sept. 2010.
• Additional funding buffer from: (i) the portfolio of eligible

securities of €7.2bn (end of September 2010); (ii) the residential mortgage loan portfolio not used for self-securitisations or the covered bond pool for a total of about €2bn.

30/ 09/ 09 30/ 09/ 10 30/ 09/ 09 30/ 09/ 10

66.9 68.3 45.2 48.0 + 2.0% + 6.2%

31/ 12/ 09

69.4

31/ 12/ 09

47.0 + 2.2%

• 1.7%
• / w: households and small

business segments

€/bn

Loan/ Deposit(2) ratios – peer comparison (3) Comments

100% 99% 98% 97% 95% 87% Peer1 Peer2 Peer3 Peer4 Peer5 Peer6

94% BP Group Average: 95%

Peer7 87%

102.1bn including Italease

22

Breakdown of funding sources

Funding sources

Total amount €48.6bn

Group liquidity profile

Banco Popolare Group

Source: ALM, 30 September 2010

Loan to Deposit Ratio historically below 1 €5bn OBG Issuance under OBG Programme €25bn EMTN Program in support of medium / long-term lending strategy

41% 58% 1%

Istitutional Bond Retail Bond ECP/ECD

23

Group debt maturity profile

Source: I nternal management report, 30 September 2010

Institutional Retail

Banco Popolare Group

€/mn €/mn 2.330 2.174 5.429 1.659 1.892 491 498 300 75 502 715 53 50

500 1.000 1.500 2.000 2.500 3.000 3.500 4.000 4.500 5.000 5.500 6.000 6.500 2010 2011 2012 2013 2014 2015 Senior Tier I Upper Tier II Lower Tier II 468 4.813 2.869 4.303 8.054 4.405 140 231 448 113 10 10 36 500 1.000 1.500 2.000 2.500 3.000 3.500 4.000 4.500 5.000 5.500 6.000 6.500 7.000 7.500 8.000 8.500 2010 2011 2012 2013 2014 2015 Senior Tier I Upper Tier I I Lower Tier II Certificates

24

Banco Popolare Group

Sound Liquidity Profile

Portfolio of eligible securities Comments Senior EMTN and Covered bond issues in 2009/2010 Institutional funding maturities in 2010 and 2011 (nominal values)

• The Group’s liquidity position is satisfactory.
• In 2010, the Group’s funding strategy of issues on the wholesale market

continued with:

• €500m EMTN senior bond issue in Jan.;
• €1bn Covered Bonds (under the €5bn programme) in Feb.;
• €500m EMTN senior bond issue in September;
• €0.95bn Covered Bonds in Sep.(€0.8bn) and in Oct.(€0.15bn);
• €1bn Lower Tier 2 issue in Oct.
• In addition, the Group successfully completed the issuance of a €1bn

convertible bond (four-year maturity).

• The strong increase of eligible securities in 2009 derives from the use of
• ther securities issued (about € 6bn) as part of own securitizations, which

shall gradually be substituted by Covered Bonds. The reduction in 2010 is due the unwinding of 2 securitisations (BPL Mortgages 1 & 2), the assets of which have been used for the Covered Bonds. €/bn 31/12/07 31/12/08 3.7 5.5 31/12/09 11.0 01/12/10 7.5 €/bn 1.0 0.35 1.0

+ 165 + 145

• Aug. 09
• Sep. 09
• Oct. 09

€/bn 3 years 0.5

+ 90

• Jan. 10

5 years 2 years 7 years 1.0

+ 80

• Feb. 10

Spread on mid-swap interest rate

Covered Bond +138

0.5

+ 170

• Sep. 10

3 years 5 years 0.95

+ 135

Sep.

• Oct. 10

Covered Bond

• Oct. 10

1.0

+320

10 years

LowerT2

Banco Popolare Banca Italease 1.4 2.8 3.5 2010 2011 1.6

Amounts indicated for FY 2010 were re-imbursed.

25

Banco Popolare’s OBG Programme 2 Banco Popolare Group 8 Funding Strategy and Liquidity Profile 20 The I talian Mortgage Market 25 Banco Popolare’s Mortgage Business 32 Banco Popolare’s Underwriting Policies 37 Cover Pool Description 44

Annex 1: Summary of Programme Events 48 Annex 2: I talian OBG vs. European Covered Bond Framework 51 Annex 3: Additional I nformation on Banco Popolare 53

Table of Contents

26

217 244 266 280 294 264 17.4 8.2 6.2 (0.4) 8.7 12.5 50 100 150 200 250 300 350 Dec-05 Dec-06 Dec-07 Dec-08 Dec-09 May-10 (5) 5 10 15 20 Stock (€bn) Annual growth (% ) Average initial interest rate (% ) 3.87 4.47 5.32 3.68 5.55 3.50 4.00 4.50 5.00 5.50 6.00 Dec-05 Dec-06 Dec-07 Dec-08 Dec-09 Mortgage debt/GDP as at 31 December 2008 (% ) 18.4 37.6 40.0 62.5 10 20 30 40 50 60 70 Italy France Germany Spain Stock as at 30 December 2009 (€bn) 292 724 959 658 200 400 600 800 1,000 Italy France Germany Spain

The I talian loan market

Sources: ECB, Bank of I taly, Agenzia del territorio

Smaller than the average Italian mortgage market (18% of GDP vs 40% Euro Area) Market recovering at good pace in 2010 … with low debt/equity ratio …partly in response to low interest rates

27

0% 2% 4% 6% 8% 2010 2009 2008 2007 2006 2005 2004 2003 2002 Euro Area Italy 0% 15% 30% 45% 2010 2009 2008 2007 2006 2005 2004 2003 2002 Euro Area Italy 30% 40% 50% 60% 2010 2009 2008 2007 2006 2005 2004 2003 2002 Euro Area Italy 40% 60% 80% 100% 120% 2010 2009 2008 2007 2006 2005 2004 2003 2002 Euro Area Italy

The I talian loan market

Sources: ECB, data as of September 2010

Corporate loans/GDP Total loans/GDP Consumer credit/GDP Loans for house purchase/GDP

I taly’s leverage steadily below European peers ratios

28

Second house 14% Investment 9% First house 66% Replacement 11% Annexes 36% Other 19% Residential 45% Indirect Channel 26% Direct Channel Online 1% Indirect Channel Online 5% Direct Channel 68% Floating Rate 48% Fixed Rate 38% Mixed Rate 14%

The I talian loan market in 2009: demand and supply

Sources: Nomisma, press releases 2007–2008–2009

Loan breakdown supply by channel Loan breakdown supply by rate type Residential RE demand breakdown Loan transactions

29

67.9 68.8 70.5 70.4 72.8 66.9 66.3 70.0 71.1 74.0 60 65 70 75 80 North-West North-East Centre South & Islands Italian average 67.9 68.8 70.5 70.4 72.8 66.9 66.3 70.0 74.0 71.1 60 65 70 75 80 North-West North-East Centre South & Islands Italian average

The low indebtedness of I talian households

Loan to value residential transactions (%) % of Mortgage-Financed residential transactions

Source: Bank of Italy Survey-Tecnoborsa

• At year end-2009, household total financial debt stood at 61% of available income, remaining far lower than in the euro area

(95%) or in the UK (150%). The differences are largely attributable to loans for house purchases, representing just 33% of Italian household available income, vs. 59% in the euro area and 93% in the UK

• The low degree of Italian mortgage penetration drives down the ratio of private debt to GDP. In fact, according to the Bank of

Italy on EU-SILC Eurostat figures only 13% of Italian households is currently repaying a mortgage loan versus the around 30%

• bserved in France, Germany and Spain and higher in UK and Netherlands (greater than or equal to 40%)
• The share of home-owners in Italy is quite high : over 80% of households in 2008 vs. 71% in the euro area, 66% in France

and 56% in Germany

30

The housing market in I taly

The dynamics of the loan market is strictly bounded to the residential market developments In 2009 the total deed of sales and purchases registered a negative trend equal to -11,3%. Even if this is still

a negative result, it demonstrates some level of recovery versus the previous year (-15,1%). The trend is driven by a soft house price reduction, also recorded in the size of the loan market

The first quarter of 2010 confirm this positive trend with an increase in the buy and sell market equal to

+ 2.3% versus the same period in 2009 (according to Istat data). This current increase regards especially the residential market (+ 93.2%) versus the commercial one

Moreover the loan market, on the back of residential property buyers, registered a technical recovery at a

national level (+ 13.7% versus the same period in 2009 – according to Istat), with a double digits increase especially in the main cities: Milan + 10.3%, Roma + 15.6%, Florence almost 20%. On a negative trend is just Turin, with a decrease trend of 2,3%

31

Banco Popolare’s OBG Programme 2 Banco Popolare Group 8 Funding Strategy and Liquidity Profile 20 The I talian Mortgage Market 25 Banco Popolare’s Mortgage Business 32 Banco Popolare’s Underwriting Policies 37 Cover Pool Description 44

Annex 1: Summary of Programme Events 48 Annex 2: I talian OBG vs. European Covered Bond Framework 51 Annex 3: Additional I nformation on Banco Popolare 53

Table of Contents

32

Market share trends

Banco Popolare ‘standalone’

Market share in customer deposits * * Market share in customer loans *

31/12/09 Source: Bank of I taly reporting – ABI * Loans: small businesses (producing households), consumer households, non-financial companies. * * Deposits: the system data includes deposits of the postal network. 4.9% 31/12/08 4.5%

+ 40bps

6.30 6.01 6.13 2.25 5.42 5.60 2.09 3.55 3.23 5.86 North East North West Northern Italy Central Southern 2008 2009 + 53bps 31/12/09 4.05% 31/12/08 3.98%

+ 7bps

5.06 5.18 5.13 2.02 5.13 5.03 2.12 3.11 2.94 4.87 + 10bps 2008 2009 North East North West Northern Italy Central Southern

33

Market share of Banco Popolare

Assofin: breakdown by loan scope 8.8%

Evolution of Banco Popolare market share – (Assofin: “Credito Immobiliare erogato alle famiglie consumatrici”)

The “other loans” keeps on growing, and in the 3Q 2010 they become the 30% of the total, compared to the 22% of 2008.

2009

91% 14.4%

Flows paid for other loans (including replacements and substitutions) Flows paid for loan purchase Overall Change (%)

90% 86% 78% 72%

10% 14% 22% 28%

15.4% 6.1% (14.4%) (6.8%)

0% 10% 20% 30% 40% 50% 60% 70% 80% 90% 100% 2006 2007 2008 2009 (25%) (20%) (15%) (10%) (5%) 0% 5% 10% 15% 20%

Breakdown % Growth rate %

8.50% 6.80% 2007 2008 Q3 2010 ~8%

30%

70% 14%

Q3 2010

34

Mortgage: new production and stock

* Real Estate and Land Mortgages to private individuals (excluding Banco Popolare Group employees)

In 2010 Banco Popolare new production is mainly derived from the “internal networks” (98%), which also represents approx 94% of total stock

New production * (data as of 31/12/2010) Stock * (data as of 31/12/2010) Total BP External Networks Internal Networks Volume €/bn 18 16,9 1,1 Total BP External Networks Internal Networks 4,3 4,2 0,1 Volume €/bn

Average Maturity (years) Average mortgage (€/000)

21,3 130 21,2 130 28,5 139 13,7 89 13,2 87 23,9 126

Average Residual Maturity (years) Average Residual Amount (€/000)

+ 9%

• vs. 2009

35

Breakdown of new production and stock by type

* Real Estate and Land Mortgages (excluding External Networks)

Mortgages mainly with floating rates on stock (73% of the total). New production (mainly floating rate products) in 2010 (84% of the total), as a consequence of the declining interest rate environment in that year

Fixed Floating

33% 67%

% nr. mortgages

69% Fixed Floating

32% 68%

% nr. mortgages

New production 2009

New production * - (data as of 31/12/2010) Stock * - (data as of 31/12/2010)

67% 33%

84% 16% 73% 27%

36

Banco Popolare’s OBG Programme 2 Banco Popolare Group 8 Funding Strategy and Liquidity Profile 20 The I talian Mortgage Market 25 Banco Popolare’s Mortgage Business 32 Banco Popolare’s Underwriting Policies 37 Cover Pool Description 44

Annex 1: Summary of Programme Events 48 Annex 2: I talian OBG vs. European Covered Bond Framework 51 Annex 3: Additional I nformation on Banco Popolare 53

Table of Contents

37

Origination and underwriting

Sales force Underwriting Property Valuation Servicing

Banco Popolare performs all of its own servicing through:

• constant dialogue with clients
• advanced monitoring system to supervise the performance of the pool
• dedicated subsidiary to carry out the recovery process of the defaulted loans

All mortgages are originated mainly through banking branches distributed across Italy.

A small percentage is originated through a network of primary real estate agents. The initial Cover Pool includes only mortgages originated through the direct channel

All mortgages are underwritten at branch level The authority that approves the mortgage loan depends mainly on amount requested,

length of the loan and evaluation of the automatic valuation tool “Sco.Pri”)

Underwriting criteria involve scoring and customer limits, with the final decision always

being made by a credit officer

All mortgage properties are assessed by independent appraisers performed by CRIF All evaluations are based on full physical inspection Mortgage properties involve an insurance policy in favour of Banco Popolare

38

Summary of the underwriting process

Closing ATTRIBUTION OF FILE ACCORDING TO LIMITS Depending on the borrower’s (internal rating) and loan’s characteristics and falling within a given category of limit, the file is allocated to the appropriate underwriter for the credit decision Pre-closing procedures:

• Execution of loan & guarantor’s contracts
• Signing of insurance contracts & making
• f insurance payment
• Notarisation of the mortgage contract
• Registration of the property

SANCTIONING Key facts for credit decision

• Debt to income
• Credit Score
• Credit period
• LTV
• Age
• Property appraisal report
• Additional guarantees

DATA COLLECTION AND INPUT Collection of documents from the borrower (financial status & credit performance; as well as property information— location, type) EVALUATION OF TOOL “Sco.Pri” Assessment of borrower’s credit-worthiness via internal model, based on borrower’s and other available information PROPERTY VALUATION Property appraisal performed by CRIF

Source: Banco Popolare

39

The “Sco.Pri” system

“Sco.pri” valuation methodology: high level scheme of the automatic valuation steps

FI NAL RESULT: 4 potential valuations 1 – VALI D APPLI CATI ON (GREEN) 2 – FURTHER ANALYSI S REQUI RED (YELLOW) 3 – HI GH RI SK APPLI CATI ON (ORANGE) 4 – APPLI CATI ON WI TH SEVERE PREJUDI CI AL ELEMENTS (RED) Ordinary sanctioning powers Sanctioning powers increased by one level Sanctioning powers increased by two levels Preliminary checks Financial sustainability checks

Valuation CPC (internal model) Rating (or CBS Score) Expected Loss (PD x LGD)

Upgrading factors Downgrading factors

(* ) check performed on applicant and guarantors

Existence of minimum wage based on Istat poverty threshold Final total indebtedness below 50% of wage “mortgage instalment/ disposable income” ratio below internal threshold

“Adverse credit charges” (* ) NPL on Bank or System database (* ) Arrear (incaglio) on Bank

• r System database (* )

Past due on Bank or System database (* ) Cancelled cheque (* ) Underage applicant Inhibited applicant Bankrupted applicant ”Not to entrust” marked applicant

Other checks

Sever prejudicial elements (* ) Under observation positions (* ) Called positions (* ) Type of applicant Type of mortgage applicant age + mortgage duration equal or above 80 years Lien > 2 Mild prejudicial elements applicant’s total net financial assets > = 50% of mortgage Value of pledged securities (* * ) > = 50% of mortgage

(* * ) if pledged securities > = 100% of mortgage, final result always positive

Check of monthly value (internal model) Checking of counterparty rating Check of expected loss (%) resulting from counterparty PD and weighted average for all credit lines LGD

NOTE the disposable income used for all financial checks takes into consideration the cumulated income of applicant and potential loan guarantor. Loan guarantor income not

considered if there are prejudicial elements, negative rating (or negative CBS Score if without rating), or it’s not a relative of the applicant

40

Appraisal process of mortgage properties

Appraisal process before 2008: for mortgages of over €175,000, properties were assessed by

independent appraisers, managed by the Special Purpose Loans Group – Appraisals Office

The external appraiser sent a copy of the valuation to the Appraisals Office and to the proposing branch. The

branch sent the valuation together with the notary report to the Special Purpose Loans Group to complete the appraisal process

Appraisal of mortgage properties were required regardless of the amount if property were located outside the

territorial competencies of the branch, or other’s mortgage were already in place or for multiple properties

Appraisal process after January 2008: obligation to perform an appraisal process regardless of the

amount

All real estate appraisal are assigned to the “Evaluation Building” department of CRIF, which comprises

independent appraisers which use standardised and certified evaluation criteria. Key data and information from the appraisal are also used to perform periodic revaluation of the collateral

CRIF guarantees the appraisal values and is economically responsible for the evaluations provided The report received from CRIF is sent to the Special Purpose Loans Group to complete the mortgage request

process

41

Approving powers in the underwriting process

In the following table an example with the approving powers of the different competent bodies for one Bank

• f the Group

Committees and Management (EUR)

Board of Directors Over 30,000,000 Executive Committee Up to 30,000,000 Credit Committee Up to 20,000,000 Chief Executive Officer Up to 15,000,000 General Manager Up to 6,000,000

Credit Up to 8,000,000 Business Area Up to 2,500,000 Branches (excluding the London Branch) Up to 275,000

42

Servicing and delinquency management process

Source: Banco Popolare

Timing Actions

1st reminder letter Branch contact 2nd reminder letter Telephone contact 3rd day before the end of the month of the missed payment During the month from the missed payment

3rd day before the end of the month of the missed payment

During the following 15 days after the second missed payment For 30 days from the missed payment

Performed by

Automatic procedure

Automatic procedure Internal call centre Branch First unpaid (0 – 30 dd)

For 60 days from the missed payment

2nd missed payments (30 – 60 dd) 3rd missed payments (60 – 90 dd)

From 150 days to 180 days from the first missed payment At the missed payment for 15 dd

Head of Credit Dpt.

Returning to performing or transfer to Arrear/NPL

External recovery company 1

Status to arrear (incaglio) Branch contact

4th missed payment (90 – 120 dd) 6th missed payment (150 – 180 dd) Branch

Direct contact domicile 3rd reminder letter In the last 10 days of the calendar month of the 3rd missed payment

Branch

Following the Arrear Department valuation for 75 dd

External recovery company 2

Direct contact at domicile At the missed payment

9th missed payment (240 dd)

Proposal to NPL status Automatic procedure

Arrears dpt (incagli) -centralised (Area or head office) Partial promise to pay (150 – 180 dd)

43

Banco Popolare’s OBG Programme 2 Banco Popolare Group 8 Funding Strategy and Liquidity Profile 20 The I talian Mortgage Market 25 Banco Popolare’s Mortgage Business 32 Banco Popolare’s Underwriting Policies 37 Cover Pool Description 44

Annex 1: Summary of Programme Events 48 Annex 2: I talian OBG vs. European Covered Bond Framework 51 Annex 3: Additional I nformation on Banco Popolare 53

Table of Contents

44

Cover Pool Highlights

Current loan balance (EUR) Original LTV (%) Current LTV (%)

Balance (€) 4,623,894,888 Number of loans 45,086 Average loan balance (€) 102,557 WA seasoning (years) 2.17 WA remaining term (years) 19.38 Number of borrowers 44,975 WA CLTV 52.18% Percentage of floating rate mortgages 74.75% WA interest rate on floating rate loans (% ) 2.06% WA margin on floating rate loans (bps) 122.9 WA interest rate on fixed rate loans (% ) 5.32% Figures refer to volume of outstanding mortgages – Data as of 30 November 2010 7,27% 25,07% 28,88% 17,49% 13,30% 3,84% 1,73% 2,42% <50k 50k - 100k 100k - 150k 150k - 200k 200k - 300k 300k - 400k 400k - 500k >500k 0,30% 2,94% 6,92% 10,66% 13,54% 14,71% 18,10% 29,96% 2,50% 0,29% 0,08% <10 10 - 20 20 - 30 30 - 40 40 - 50 50 - 60 60 - 70 70 - 80 80 - 90 90 - 100 >100 1,06% 5,30% 9,24% 12,55% 14,39% 15,68% 19,21% 22,58% <10 10 - 20 20 - 30 30 - 40 40 - 50 50 - 60 60 - 70 70 - 80

45

Cover Pool Highlights

Base index for floating rate loans (%) Current interest rates (%) Interest rate on fixed rate loans (%) Margin on floating rate loans (bp)

Figures refer to volume of outstanding mortgages – Data as of 30 November 2010 0,67% 1,57% 6,97% 7,92% 5,42% 2,17% 0,50% 0,04% <4.0 4.0 - 4.5 4.5 - 5.0 5.0 - 5.5 5.5 - 6.0 6.0 - 6.5 6.0 - 6.5 >7.0 0,10% 2,13% 26,00% 19,21% 14,53% 5,80% 6,38% 0,27% 0,22% 0,10% <50 50 - 75 75 - 100 100 - 125 125 - 150 150 - 175 175 - 200 200 - 225 225 - 250 >250 Euribor 3m 30,97% Euribor 6m 2,03% Euribor 1m 67% 38,56% 25,99% 9,47% 0,58% 0,59% 1,60% 7,00% 7,96% 5,49% 2,22% 0,50% 0,04% <2.0 2.0 - 2.5 2.5 - 3.0 3.0 - 3.5 3.5 - 4.0 4.0 - 4.5 4.5 - 5.0 5.0 - 5.5 5.5 - 6.0 6.0 - 6.5 6.5 - 7.0 >7.0

46

Cover Pool Highlights

Geographical distribution (% ) Regional distribution (%) Remaining term (years) Loan seasoning (years)

Figures refer to volume of outstanding mortgages – Data as of 30 November 2010

0,03% 0,08% 2,72% 13,66% 0,59% 8,30% 7,24% 0,16% 0,30% 7,52% 0,57% 0,38% 3,62% 14,37% 0,71% 0,71% 0,31% 13,09% 25,63% Basilicata Calabria Campania Emilia Romagna Friuli Venezia Giulia Lazio Liguria Lombardia Marche Molise Piemonte Puglia Sardegna Sicilia Toscana Trentino Alto Adige Umbria Valle d'Aosta Veneto

North 68,76% South & Isles 7,69% Centre 23,54%

6,96% 10,16% 8,86% 2,26% 6,16% 65,60% 1yr - 2yr 2yr - 3yr 3yr - 4yr 4yr - 5yr 5yr - 6yr >6yr 2,19% 11,90% 17,81% 23,03% 18,86% 24,94% 1,27% <5yr 5yr - 10yr 10yr - 15yr 15yr - 20yr 20yr - 25yr 25yr - 30yr >30yr

47

Banco Popolare’s OBG Programme 2 Banco Popolare Group 8 Funding Strategy and Liquidity Profile 20 The I talian Mortgage Market 25 Banco Popolare’s Mortgage Business 32 Banco Popolare’s Underwriting Policies 37 Cover Pool Description 44

Annex 1: Summary of Programme Events 48 Annex 2: I talian OBG vs. European Covered Bond Framework 51 Annex 3: Additional I nformation on Banco Popolare 53

Table of Contents

48

I ssuer Event of Default

I ssuer event

• f default

Enforcement of the CB Guarantee Failure for a period of 7 days or more to pay any principal or redemption amount or any interest

• n the Covered Bond of any series or tranche when due for a period of more of 14 days

Breach of any material obligations under or in respect of the covered bonds or any of the

transaction documents to which it is a party and such failure remains unremedied for 30 days after the representative of the covered bondholders has given written notice

Following the delivery of a breach of test notice, the tests are not cured within 30 days The pre-maturity test is breached on a pre-maturity test date falling within 12 months prior to

the maturity date and the breach has not been cured before the earlier of (i) 15 business days from the date that the issuer is notified of the breach of the pre-maturity test and (ii) the maturity date

An insolvency event of the issuer An article 74 (Italian banking act) event The representative of the covered bondholders will serve a notice to pay on the issuer and

guarantor stating that an issuer event of default has occurred

Upon the service of a notice to pay: –

each series or tranche of covered bonds will accelerate against the issuer and they will rank pari passu amongst themselves against the issuer

–

the guarantor will pay any amounts due under the covered bonds on the due for payment date in accordance with the provisions of the covered bond guarantee

–

the mandatory tests shall continue to be applied and the amortisation test shall be also applied

–

The Guarantor shall (only if necessary in order to effect timely due payments under the Covered Bonds), direct each Servicer to sell the Receivables respectively assigned by in accordance with the provisions of the Cover Pool Administration Agreement

Note: These pages contain a summary/overview of the Priority of Payments and Tests. For the official wording please refer to the Base Prospectus

49

Guarantor Event of Default

Guarantor event of default Acceleration notice Failure by the guarantor for a period of 7 days or more to pay any principal or redemption

amounts of principal, and/or for a period of 14 days or more to pay any amounts of interest, due for payment in respect of the covered bonds

Breach of the amortisation test Breach by the guarantor of any material obligations under or in respect of the covered bonds or

any of the transaction documents to which it is a party, with such failure remaining unremedied for 30 days after the Representative of the Covered Bondholders has given written notice thereof to the issuer

An insolvency event of the guarantor The Representative of the Covered Bondholders shall serve a notice on the guarantor that a

guarantor event of default has occurred, unless an extraordinary resolution is passed resolving

• therwise

Upon the service of the acceleration notice, all covered bonds will become immediately due and

payable by the guarantor at their early redemption amount, together with any accrued interest and they will rank pari passu amongst themselves

Note: These pages contain a summary/overview of the Priority of Payments and Tests. For the official wording please refer to the Base Prospectus

50

Banco Popolare’s OBG Programme 2 Banco Popolare Group 8 Funding Strategy and Liquidity Profile 20 The I talian Mortgage Market 25 Banco Popolare’s Mortgage Business 32 Banco Popolare’s Underwriting Policies 37 Cover Pool Description 44

Annex 1: Summary of Programme Events 48 Annex 2: I talian OBG vs. European Covered Bond Framework 51 Annex 3: Additional I nformation on Banco Popolare 53

Table of Contents

51

Name of debt I nstrument Special Banking Principle Supervision Substitute Collateral Protection Against Mismatching Mandatory over- collateralisation Voluntary over- collateralisation is protected Fulfils UCI TS 22(4) Italy Obbligazioni bancarie garantite (OBG) No Bank of Italy Up to 15% Net-present value cover required No Yes Yes Obligations Foncières (OF) Yes Commission Bancaire and special supervisor Up to 15% Not compulsory; but all OFs benefit from additional contractual features No Yes Yes Germany Hypothekenpfand-briefe, Öffentliche Pfandbriefe, Schiffspfandbriefe No Bundesanstalt für Finanz- dienstleistungsaufsicht and independent trustee Up to 10% Net-present value cover required 102% Yes Yes Cédulas Hipotecarias (CH) 125% (CH) No Banco de Espana Not applicable Coverage by nominal value Yes Yes Spain Cédulas Territoriales (CT) 143% (CT) Obligations de financement de l’ habitat (OFH) Yes Commission Bancaire and special supervisor Up to 15% Not compulsory; but OFHs also benefit from additional contractual features like OFs No Yes Yes French Structured Covered Bond No Commission Bancaire and special supervisor Up to 15% Contractual obligation to neutralise interest and currency

• risk. Also, downgrade triggers

for swap counterparties and different tests to ensure adequate cash flows Subject to asset coverage test Yes T.B.D. Netherlands Dutch Covered Bonds No De Nederlandsche Bank and independent auditor Up to 10% Exposure to interest rate and currency risk is neutralised. In addition, downgrade triggers for swap counterparties, and various tests ensure cash-flow adequacy Subject to asset coverage test Yes From 1 July 2008

• nwards

Portugal Obrigações Hipotecárias , Obrigações sector público Optional Banco de Portugal Up to 20% Net-present value cover required; in addition, limitation

• f liquidity risk

105% Yes Yes France

European Overview on Covered Bond Framework

52

Banco Popolare’s OBG Programme 2 Banco Popolare Group 8 Funding Strategy and Liquidity Profile 20 The I talian Mortgage Market 25 Banco Popolare’s Mortgage Business 32 Banco Popolare’s Underwriting Policies 37 Cover Pool Description 44

Annex 1: Summary of Programme Events 48 Annex 2: I talian OBG vs. European Covered Bond Framework 51 Annex 3: Additional I nformation on Banco Popolare 53

Table of Contents

53

P&L highlights

BP Standalone results

Net income reaches €275m at

30/09/10 up 43% y/y.

Net interest income decreases

6.6% y/y mainly driven by the trend in the euribor rates.

Net commissions up 8.5% y/y. Net financial income up 54.3%

y/y.

Operating costs fall 2.0% y/y. Cost of credit risk remains under

control and stands at 76bps (annualised).

2,800.1 2,775.6 2,638.4 1,398.5 1,369.2 1,466.8 956.8 947.5 873.4 398.3 400.2 259.4 (1,798.4) (1,733,8) (1,768.9) 357.0 490.1 491.7 105.7 (221.4) (262.4) 1,001.7 1,041.8 869.6 (608.4) (520.0) (436.9) 467.1 274.7 192.3

BP Standalone BP Standalone Group

30/09/10 30/09/09

TOTAL REVENUES:

• /w: net interest income
• /w: net commissions
• /w: net financial result

OPERATI NG COSTS PROFI T FROM OPERATI ONS Net Write-downs on impairment of loans I NCOME BEFORE TAXES Taxes on income NET I NCOME OF THE GROUP €/ m

9M 2010 Group’s results are not directly comparable with 9M 2009 figures, considering that Banca Italease is consolidated starting only from 1 July 2009.

54

Note: Nine-month 2010 results are not directly comparable with 9M 2009 figures, considering that Banca I talease entered into the Group’s scope of consolidation only starting from 1 July 2009.

Group consolidated net income reaches €467.1m in 9M 2010; this result is influenced by various extraordinary items (detailed on Slide 9): Net income of Banco Popolare ‘standalone’: + €274.7m Net contribution of Banca I talease: + €192.3m (-€9.1m excluding - €84.4m of PPA and

+ €285.8m of deferred tax assets)

‘Normalised’ Group net income (net of Fair Value Option, PPA, write-downs on treasury securities and deferred tax assets) comes in at €260.3m. Commercial performance of the branch franchise:

• Household mortgage loans (granted):

+ 15% y/ y

• Personal loans:

+ 13% y/ y

• Financing to snall businesses:

+ 15% y/ y

• I nvestment products: + 10% y/ y

Good progress in the turnaround of Banca Popolare di Lodi: net income of + €60.2m in 9M 2010. Derisking process of Banca I talease well on track: the aggregate amount of NPLs and watchlist loans of the Release portfolio decreased €1.7bn YTD, resulting in a reduction of 46% in the stock (from €3.65bn at year-end 2009 to €1.97bn as at 30 September 2010).

Highlights: Banco Popolare Group results

55

9M 2010 Reclassified income statement - €/ m Banco Popolare Group (PPA line-by-line) Banco Popolare (standalone) Banca I talease PPA I talease Net interest income 1,367.3 1,369.2 59.4 (61.3) Profit (loss) on equity investments carried at equity 31.1 35.6 (4.4) Net interest, dividend and similar income 1,398.5 1,404.8 54.9 (61.3) Net commissions 956.8 947.5 9.2 Other revenues 46.6 23.0 23.6 Net financial income 398.2 400.2 4.4 (6.4) Other operating income 1,401.5 1,370.8 37.1 (6.4) Total income 2,800.0 2,775.6 92.1 (67.7) Personnel expenses (1,124.6) (1,098.4) (26.2)

• Other administrative expenses

(577.3) (547.1) (30.2)

• Amortization and depreciation

(96.5) (88.3) (8.2)

• Operating costs

(1,798.4) (1,733.8) (64.6)

• Profit from operations

1,001.6 1,041.8 27.5 (67.7) Net write-downs on impairment of loans, guarantees and commitments (608.2) (520.0) (88.3)

• Net write-downs on impairment of other financial transactions

(35.2) (35.9) 0.7

• Net provisions for risks and charges

(12.8) (1.4) (11.3)

• Impairment of goodwill and equity investments

(0.8) (0.8) (0.0)

• Profit (loss) on disposal of equity and other investments

12.5 6.5 33.8 (27.9) I ncome before tax from continuing operations 357.0 490.1 (37.6) (95.6) Tax on income from continuing operations 105.7 (221.4) 296.2 30.9 Income (Loss) after tax from non-current assets held for sale 17.4 16.0 21.8 (20.3) Minority interest (12.9) (9.9) (3.7) 0.7 Net income for the period 467.1 274.7 276.7 (84.4) 9M 2010

Consolidated 9M 2010 income statement: breakdown

€192.3m

Banco Popolare Group

56

Reclassified income statement - €/ m 9M 2010 9M 2009 9M 2010 9M 2009 Net interest income 1,367.3 1,481.6 1,540.9 1,626.6 Profit (loss) on equity investments carried at equity 31.1 57.4 31.1 57.4 Net interest, dividend and similar income 1,398.5 1,539.0 1,572.1 1,684.0 Net commissions 956.8 877.5 956.8 877.5 Other revenues 46.6 170.4 76.6 10.0 Net financial income 398.3 202.2 404.7 259.3 Other operating income 1,401.7 1,250.1 1,438.1 1,146.8 Total income 2,800.1 2,789.1 3,010.1 2,830.7 Personnel expenses (1,124.6) (1,095.2) (1,124.6) (1,095.2) Other administrative expenses (577.3) (581.5) (577.3) (581.5) Amortization and depreciation (96.5) (116.3) (93.4) (113.2) Operating costs (1,798.4) (1,793.0) (1,795.3) (1,789.9) Profit from operations 1,001.7 996.1 1,214.8 1,040.8 Net write-downs on impairment of loans, guarantees and commitmen (608.4) (485.9) (608.4) (485.9) Net write-downs on impairment of other financial transactions (35.2) (16.7) (35.2) (16.7) Net provisions for risks and charges (12.8) (36.0) (12.8) (36.0) Impairment of goodwill and equity investments (0.8) (3.1) (0.8) (3.1) Profit (loss) on disposal of equity and other investments 12.5 115.0 45.9 117.2 I ncome before tax from continuing operations 357.0 569.5 603.5 616.4 Tax on income from continuing operations 105.7 (230.8) 26.3 (309.1) Income (Loss) after tax from non-current assets held for sale 17.4 (26.5) 43.4 (20.9) Minority interest (12.9) 4.2 (20.3) (10.9) Net income for the period excluding PPA 467.1 316.4 652.9 275.6 PPA impact after tax

• (185.8)

40.9 Net income for the period including PPA 467.1 316.4 467.1 316.4 I NCLUDI NG PPA line-by-line EXCLUDI NG PPA line-by-line

Consolidated 9M 2010 income statement: accounting data

The two sets of results are not directly comparable considering that Banca Italease Group is consolidated starting only from 1 July 2009. Of which PPA ex-BPI: (101.5) Of which PPA Italease: (84.4)

Banco Popolare Group

57

Relevant impacts on the P&L in 9M 2010

9 months 2010

Of which:

Pre-tax Post-tax 261.1 176.7

€/m 285.8 285.8

• 103.3
• 69.9

157.8 106.8

Q1 2010

19.3 13.0

• 13.2
• 9.0

6.1 4.0 Q2 2010

239.7 162.2 285.8 285.8

• 103.7
• 70.2

136.0 92.0 Q3 2010

2.1 1.5 + 13.6 + 9.3

15.7 10.8

Gross cumulative FVO at 30/09/2010 amounts to + €284.8m, of which + €23.7m are the residual part of 2009.

FAI R VALUE OPTI ON DEFERRED TAX ASSETS WRI TE-DOWNS ON GOVERNMENT BOND PORTFOLI O

(Income statement item: Income taxes) (Income statement item: Net financial income) (Income statement item: Net financial income)

Total impact on Net Financial I ncome

Tax credits resulting from the entry of Banca Italease into the consolidated fiscal perimeter of Banco Popolare Group.

Pre-tax Pre-tax Pre-tax Post-tax Post-tax Post-tax

Banco Popolare Group

58 Reclassified income statement - €/m Accounting data PPA (ex-BPI + BIL) Accounting data excluding PPA Fair Value Option Write-downs

• n

Government securities Deferred tax assets Normalized Income statement excluding Net interest income 1.367,3 (173,6) 1.540,9

• 1.540,9

Profit (loss) on equity investments carried at equity 31,1 31,1

• 31,1

Net interest, dividend and similar income 1.398,5 (173,6) 1.572,1

• 1.572,1

Net commissions 956,8 956,8

• 956,8

Other revenues 46,6 (30,0) 76,6

• 76,6

Net financial income 398,3 (6,4) 404,7 261,1 (103,3) 246,9 Other operating income 1.401,7 (36,4) 1.438,1 261,1 (103,3) 1.280,3 Total income 2.800,1 (210,0) 3.010,1 261,1 (103,3) 2.852,3 Personnel expenses (1.124,6) (1.124,6)

• (1.124,6)

Other administrative expenses (577,3) (577,3)

• (577,3)

Amortization and depreciation (96,5) (3,0) (93,4)

• (93,4)

Operating costs (1.798,4) (3,0) (1.795,3)

• (1.795,3)

Profit from operations 1.001,7 (213,0) 1.214,8 261,1 (103,3) 1.057,0 Net w rite-dow ns on impairment of loans, guarantees and commitments (608,4) (608,4)

• (608,4)

Net w rite-dow ns on impairment of other financial transactions (35,2) (35,2)

• (35,2)

Net provisions for risks and charges (12,8) (12,8)

• (12,8)

Impairment of goodw ill and equity investments (0,8) (0,8)

• (0,8)

Profit (loss) on disposal of equity and other investments 12,5 (33,5) 45,9

• 45,9

Income before tax from continuing operations 357,0 (246,5) 603,5 261,1 (103,3) 445,7 Tax on income from continuing operations 105,7 79,4 26,3 (84,4) 33,4 285,8 (208,5) Income (Loss) after tax from non-current assets held for sale 17,4 (26,1) 43,4 43,4 Minority interest (12,9) 7,4 (20,3) (20,3) Net income for the period 467,1 (185,8) 652,9 176,7 (69,9) 285,8 260,3

Consolidated 9m 2010 ‘normalized’ income statement

In the fourth quarter of 2010, the PPA impact is expected to be about -€34m. On an annual basis, the PPA impact is expected to decrease to about -€107m in 2011, to about -€47m in 2012 and to about -€27m in 2013.

Banco Popolare Group

59

Highlights: ‘standalone’ results

Net income reaches €275m at 30/ 09/ 2010; ‘normalized’ net income comes in at €269m. Net interest income decreases 6.6% y/ y and is down slightly q/ q (-1.4% ). Net commissions reach €947.5m, with a growth of 8.5% y/ y and a decrease of 3.7% q/ q, but in any case showing a healthy growth of 7.7% over Q3 2009. Net financial income reaches €400.4m. Excluding the impact of the FVO (+ €261.1m), temporary write- downs on the Government securities portfolio and related derivatives (-€103.3m) and commercial transactions (-€22.6m), it amounts to €265.2m, thanks also to the positive contribution of Banca Aletti (+ €193.8m). Operating costs fall 2.0% y/ y and increase 0.8% q/ q; in particular:

• Personnel costs rise 1.6% y/ y and 1.4% q/ q; excluding €8.9m of severance costs, they

increase only 0.8% y/ y, while decreasing 1.1% q/ q.

• Non-personnel expenses fall 7.7% y/ y and increase 1.2% q/ q.

Cost of credit risk: 76bps in the first 9 months of 2010 (annualised).

Banco Popolare ‘standalone’

60

Reclassified income statement - €/ m 9M 2010 9M 2009 % Chg. 9M 2010 9M 2009 % Chg. Net interest income 1,369.2 1,466.8 (6.6%) 1,481.5 1,579.7 (6.2%) Profit (loss) on equity investments carried at equity 35.6 57.4 (38.0%) 35.6 57.4 (38.0%) Net interest, dividend and similar income 1,404.8 1,524.1 (7.8%) 1,517.1 1,637.1 (7.3%) Net commissions 947.5 873.4 8.5% 947.5 873.4 8.5% Other revenues 23.0 (18.5) n.a. 53.0 12.5 324.0% Net financial income 400.2 259.4 54.3% 400.2 259.4 54.3% Other operating income 1,370.8 1,114.3 23.0% 1,400.8 1,145.4 22.3% Total income 2,775.6 2,638.4 5.2% 2,917.9 2,782.5 4.9% Personnel expenses (1,098.4) (1,080.6) 1.6% (1,098.4) (1,080.6) 1.6% Other administrative expenses (547.1) (574.6) (4.8%) (547.1) (574.6) (4.8%) Amortization and depreciation (88.3) (113.7) (22.3%) (85.3) (110.6) (22.9%) Operating costs (1,733.8) (1,768.9) (2.0%) (1,730.8) (1,765.8) (2.0%) Profit from operations 1,041.8 869.6 19.8% 1,187.1 1,016.7 16.8% Net write-downs on impairment of loans, guarantees and commitment (520.0) (436.9) 19.0% (520.0) (436.9) 19.0% Net write-downs on impairment of other financial transactions (35.9) (16.7) 115.5% (35.9) (16.7) 115.5% Net provisions for risks and charges (1.4) (34.7) (96.0%) (1.4) (34.7) (96.0%) Impairment of goodwill and equity investments (0.8) (3.1) (73.4%) (0.8) (3.1) (73.4%) Profit (loss) on disposal of equity and other investments 6.5 113.6 (94.3%) 12.1 115.8 (89.6%) I ncome before tax from continuing operations 490.1 491.7 (0.3%) 641.1 641.0 0.0% Tax on income from continuing operations (221.4) (262.4) (15.6%) (269.9) (312.0) (13.5%) Income (Loss) after tax from non-current assets held for sale 16.0 (32.1) n.a. 21.7 (26.5) n.a. Minority interest (9.9) (4.9) 102.3% (16.6) (12.6) 32.2% Net income for the period excluding PPA 376.2 290.0 0.3 PPA impact after tax

• (101.5)

(97.7) 0.0 Net income for the period including PPA 274.7 192.3 42.9% 274.7 192.3 42.9% I ncluding PPA line-by-line Excluding PPA line-by-line

‘Standalone’ 9m 2010 income statement: accounting data

Net Financial Income for the first 9 months of 2009 was negatively influenced by the FVO (-€333.3m) and benefited from a capital gain of about €120m deriving from interest rate hedging positions. Furthermore, the nine-month 2009 results benefited from income from the disposal of equity & other investments for a total of €115.0m, of which €106.5m related to the Eracle real estate Fund. Memo 2009

Banco Popolare ‘standalone’

61

Reclassified income statement - €/m Accounting data PPA (ex-BPI + BIL) Accounting data excluding PPA Fair Value Option Write-downs on Government bonds portfolio Normalized Income statement excluding PPA Net interest income 1,369.2 (112.3) 1,481.5

• 1,481.5
• Profit (loss) on equity investments carried at equity

35.6 35.6

• 35.6

Net interest, dividend and similar income 1,404.8 (112.3) 1,517.1

• 1,517.1

Net commissions 947.5 947.5

• 947.5

Other revenues 23.0 (30.0) 53.0

• 53.0

Net financial income 400.2 400.2 261.1 (103.3) 242.4 Other operating income 1,370.8 (30.0) 1,400.8 261.1 (103.3) 1,243.0 Total income 2,775.6 (142.3) 2,917.9 261.1 (103.3) 2,760.1 Personnel expenses (1,098.4) (1,098.4)

• (1,098.4)

Other administrative expenses (547.1) (547.1)

• (547.1)

Amortization and depreciation (88.3) (3.0) (85.3)

• (85.3)

Operating costs (1,733.8) (3.0) (1,730.8)

• (1,730.8)

Profit from operations 1,041.8 (145.3) 1,187.1 261.1 (103.3) 1,029.3 , Net w rite-dow ns on impairment of loans, guarantees and commitments (520.0) (520.0)

• (520.0)

Net w rite-dow ns on impairment of other financial transactions (35.9) (35.9)

• (35.9)

Net provisions for risks and charges (1.4) (1.4)

• (1.4)

Impairment of goodw ill and equity investments (0.8) (0.8)

• (0.8)

Profit (loss) on disposal of equity and other investments 6.5 (5.6) 12.1

• 12.1

Income before tax from continuing operations 490.1 (150.9) 641.1 261.1 (103.3) 483.3 Tax on income from continuing operations (221.4) 48.5 (269.9) (84.4) 33.4 (218.9) Income (Loss) after tax from non-current assets held for sale 16.0 (5.7) 21.7

• 21.7

Minority interest (9.9) 6.7 (16.6) (0.1) (16.6) Net income for the period 274.7 (101.5) 376.2 176.6 (69.9) 269.5

‘Standalone’ 9M 2010 ‘normalized’ income statement

In the fourth quarter of 2010, the PPA impact is expected to be about -€22m. On an annual basis, the PPA impact is expected to decrease to about -€75m in 2011, to about -€31m in 2012 and to about -€19m in 2013. Change in the bank’s

• wn creditworthiness.

Banco Popolare ‘standalone’

62

30/06/10 Accounting Ratios Disposal of Factorit & Caripe Capital increase of € 2bn (approved on 14.12.10) Tremonti Bond redemption for € 1.45bn 30/06/10 Pro forma Ratios

6.1% 7.6% 10.3% + 31bps + 216bps

• 155bps

7.0% 8.5% 11.2% Pro-forma ratios do not include: possible conversion of SMCN (max. + 110 bps on Core Tier 1 ratio)* benefits from possible disposal of other non-core assets

Disposal of Factorit finalized on 29/7/10. Disposal of Caripe finalized on 31/12/10. Reduction of RWA due to the disposal of Factorit (€1.9bn) and Caripe (€ 0.9bn)

RWA: € 92.7bn

Core Tier 1 Tier 1 Total capital

* The €1.0bn ‘Soft Mandatory’ convertible notes, issued at the end of March 2010, are convertible after 18 months after the issue date, both at the request of the bondholders and of the issuer.

(approved on 11/12/2010 by the EGM)

Capital adequacy ratios

Banco Popolare Group

63 Banco Popolare Banco Popolare 91.4% NewCo Due Net cust. loans (* * ): €4.8 bn BPER, BPS, BPM BPER, BPS, BPM 67.2% NewCo Uno gross impaired loans: 20.0% BPER, BPS, BPM BPER, BPS, BPM Banca I talease I mpieghi Lordi: € 20,8mld Banca I talease I mpieghi Lordi: € 20,8mld Banco Popolare Banco Popolare

Reorganisation

Banca I talease I mpieghi lordi: € 9,9mld Banco Popolare Banco Popolare NewCo 1: Release NewCo 2: Alba BPER, BPS, BPM BPER, BPS, BPM 80.0% (* ) €3.9 bn BPER, BPS, BPM BPER, BPS, BPM Banca I talease I mpieghi Lordi: € 20,8mld Banca I talease Net customer loans: €17.2 bn Banco Popolare Banco Popolare 88.1% Post PTO Banca I talease Net customer loans: €7.0 bn

* Participation held by Banca Italease in NewCo 1 post conferments and after the company’s share capital increase. * * Includes (i) the conferment of a credit portfolio of € 2.4bn and (ii) loan securitisations for a total of €2.4 bn. * * * The figures in brackets indicate the receivables portfolio (leasing+ mortgages) as at 30 September 2010.

Banca Italease POST- conferments + NewCo1

consolidated on a line- by-line basis

The 32.8% stake in NewCo 2 consolidated

with the equity method

POST-conferments PRE-conferments

Starting from 31 Dec. 2009

• / w:

net impaired loans: €3.0 bn 32.8%

• / w:

€1.5 bn factoring Post CAP I NCREASE

On July 2010 90.5% stake of Factorit has been sold to BPS anc BPM

Data as of 31/12/2009.

(now: €5.8 bn)* * * (now: €3.2 bn)* * * (now: €2.2 bn)* * * (€5.1 bn as at June 2010)

• 08 July 2009

Banca I talease: reorganisation completed

: closure of the Public Tender Offer on Banca Italease with a 88.127% stake held by Banco Popolare; since 30 September 2009, Banca Italease is

consolidated on a line-by-line basis.

• 31 December 2009: legal effectiveness of the Banca Italease reorganisation. Transfer of business units to Newco 1 and Newco 2.
• 08 January 2010: €1.2bn capital increase finalised. Banco Popolare increased its stake in Banca I talease from 88.127% to 91.397% , following the

exercise of option rights on 30 December 2009.

• 8-26 March 2010: Mandatory offer on remaining Banca Italease shares (159,362,216) pursuant to art. 108, paragraph 2, of TUF (“Purchase Obligation”), at €0.797 per
• share. Following the total shares tendered (138,116,651) Banco Popolare’s stake in Banca italease rose above the 95% threshold (98.853%), allowing it to

proceed with the buy-out of still outstanding shares.

• 8 April 2010: de-listing of Banca I talease.
• 29 July 2010: sale of 90.5% stake of Factorit to BPS and BPM
• December 2010: merger by incorporation of I talease Network in Banca I talease

64

AUTO 1% AERONAVAL 4% EQUIPMENT 7% MORTGAGES 17% REAL ESTATE 71% 3,967 104 899 1,071 817 1,076 92 556 874 3,239 653 1,063

NPLs Watchlist Restructured Past Due Performing TOTAL

Gross Net

Receivables portfolio (leasing+ mortgages) as at 30/ 09/ 2010 Receivables portfolio by product category

Coverage

38% 18% 20% 11% 1%

18% 89% of corporate mortgage loans are guaranteed by real estate assets.

Gross NPLs:

• 38.5%

Gross watchlist loans:

• 51.0%

Banca I talease: Release loan portfolio analysis

€/m

• NPLs are provisioned against by €343m (38%) including also the collateral the coverage rises to 106%.
• Watchlist loans are provisioned against by €197m (18%) including also the collateral the coverage rises to 100%.
• Restructured loans also have a considerable level of provisions, equal to €163m (including also the collateral, the coverage

rises to 109%), of which €127m are related to Statuto group.

Derisking of the Release portfolio % change YTD

• f which €599m gross are related to Statuto

group which is showing a regular performance.

65

NPLs Watchlist Restructured Past Due Performing TOTAL TOTAL GROSS LOANS AS AT 31/12/09 1.463 2.186 184 92 925 4.850 % Comp. 30% 45% 4% 2% 19% Repossession of RE assets

• 112
• 573
• 685

Reclassification

• 517
• 390

655 244

• 7

Credit exctinctions

• 23
• 23

Other changes - remaining portfolio 83

• 91

29 21

• 150
• 109

TOTAL GROSS LOANS AS AT 30/06/10 917 1.109 868 113 1.019 4.026 % Comp. 23% 28% 22% 3% 25% Repossession of RE assets

• 58
• 58

Reclassification

• 54

54 Credit exctinctions

• 37
• 37

Total Gross Loans 917 1.017 809 113 1.074 3.930 Exchange of loans with Alba Leasing 7 98 3 108 Disposal of non RE NPLs <€250,000

• 66
• 66

Other changes - remaining portfolio 41

• 45

7

• 9
• 5

TOTAL GROSS LOANS AS AT 30/09/10 899 1.071 817 104 1.076 3.967 % Comp. 23% 27% 21% 3% 27%

€/m

Release: portfolio evolution

Agreements finalised with Big Tickets during Q3 2010 Agreements finalised with Big Tickets during H1 2010

• Strong delivery in the de-risking process NPLs and watchlist loans down by €1.7bn since year-end 2009 (-

46% ).

• Agreement with Coppola group finalised in October Further reduction of €126m in watchlist loans, with a

repossession of three RE assets (two of which are rented with rental income of about €3.3m on a yearly basis, while

• ne is currently not rented).
• Initiatives aimed at further reducing the risk exposure are under way.

Comments:

66

AUTO 2% AERONAVAL 6% EQUIPMENT 19% OTHER 0.5% MORTGAGES 16% REAL ESTATE 57% 114 98 154 146 306 458 6,207 5,029 151 133 161 352 5,857 4,962

NPLs Watchlist Restructured Past Due Past Due >90 days Performing TOTAL

Gross Net

Receivables portfolio (leasing+ mortgages) as at 30/ 09/ 2010

Banca I talease: ‘Residual’ portfolio analysis*

* Receivables portfolio after the transfer of the leasing and mortgage business units to Release and Alba, excluding Factorit.

Coverage

Receivables portfolio by product category Comments Maturities Equipment Leasing:

• To be reduced by ca. 75% by year-end 2012 and by
• ca. 94% by year-end 2015.

Provisions & Coverage

• Non-performing loans are provisioned against by

€145m (47% ) including also the collateral the coverage rises to 111% .

• Watchlist loans are provisioned against by €106m

(23% ) including also the collateral the coverage rises to 102% .

47% 23% 14% 9% 1% 1%

6% 90% of corporate mortgage loans are guaranteed by real estate assets. €/m

€1,194m €371m €139m €3,472m €1,002m €29m

67

NPLs Watchlist Restructured Past Due Performing TOTAL TOTAL GROSS LOANS AS AT 31/12/09 307 497 90 6.423 7.317 % Comp. 4% 7% 0% 1% 88% Repossession of RE assets

• 49
• 49

Reclassification

• 70
• 79

99 50 Credit exctinctions

• 5
• 5

Other changes - remaining portfolio 47 47 2 39

• 718
• 583

TOTAL GROSS LOANS AS AT 30/06/10 235 460 101 129 5.755 6.679 % Comp. 4% 7% 2% 2% 86% Repossession of RE assets

• 80
• 80

Total Gross Loans 235 380 101 129 5.755 6.600 Exchange of loans with Alba Leasing 30 65 4 9

• 216
• 109

Disposal of non RE NPLs <250K

• 10
• 10

Other changes - remaining portfolio 51 13 10 9

• 357
• 274

TOTAL GROSS LOANS AS AT 30/09/10 306 458 114 146 5.183 6.207 % Comp. 5% 7% 2% 2% 84%

€/m

‘Residual’ Banca I talease: portfolio evolution

• Total loans decrease by 15.2% since year-end 2009 and by -7.1% in Q3 2010.
• Strengthening of credit collection activity:
• Creation of an internal task force made up of 13 people dedicated fully to the collection of loans higher than

€250K: the task force intervenes immediately upon the first unpaid instalment, ignoring the phone collection phase. Such

initiative is already delivering satisfactory results.

• Externalisation to specialised credit collectors of loans < €250K: speeding-up of the recovery process, anticipating

the home collection phase.

Comments:

Agreements finalised with Big Tickets during Q3 2010 Agreements finalised with Big Tickets during H1 2010

68

This document has been prepared by Banco Popolare solely for information purposes and for use in presentation of the Group’s strategies and financials. The information contained herein is derived from sources believed by Banco Popolare to be reliable but has not been independently verified. No representation or warranty, express or implied, is made as to, and no reliance should be placed on, the fairness, accuracy, completeness or correctness of the information or opinions contained herein. The provisions of information should not be relied upon as an assessment of suitability for you of a particular product or transaction. Neither the company, its affiliates, directors, employees, its advisors and/ or agents or representatives shall have any liability whatsoever for any loss howsoever arising from any use of this document or its contents or otherwise arising in connection with this document. The forward-looking information contained herein has been prepared on the basis of a number of assumptions which may prove to be incorrect and, accordingly, actual results may vary. I n addition, not all relevant events or conditions may have been considered in developing such assumptions. Accordingly, actual results may vary and the variations may be material. You should understand such assumptions and evaluate whether they are appropriate for your purposes. There is no guarantee that any of the estimates or projections made will be achieved. This document is not intended to forecast or predict future events. Past performance is not a guarantee or indication of future results. Any estimates and opinions included herein constitute the subjective judgment of Banco Popolare as of the date hereof and are subject to change without any notice. Banco Popolare undertakes not obligation to update these forward-looking statements for events or circumstances that occur subsequent to such dates or to update or keep current any of the information contained herein. As Banco Popolare is not providing you with investment, legal, tax, financial or accounting advice, such matters should be discussed with your independent advisors. The ultimate decision to proceed with any transaction rests solely with you. Banco Popolare is not acting a your fiduciary, advisor or agent and is not managing your account. Therefore, prior to entering into any proposed transaction, you should determine, without reliance upon Banco Popolare, the economic risks and merits, as well as the legal, tax and accounting characterizations and consequences of the transaction, and that you are able to assume these risks. This document does not constitute an offer or invitation to purchase or subscribe for any shares, bonds, notes or other financial instruments and no part of it shall form the basis of or be relied upon in connection with any contract or commitment whatsoever. The distribution of this presentation in certain jurisdictions may be restricted by law. Recipients of this presentation should inform themselves about and observe such restrictions. The information herein may not be distributed, reproduced, published, quoted or referred to, in whole or in part, for any purpose, or distributed to any other party. By accepting this document you agree to be bound by the foregoing limitations. The manager responsible for preparing the company’s financial reports Dott Gianpietro Val Director in charge of Accounting of Banco Popolare, declares, pursuant to paragraph 2 of Article 154 bis of the Consolidated Law on Finance, that the accounting information contained in this presentation corresponds to the document results, books and accounting periods.

Disclaimer

69

Maurizio Faroni, CFO Office: + 39 0458 675 067 m.faroni@bancopopolare.it

Contacts

Anna Di Paolo, Head of ALM & Asset Back Funding Mobile: + 39 371 591 376 an.dipaolo@bancopopolare.it Daniela Antonini, Head of ABS & Covered Bonds Mobile: + 39 371 591 327 daniela.antonini@bancopopolare.it Alberto Basadonna, Head of Finance Mobile: + 39 371 580 373 a.basadonna@bancopopolare.it Tom Lucassen, Investor Relations Office: + 39 0458 675 537 tom.lucassen@bancopopolare.it