CAPITALIA S.p.A. ANNUAL REPORT AT 31 ... - UniCredit Group

CAPITALIA S.p.A.
ANNUAL REPORT AT 31 DECEMBER 2006

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CONTENTS
CAPITALIA S.p.A. ANNUAL REPORT AT 31 DECEMBER 2006
REPORT ON OPERATIONS 5
Technical note on reading the annual report 7
Parent company activities 9
Funding 9
Lending 9
Impaired loans 11
Finance 12
Intercompany transactions 13
Information on stock option plans 14
Equity investments of directors, statutory auditors and General Manager 16
Equity investments of managers with strategic responsibilities 16
Equity investments and shareholdings 16
Shareholders’ equity, solvency ratios and treasury stock 23
Results 24
Share capital and shareholders’ agreements 28
Share capital 28
Shareholders’ agreements 28
The operating structure 32
Human resources 32
Organizational development and technological infrastructure 34
Annual report on the corporate governance system and compliance
with the Corporate Governance Code for Listed Companies –2006 35
Significant post-period events 61
Allocation of net profit for the year 62

CAPITALIA
CONTENTS
REPORT OF THE BOARD OF AUDITORS 63
FINANCIAL STATEMENTS 69
Balance Sheet 70
Income Statement 72
Statement of changes in Shareholders’ equity 74
Statement of Cash Flows 78
NOTES TO THE FINANCIAL STATEMENTS 81
PART A – Accounting policies 82
PART B – Information on the balance sheet 99
PART C – Information on the income statement 155
PART D – Segment information 175
PART E – Risks and the related hedging policies 176
PART F – Information on shareholders’ equity 249
PART G – Business combinations 255
PART H – Transactions with related parties 256
PART I – Payments based on own equity instruments 260
APPENDIX 261
ATTACHMENTS 265
REPORT OF THE INDEPENDENT AUDITORS 279

REPORT ON OPERATIONS

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TECHNICAL NOTE ON READING
THE ANNUAL REPORT
The annual financial statements of Capitalia S.p.A. at
31 December 2006 have been prepared in conformity
with the recognition and measurement criteria
established by the International Financial Reporting
Standards (IFRS) and the International Accounting
Standards (IAS) issued by the International Accounting
Standards Board (IASB) and endorsed by the European
Commission under the procedure envisaged in Article 6
of Regulation (EC) No. 1606/2002 of the European
Parliament and the Council of 19 July 2002 – and in
accordance with the provisions of the Bank of Italy
circular no. 262 of 22 December 2005 containing
instructions on the format and rules of preparation of
bank financial statements (1) . The regulation has been
fully transposed into Italian law following the enactment
of Legislative Decree 38 of 28 February 2005, which
came into force on 22 March 2005. The latter
establishes, among other provisions, that companies
whose financial instruments are listed on regulated
markets must prepare their consolidated financial
statements in conformity with international accounting
standards as from the 2005 financial year, and banks
may also draft their statutory accounts in conformity
with those standards.
The formats adopted comply with those set out in the
Bank of Italy Circular no. 262 of 22 December 2005. The
comparative figures are those already published for 2005
and therefore do not include the tables for which the
Group had chosen to apply the options permitted under
the transitional provisions contained in the Bank of Italy’s
letter no. 14824 of 5 January 2006.
The international accounting standards adopted are
indicated in Part A “Accounting policies” of the Notes.
Pursuant to Consob regulations (Communication
91001574/97 and Resolution 10867/97) and in
execution of the resolution of 20 April 2006 of the
Parent Company’s Shareholders’ Meeting, Reconta
Ernst & Young S.p.A. has audited both the
consolidated and statutory financial statements at 31
December 2006.
Pursuant to Consob Notice DEM/6064293 of 28 July
2006, this report contains tables reporting the following:
transactions with related parties;
significant, non-recurring events and operations.
The annexes contain:
the list of equity investments and voting rights
exceeding 10% in companies with unlisted shares or
private limited companies;
the statement of changes in equity investments.
(1) Account was also taken of the “Operating Guidelines for the Transition to IAS/IFRS” drafted by the Organismo Italiano di Contabilità (Italian Accounting Board).
The final version of the guidelines was approved on 16 September 2005 and published on 6 October 2005.

CAPITALIA
REPORT ON OPERATION
As from 1 January 2006, Capitalia’s scope of
operations has expanded due to the partial transfer to
Capitalia of the real estate holdings (with a value of more
than €1.8 billion) of Banca di Roma, Banco di Sicilia,
Bipop Carire and Capitalia L&F and the partial, nonproportional
spin-off of MCC S.p.A. into Capitalia
concerning the Lending Area, AFS financial assets,
certain equity investments and certain loans to Italian
banks, which involved an increase in the share capital of
Capitalia S.p.A. of €75,261,959.

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PARENT COMPANY ACTIVITIES
FUNDING
Total funding amounted to €55,923 million, a fall of
1.8% compared with the total of €56,924 million at the
end of 2005. Net interbank funding totaled €27,952
million (–8.5%). Funding from customers, almost entirely
consisting of bonds, rose from €26,382 million to
€27,971 million (+6%).
In 2006, Capitalia S.p.A. made medium/long-term
bond issues for more than €9.1 billion (of which €8.3
billion in senior bonds), an increase of 47% compared
with the end of 2005. Much of the increase in assets was
generated on the international market (with funding
amounting to €3.9 million, almost double the amount
reported 12 months previously). Thanks also to further
improvements in the bank’s capacity to generate
revenues and to the Group’s robust asset base, Capitalia
was able for the first time to make two issues for a value
of more than €1 billion each.
Specifically, €400,000,000 in Subordinated Lower Tier
II Step-Up Callable Floating Rate Notes due 2016 were
issued on 7 April under the EMTN program. In the last
week of June, the bank made a senior four-year bond
issue for a nominal value of €500 million with a settlement
date in July. The bank’s first issue to touch the threshold
of €1 billion was made in September in the form of a
senior issue with a 3-year maturity for a nominal value of
€1,000 million. In October, the documents relating to the
Euro Medium-Term Notes (EMTN) program were renewed
at the Luxembourg Exchange. In November another
senior bond issue, this time with a maturity of five years,
was made for the nominal value of €1,000 million.
In January 2007, a 7-year issue of €1,250 million was
placed on the international market.
The Capitalia Group banks placed bonds worth €2.9
billion (–22% on an annual basis), of which senior bonds
made up €2.5 billion. Structured securities accounted for
€1.8 billion of the senior funding on the domestic market
and plain-vanilla securities made up the rest. In addition
to these, the Parent Company placed €2.3 billion in
bonds, most of which in respect of index-linked policies
issued by CNP Capitalia Vita. This marked a significant
increase from the total of €500 million in 2005.
With reference to the changes in regulations for the
placement of bond issues that came into effect in May
2006 with the amendment of Article 100 of the
Consolidated Law on Financial Intermediation by Law
262/2005 (“Provisions for the protection of savings and
rules governing financial markets”), Capitalia obtained
authorization in July and November from Consob for two
prospectuses for the public offering of non-equity
financial instruments for the placement of bonds on the
domestic market. The approval enabled the Bank to
move ahead with its program of placing a variety of types
of bond on the Italian market.
LENDING
Total lending came to €42,001 million, an increase
of 3.5% with respect to the total of €40,566 million at
the end of 2005. Lending to customers totaled €2,843
million (€3,507 million at 31 December 2005), of which
bad debts made up €1,614 million. Lending to banks

CAPITALIA
REPORT ON OPERATION
reached €39,158 million (€37,059 million at the end
of 2005).
In the area of corporate governance, the Parent
Company advises subsidiaries on the most efficient
means of developing and expanding lending in
accordance with their chosen risk profiles. The guidelines
reflect the ongoing changes in internal rating systems as
they are progressively enriched with new tools for
identifying and measuring risk.
The Group set out the underlying principles on
which lending policies are based, such as treating
expected loss as a cardinal element in the process of
loan origination and commercial planning. It also set
out lending strategies that are consistent with the
vision of customer risk, especially as regards individual
and sectoral risk concentration. In determining
commercial strategies for new customers, particular
attention is given to counterparty risk and the need to
plan with reference to the expected loss in cases of
counterparty default. A special section dealing with
lending policies is dedicated to sectoral loss, using
appropriate risk-opportunity matrices based on
potential outcomes and the Group’s risk exposure in
certain economic sectors.
As part of the re-engineering of the Group’s loan
origination and management processes, work continued
in 2006 on implementing putting internal rating systems.
The aim of the Parent Company’s coordinating activities
is to develop a shared, uniform approach and standardize
processes throughout the Group.
Pursuant to Basle 2 rules, the rating assignment
process envisages the complete separation of the
structures responsible for processing and granting loans
from those that assign and validate the rating. The
internal rating and pricing agencies operating within the
Parent Company and within each bank are in charge of
the rating assignment and are specialized by customer
segment. Specifically, the internal rating agency of
Capitalia is responsible for Large Corporate, Banks and
Country Risk. The opinions issued by internal agencies,
complemented by spread risk adjusted indicators, are
used to back up decisions made by the Lending
Committees, and are also subjected to continuous
verification and backtesting.
In 2006, Capitalia’s Lending Committee issued
almost 1,200 governance opinions relating to
“significant exposures” under consideration by
subsidiaries, and ensured they conformed to the
Group’s lending policy by verifying their consistency
with the global risk of the Group and by considering
their pricing in relation to risk and capital commitment.
The definition of a “significant exposure” was also
changed so that the Bank now refers to the credit
ratings of customers when determining the risk
threshold at which a lending decision needs to be
submitted to the Lending Committee for examination.
The threshold is lowered for certain cases, such as loans
for individual property transactions, loans to problem
borrowers and committed lines of credit priced in
derogation from Group policy.
As regards preserving and improving asset quality, the
Group’s loan monitoring directive, which defines the
activities, responsibilities, and procedures for interaction
between the Parent Company’s Loan Monitoring function
and the analogous units of the Group banks and financial
companies, has been fully implemented. The role of
governance is performed through the periodic activities
of the Coordination Group, whose members include the
head of the loan monitoring function of Capitalia S.p.A.
and the heads of lending and loan monitoring of each of
the Group companies.
As part of the Group governance function, criteria for
classifying loans that are consistent with the instructions
issued by the Bank of Italy and valid for all the companies
in the Group were also established.

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As regards classified positions, the Parent Company
and the subsidiaries continued to develop a common set
of criteria for loan recovery policy and the development
of a shared set of methodologies for the management of
classified positions. Capitalia participates both at the
loan classification stage, with the issuance of prior
opinions that it formulates on the basis of information
that subsidiaries are required to provide in a timely
manner about their most significant classified positions;
and at the loan management stage, using methods that
vary in accordance with the different categories of loan,
which are described below.
than €5 million) is also managed by the subsidiaries,
but Capitalia SpA sets out the governance rules and
management policies, with particular respect to
positions that are shared by several Group
companies.
Capitalia also fulfils its governance functions through
the periodic activities of its “Coordination Group”, which,
to ensure sufficient coordination, is made up of the Head
of the Restructured Loans Department of Capitalia S.p.A.
and the loan managers of Group banks.
The Parent Company directly manages Level 1
“Management” positions, which include bad debts in
excess of €20 million and substandard and
restructured loans in excess of €5 million with a high
degree of risk and/or complexity. The Parent Company
retains the authority to carry out all forms of
management activities, including the formalization of
proposals, but without prejudice to the role of
individual subsidiaries in making and implementing
lending decisions.
Positions falling under Level 2 “Control” (bad debts of
between €2.5 and €20 million; substandard and
restructured loans in excess of €5 million with a lower
degree of risk and/or complexity) are managed by the
subsidiaries. The Parent Company contributes opinions
prior to the subsidiaries taking decisions, establishes
management policies, provides technical support and
constantly monitors the performance of positions.
IMPAIRED LOANS
Bad debts amounted to €1,614 million (€1,730
million at the end of 2005). Of the total, 29.2% (€471
million) regarded real estate loans backed by collateral;
the remaining 70.8% (€1,143 million) regarded ordinary
loans, most of which are also secured.
Capitalia S.p.A.’s bad debts are mainly inherited in
June 2002 from the “old” Banca di Roma, to which
further non-performing claims were subsequently
added.
As regards uncollected default interest maturing
during the year, about €16 million (almost entirely
related to real estate loans) was taken to income in
respect of interest considered recoverable, and €100
million written down as unrecoverable.
Level 3 “Governance” (bad debts of less than €2.5
million and substandard and restructured loans of less
The table below shows the coverage ratios for bad
debts:
Ordinary loans Real estate loans Total
31/12/06 31/12/05 31/12/06 31/12/05 31/12/06 31/12/05
Bad debts with customers 69.9% 69.6% 49.2% 47.4% 65.8% 65.1%

CAPITALIA
REPORT ON OPERATION
FINANCE
In line with the model of integrated treasury
management and payments systems, the funding
activities of the Group are centralized under Capitalia. At
31 December 2006, Capitalia S.p.A.’s net interbank
creditor position was €11,206 million compared with
€6,517 million at end-2005.
In the area of treasury operations, repurchase
agreements were used to re-finance securities portfolios
and provide funding for the customer operations of the
banks in the Group.
In 2006, Capitalia took part in all major ECB
refinancing operations: the average value of each
allotment was €1.2 billion, and the total in the year was
€60.7 billion. Capitalia also took part in six of the 12
long-term reverse transactions (with three-month
maturities) for a total of €994 million (and an average of
€165.7 million for each operation).
In a context of modest growth and moderate inflation,
financial markets benefited from the considerable
reduction in volatility. The year was marked by doubledigit
growth on equity markets, tight monetary policy to
counter the inflation risk associated with rising energy
prices and strong domestic demand. The sharp rise in
interest rates, especially short-term rates, as well as the
strong demand for long-term investments, flattened the
yield curve. Against this background, the portfolio of
assets available for sale was managed with a view to
reducing risks and limiting exposure, especially the bond
portfolio, which was penalized by rising interest rates.
The reduced market volatility made it possible to
develop low-cost asset protection policies.
The year was also marked by a large expansion in
interest rate and exchange rate hedging derivatives in
the Corporate segment, and, thanks also to the extensive
synergies between Capitalia and the retail banks of the
Group, the volumes traded and net income generated
both rose steeply. Of comparable importance in the year
was the expansion in the range of products offering
customers an increasingly generous array of more
dynamic, suitable and efficient solutions for their hedging
requirements. In the second half of the year in particular,
the Group’s business in this area expanded thanks in part
to the increase in interest rates, which raised the demand
for hedging instruments. Work continued on the
structuring of own securities placed with customers and
institutional investors, and on the structuring of securities
issued by third parties.
On 1 January 2006, MCC demerged part of its
operations and transferred its Equity Capital Market and
Debt Capital Market activities to the Finance line of
Capitalia. Capitalia operated as sole arranger, joint lead
manager and joint-book runner in the F-E Gold
operation, which consisted in the securitization of
receivables in respect of performing leases for a value of
around €1 billion from Fineco Leasing. Capitalia also
acted as arranger and joint-lead manager in the Green
Finance transaction. The operation involved the
securitization of trade receivables due to sundry suppliers
and healthcare centers from local healthcare authorities
and hospitals in Lazio, with a total value of €654 million.
Capitalia acted as a calculation agent for several
securitization operations carried out in prior years, such
as: Pharma Finance, Heliconus, F-E Personal Loans, F-E
Mortgages Serie 1, F-E Mortgages 2005, F-E Green,
Capricorn, Mercury 1 and Gemini 1, as well as the F-E
Gold and Green Finance operations just mentioned.
In the capacity of co-manager, Capitalia participated
in guarantee and placement consortiums set up by third
parties for the following issues: Telefonica Emisiones
(four installments with maturities of 5, 10, 12 and 20 years
for a total amount of €5.25 billion); Republic of Italy (€5
billion with a maturity of 15 years); Fiat Finance Trade (€1
billion with a maturity of 5 years); Republic of Italy

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Inflation Linked (€4 billion with a maturity of 10 years);
and HSBC (€750 million with a maturity of 10 years).
ordinary shares of Iride S.p.A., a company created out of
the merger of AMGA S.p.A. and AEM Torino S.p.A..
As regards equity capital market activities, Capitalia
took part in significant operations on the domestic market.
Specifically, Capitalia acted as joint global coordinator,
joint bookrunner, joint listing partner and placement agent
for the public offering of the ordinary shares of Antichi
Pellettieri on the Espandi market; as joint lead manager of
the guarantee consortium for the capital increase
operation of IMMSI; as co-manager of the guarantee
consortium for the capital increase carried out by
Lottomatica. Capitalia also acted as placement agent for
Fondo Immobiliare Delta, the first real estate investment
fund to be sponsored by Fimit SGR. Capitalia also acted as
coordinating bank for participation in the obligatory public
tender offer by Finanziaria Sviluppo Utilities for the
At 31 December 2006, total financial assets
amounted to €10,862 million, compared with €15,396
million at the end of 2005. Financial assets held for
trading and financial assets available for sale both
decreased.
INTERCOMPANY TRANSACTIONS
The model adopted by Capitalia for the
implementation of a centralized treasury has resulted in
substantial intragroup transactions. Relations with Group
companies at 31 December 2006 are presented in the
following table:
(millions of euros) Assets Liabilities Guarantees
and commitments
In respect of:
– banking subsidiaries 29,908 18,572 3,732
Banca di Roma S.p.A. - Italy 11,000 7,349 197
Banca di Roma S.p.A. -
foreign branches 142 640 2,570
Banco di Sicilia S.p.A. 6,292 7,459 14
Bipop Carire S.p.A. 4,519 845 1
Irfis S.p.A. 48 24 –
MCC S.p.A. 7,564 20 439
FinecoBank S.p.A. 336 1,876 511
Capitalia Luxembourg S.A. 7 359 –
– financial subsidiaries 256 576 791
– other subsidiaries 81 10 9
– associated companies 47 1,789 24
Costs and revenues relating to transactions undertaken with subsidiaries and affiliates during the period are shown in
the following table:

CAPITALIA
REPORT ON OPERATION
(millions of euros) Subsidiaries Associates
Costs 645 24
– interest expense 520 24
– commission expense 59 –
– general and administrative expenses 64 –
– operating costs 2 –
Revenues 949 –
– interest income 812 –
– commission income 18 –
– operating income 119 –
As a result of the sale of equity investments in
Capitalia Partecipazioni S.p.A., net income resulting from
the disposal of AFS assets amounted to €449 million.
Capitalia collected €967 million in dividends from
subsidiaries and €135 million from associated
companies.
INFORMATION ON STOCK OPTION PLANS
The second phase of the stock option plan approved
by the Extraordinary Shareholders’ Meeting of 16 May
2002 was put into effect. The Meeting had approved a
capital increase of up to €20 million through the issue of
20 million ordinary shares backing 20 million nonnegotiable
warrants for the purchase of ordinary shares,
granted at no cost to Group employees, and the
completion of the second phase brought the capital to
the ceiling set by the Meeting.
During the first cycle, carried out on 1 October 2002,
a total of 14,058,000 warrants were granted to 182
Group employees.
The strike price for the options granted in 2002 was
€1.214, while that for those granted in 2004 was
€2.4743.
At 31 December 2006, there were still 4,640,250
outstanding warrants out of a total of 19,965,000
granted. The decrease is the result of the exercise of
15,157,250 warrants and the lapse of 167,500 warrants.
Of the 4,640,250 warrants still outstanding, 215,500
pertaining to the first phase and 1,909,750 to the second
may be exercised immediately.
Twelve people who were deemed eligible under Article
6 of the rules were allowed to exercise warrants granted on
3 August 2004 ahead of the normal vesting period.
As to the new incentive plan approved by the Board
of Directors on 23 February 2005, the Extraordinary
Shareholders’ Meeting of 4 April authorized a capital
increase of up to a nominal amount of €22,000,000
through the issue of 22,000,000 ordinary shares backing
22,000,000 non-negotiable warrants for the purchase of
shares granted at no cost to Group employees.
With the lapse of 563,000 warrants from the first
assignment, it was possible to assign 6,470,000 warrants
to 182 Group employees on 3 August 2004.
The Board also approved a stock incentive plan for
the managing directors of Group companies who are not
direct employees of the Group, which provides for the

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granting at no cost of up to 1,500,000 non-negotiable
warrants (against treasury shares) for the purchase of
Capitalia ordinary shares.
On 9 May 2005, both the stock option plan for
employees (21,795,000 warrants granted to 437
beneficiaries) and that for managing directors of Group
companies who are not employees of the Group
(850,000 warrants) were implemented.
The strike price of the warrants, calculated using the
arithmetic mean of the price of Capitalia shares during
the month preceding the grant date, was €4.1599 per
share.
At 31 December 2006, there were a total of 850,000
warrants assigned to non-employee managing directors
of Group companies still outstanding, and 20,505,000 (of
which 195,000 exercisable immediately) still outstanding
out of a total of 21,795,000 effectively assigned to
employees. The decrease in the number of warrants was
the result of permitting 13 holders meeting the criteria
defined by Article 6 of the rules to exercise 680,000
warrants ahead of the normal vesting period and the
lapse of 610,000 warrants.
As a result of the merger of Fineco into Capitalia on
31 December 2005, Capitalia took over all of Fineco’s
legal relationships, including those regarding its stock
option plans.
In this regard, on 28 November 2005 the Capitalia
Extraordinary Shareholders’ Meeting approved a capital
increase to back the plans, broken down into the
following divisible tranches:
up to a nominal €3,466,650 backing 2,079,990
warrants allocated pursuant to the incentive plan
approved by the Extraordinary Shareholders’
Meetings of 13 November 2003 and 1 April 2005 of
Fineco, to be carried out by 31 December 2009
through the issue of up to 3,466,650 ordinary shares
of the surviving company with a par value of €1 each,
which shall be offered for subscription to the holders
of the above warrants based upon the exchange ratio
provided for Fineco shareholders within the scope of
the merger, at the price of €4.240 for each newly
issued share;
up to a nominal €10,543,334 backing 6,326,000
warrants allocated pursuant to the incentive plan
approved by the Extraordinary Shareholders’ Meetings
of 1 April 2005, to be carried out by 31 December 2011
through the issue of up to 10,543,334 ordinary shares of
the surviving company with a par value of €1 each,
which shall be offered for subscription to the holders of
the above warrants based upon the exchange ratio
provided for Fineco shareholders within the scope of
the merger, at the price of €3.9348 for each newly
issued share.
With regard to the 2003 incentive plan, at 31
December 2006 the warrants still outstanding and
not yet exercised numbered 1,393,650 out of a total
of 3,466,650 granted. The decrease is the result of
the exercise of 1,234,500 and the lapse of 838,500.
Two holders meeting the criteria defined by Article 6
of the rules were also allowed to exercise a joint total
of 90,750 warrants ahead of the normal vesting
period.
With regard to the 2005 incentive plan, at 31
December 2006 9,537,667 warrants were outstanding
(23,000 of them exercisable immediately) out of a total of
10,543,334 granted. The decrease is the result of the
lapse of 1,005,667 warrants.

CAPITALIA
REPORT ON OPERATION
EQUITY INVESTMENTS OF DIRECTORS, STATUTORY AUDITORS AND GENERAL MANAGER
(ART. 79 CONSOB RESOLUTION NO. 11971 OF 14/5/99 AS AMENDED)
Name Companies Number of shares Number Number Number of shares
in which shares held at the of shares of shares held at the
are held end of 2005 acquired sold end of 2006
GERONZI Cesare Capitalia 1,250 (4) – – 1,250
ARPE Matteo MCC 95,028 (6) – – –
Capitalia 471,546 (5) 1,800,000 (7) 1,800,000 (7) 2,176,980 (9)
Capitalia 1,357,000 (8) –
SAVONA Paolo Capitalia – 20,100 (1) – 20,100 (1)
COLANINNO Roberto Capitalia 22,325,528 (2) – – 22,325,528 (2)
MARCHINI Alfio Capitalia 16,551,158 (2) – – 20,035,507 (2) (3)
MCC 950,277 (2) – – –
TOTI Pierluigi Capitalia 34,805,000 (2) 17,095,755 – 51,900,755 (2)
VEZZOSI Walter Capitalia 3,960 (1) (4) – 460 3,500 (4)
LAMANDA Carmine Capitalia 7,588 – – 7,588
(1) acquired before appointment (5/12/2006).
(2) through subsidiaries
(3) of which 3,484,349 from conversion of 950,277 MCC shares.
(4) held by spouse.
(5) of which 170,557 in stock granting.
(6) at 1 January 2006 the shares were converted into 348,434 Capitalia shares following the partial demerger of MCC operations to Capitalia.
(7) from the exercise of stock options (see Part H of the notes to the financial statements).
(8) of which 1,257,000 acquired with the capital gain on the sale of shares from the exercise of stock options (see note 7).
(9) of which 348,434 from conversion of 95,028 MCC shares.
EQUITY INVESTMENTS OF MANAGERS WITH STRATEGIC RESPONSIBILITIES (N. 13)
Company Number of shares Number Number Number of shares
held at the of shares of shares held at the
end of 2005 acquired sold end of 2006
Capitalia S.p.A. 97,363 3,618,699 2,633,730 1,082,332
EQUITY INVESTMENTS AND SHAREHOLDINGS
The item “Equity investments” (in subsidiaries or
associated undertakings, whose definition is the same in
the Italian Civil Code and IAS/IFRS rules) stood at
€12,171 million at 31 December 2006, up from €10,983
million at the end of 2005, and breaks down as follows:
Banca di Roma S.p.A.: €4,629 million; Banco di Sicilia
S.p.A.: €1,658 million; Capitalia Partecipazioni S.p.A.:
€1,251 million; MCC S.p.A.: €1,013 million; Bipop Carire
S.p.A.: €819 million; FinecoBank S.p.A.: €766 million;
Capitalia Asset Management S.p.A.: €483 million.
In application of IAS/IFRS, some equity interests were
reclassified as “Financial assets available for sale”,
“Financial assets at fair value” or “Financial assets held

16 17
for trading”, depending upon the characteristics of the
individual securities and operational decisions.
The corresponding section of the consolidated
financial statements provides details of the equity
investments of MCC transferred to Capitalia as a result of
the non-proportional demerger of MCC, effective as of 1
January 2006. Similarly, the rationalization of the Group’s
equity investment portfolio, which was completed in
2006, is also described in full in the consolidated financial
statements. The following are the most important
portfolio reorganization operations involving the Parent
Company in the year.
On 13 and 22 June, Capitalia acquired Bipop Carire’s
100% holdings in, respectively, Fin-Eco Merchant S.p.A.
and Akros Casa S.p.A. in liquidazione (with the
liquidation process nearing completion), which were
used as the main vehicles for the process of reorganizing
its equity investments. Fin-eco Merchant changed its
name to Capitalia Merchant S.p.A. with effect as of 11
July 2006, and Akros Casa, changed its name to Capitalia
Partecipazioni S.p.A. as of 23 June 2006, simultaneously
with the revocation of its liquidation status. Both
companies transferred their registered offices to Rome.
Capitalia completed the following sale operations:
Capitalia Partecipazioni received 6,037,342 shares of
Camfin, 81,665,400 shares of Pirelli & C. S.p.A.,
15,150,000 shares of RCS Mediagroup S.p.A., 7,327,237
shares of Gemina S.p.A., 76,772,879 shares of
Mediobanca S.p.A. (AFS and HFT portions), 28,854,856
shares of Assicurazioni Generali (HFT portion and the
portion purchased simultaneously from Consortium) and
264,750 shares of Investimenti Infrastrutture S.p.A..
Capitalia Merchant received Capitalia S.p.A.’s
equity investments in: Eurosanità S.p.A. (11.800%),
Istituto Immobiliare di Catania S.p.A. (0.488%), Filse
S.p.A. (1.255%), Nomisma S.p.A. (8.640%), C.RI.F.
S.p.A. (2.394%), La Grande Cucina S.p.A. (12.676%),
Porta di Roma S.r.L. (2.985%), Colony Sardegna S.a.r.l.
(ordinary shares and preferred equity certificates for
a total investment of 13.224% of share capital), and its
units in the closed-end investment funds
Investindustrial LP, EPTA Sviluppo, Clessidra Capital
Partners, Prudentia, Sofipa Equity Fund and Sofipa
Equity Fund II. To provide Capitalia Partecipazioni and
Capitalia Merchant with the financial capacity required
to purchase equity investments from Capitalia and from
other companies in the Group, on 21 June the Board of
Directors of Capitalia approved capital increases up to
€2,600 million and €366 million, or, if necessary, up to
a greater amount corresponding to the market price of
the listed financial instruments that it intends to
acquire. Details of the subscriptions to the capital
increases are given below;
MCC received Capitalia S.p.A.’s entire equity
investment in Europrogetti e Finanza S.p.A. (7.984%).
On 10 March, Capitalia announced that, pursuant to
the law, it had notified Consob and Banca Intesa of its
acquisition of 2.02% of the ordinary share capital of
Banca Intesa. In November, it disclosed that it has
decreased its interest to less than 2%.
On 5 May, Capitalia bought 7,760 shares of
FinecoBank S.p.A. from a private party, thereby
increasing its stake to 98.783%. As of 3 August,
Capitalia’s equity interest increased to 99.99% as a result
of the capital decrease carried out by FinecoBank
through the cancellation of own shares.
On 28 June, having obtained authorization from the
Maltese supervisory authority, Banco di Sicilia transferred
16,128,000 shares in the Bank of Valletta (14.552% of
share capital) to Capitalia. The transaction was carried
out at a price of LM 4 per share, for a total of LM
64,512,000 (€150,272,537). On 30 June, Capitalia
acquired 10.811% of Istituto per il Credito Sportivo

CAPITALIA
REPORT ON OPERATION
(1,032,931 units), again from Banco di Sicilia, for a price
of €73,521,975.05.
In 2006:
in its capacity as sole shareholder, Capitalia subscribed
MCC’s entire capital increase of €350,000,000, which took
place in two installments: the first, effective as of 6 June
2006, for €150,000,000 and the second, effective as of 3
November for €200,000,000, in accordance with the
resolutions of the MCC board adopted on, respectively, 3
May and 10 October, in application with the mandate
granted to it by the shareholders’ meeting on 25
November 2005. As of 3 November, the date on which the
increase was entered in the Company Register, MCC’s
share capital stood at €722,508,690, divided into shares
with a par value of €5 each;
as sole shareholder of Capitalia Partecipazioni, within
the context of a divisible capital increase, Capitalia
subscribed shares with a par value of €100,000,000,
thereby increasing the share capital to €102,550,000,
with a share premium of €1,150,000,000;
pursuant to the resolution of Capitalia Merchant’s
Shareholders’ Meeting of 27 June, Capitalia, in its
capacity as sole shareholder of Capitalia Merchant,
subscribed a divisible capital increase separated into
several installments for up to a maximum of €10,000,000
at a par value of €1 per share, with a share premium of
€40 per share. The final installment was subscribed on
20 December and the capital increase registered on 28
December. The share capital of Capitalia Merchant
therefore stands at €10 million and consists of 10 million
shares with a par value of €1 each;
on 12 April and again on 12 July, Capitalia, in
proportion to its equity interests and pursuant to a
contractual commitment to support capital increases,
subscribed two issues of 180 new shares of Development
Capital 1 S.C.A., each with a par value of €225.00.
Capitalia paid out a total of €564,970.57 (against a total
par value of €450.00); Capitalia’s investment
(subsequently sold, as described below) thus rose to
8,472 shares with a total par value of €10,590 (10% of
share capital);
in proportion to its equity investment, Capitalia paid
€129,264.60 to subscribe a capital increase by La
Grande Cucina S.p.A.. As already noted, Capitalia then
transferred its investment to Capitalia Merchant.
With regard to other minority interests, Capitalia paid
€5,000 to acquire 5.263% of Osservatorio Regionale
Banche – Imprese di Economia e Finanza following the
transformation of the company’s legal status from a
legally-recognized association (to which it has long
belonged) into a limited-liability consortium. On 14
December, Capitalia acquired Banco di Sicilia’s entire
equity investment in C.A.A.B. – Centro Agroalimentare di
Bologna S.c.p.A., which consisted of 34,100 shares,
equal to 0.188% of the investee’s share capital. Capitalia
also joined Consorzio ABI Acquisti by subscribing a stake
with a par value of €1,000 corresponding to 7.143% of
the consortium endowment, and, on 22 December,
participated in the formation of MAC Società di
Promozione del Mercato Alternativo del Capitale S.p.A.,
subscribing 4,000 shares, equal to 3.33% of the new
company. The company was entered in the Milan
Company Register on 11 January 2007.
In 2006, Capitalia made the following payments to:
Colony Sardegna S.a.r.l. in the amount of €1,454,693
effective as of 22 June, against preferred equity
certificates, hybrid financial instruments issued by the
company. As already reported, Capitalia transferred both
its share interests and its preferred equity certificates in
Colony Sardegna S.a.r.l to Capitalia Merchant;
Athena Private Equity in the amount of
€5,261,698.02 as a proportionate shareholder loan made

18 19
with other shareholders, in performance of an agreement
signed when the company was founded;
Ipse 2000 in the amount of €831,825.05 as a
shareholder loan, the amount of which is proportionate to
Capitalia’s equity investment. On 9 October, Ipse 2000
shareholders approved the financial statements at 31
December 2005 and the balance sheet dated 30
September 2006. In the light of losses totaling
€903,272,295 on 30 September (of which €900,450,416
carried over from previous financial years), share capital of
€150,500,000 and an equity deficit of around €366
million, shareholders, acting pursuant to Article 2447 of
the Civil Code, resolved to cover the entire loss and
reconstitute the share capital. This required a restructuring
of the company and a reduction in the number of
shareholders to five, one of them Capitalia. The
shareholders participated in the rebuilding of the share
capital which, after the capital decrease, amounted to
€12,500,000, represented by an equal number of shares.
Capitalia, in addition to its proportionate contribution to
the capital increase, also subscribed to the entire amount
of unexercised options, which increased its stake in the
Ipse 2000 from 16.481% to 37.774%. The entire
subscription was funded by canceling financial receivables
from Ipse 2000. The Shareholders’ Meeting also resolved
to issue equity financial instruments for a total nominal
value of €1,250,000 (Category A) and €7,500,000
(Category B) that were distributed in pre-emption to
shareholders in proportion to their equity investment.
Again in exchange for the cancellation of receivables from
the company, Capitalia underwrote Class A equity
instruments for a nominal value of €625,000 by exercising
its rights on unexercised options.
On 29 December, Capitalia bought 1,528,230 Ipse
2000 ordinary shares from another shareholder at the
price of €0.001 per share, which raised its equity stake in
the company to 50.00001%, equal to 6,250,001 shares.
The value of equity financial instruments held by
Capitalia remained unchanged.
In 2006 Capitalia also provided interest-free
shareholder loans to its own tax collecting companies
undergoing liquidation: Serit S.p.A. (€41 million), Corit
S.p.A. (€1.6 million), Gesett S.p.A. (€550 thousand)
and Spaget S.p.A. (€450 thousand). The loans were
used to pay off an earlier interest-free loans originally
made by Banca di Roma to cover the advance
payments made by the companies to the tax
authorities and other revenue collection agencies for
taxes that remained uncollected.
On 5 July 2006, SEM – Società Esattorie Meridionali
S.p.A. (of which Capitalia owns 99.99%), in execution of
the resolution of the shareholders’ meeting of 27 March,
reduced its equity through the proportional distribution of
a total of €1,500,000 to its shareholders, of which
€486,000 from share capital and €1,014,000 from
reserves. The company’s share capital therefore fell from
€3,096,000 to €2,610,000, through a reduction in the par
value of the shares from €5.16 to €4.35 each. As part of
the reform of the national revenue collection service that
affected several of the Group’s tax collecting companies
(see consolidated report on operations for details), on 26
September Capitalia signed the final contract for the sale
of its entire equity interest in SEM, consisting of 599,942
shares with a par value of €2,609,747.70, to Riscossione
S.p.A.. According to the terms of sale, after the balance
sheet of the transferee has been audited, payment will be
made in the form of Riscossione S.p.A. shares for a total
par value equal to the agreed price.
Other equity disposals in the year by Capitalia were:
the sale to MBE Holding S.p.A. on 13 February of all
of its of 24,000 shares in Società per il Mercato dei Titoli
di Stato – Borsa Obbligazionaria Europea S.p.A.,
amounting to 3.154% of share capital;
the sale to Falcon Uno Real Estate S.r.l., on 23
February of all of its of 610,400 shares in Giraglia
Immobiliare S.p.A., amounting to 17.44% of share capital;

CAPITALIA
REPORT ON OPERATION
the sale to Banca San Paolo IMI S.p.A., on 9 May of
all of its of 2,320,553 shares in SI Holding S.p.A., equal to
5.157% of the share capital; similarly, Banco di Sicilia and
Bipop Carire sold their shares, which marked the
termination of all equity interests of the Capitalia Group
in SI Holding S.p.A.;
as repayment of a shareholder loan, and, on 28
June, €3,490,244.90 as a reserve distribution from
Development Capital I SCA.
Capitalia also sold 17,054,625 AFS shares of Assicurazioni
Generali in several installments on the open market.
the sale to Banca San Paolo IMI S.p.A., on 10 May, of
all of its 62 shares of Banca Italo Albanese ShA,
amounting to 40% of the share capital, in performance of
agreements between the parties;
the sale to Finadin S.p.A., on 8 June of its entire
equity investment in Scontofin S.A., which had amounted
to 20% of the share capital;
the sale to MR Investments di Vittorio Morelli & C.
Sas, on 12 June of all of its entire equity investment in
Finmolise S.p.A., which had consisted of 788 shares
equal to 9.588% of the share capital;
the sale to Pirelli & C. Real Estate S.p.A., of all its
shares in Bernini Immobiliare S.r.l., amounting to 48% of
the share capital.
the sale to a number of qualified financial investors
headed by Partners Group of Switzerland of the its entire
equity interest in Development Capital 1 SCA, equal to
10% of share capital;
the sale on the open market in the period between
24 October and 21 November of its entire equity
investment consisting of 131,657,083 shares (3.207% of
share capital) in Immobiliare Lombarda S.p.A., a
company listed on the Milan Stock Exchange;
the sale of its entire equity investment of 70,000 shares
(10% of share capital) in Lazio Lis in liquidazione to FILAS
S.p.A., accepting, on 29 September, the tender offer.
In accordance with an agreement signed on 29
June, on 7 September Capitalia and Fondiaria-Sai
finalized the sale to the latter of 51% of Fineco
Assicurazioni, consisting of 2,652,000 shares, for a
price of €56 million, which attributes a global value of
around €110 million to Fineco Assicurazioni. The Italian
insurance watchdog authority, ISVAP, approved the
operation on 4 August. As of the half-year report for
2006, Capitalia’s equity investment ceased to be
consolidated on a line-by-line basis for the reasons
given in the Report. The investment consists of
2,548,000 shares with a par value of €1 each, equal to
49% of the share capital of the investee. With effect as
of 29 November, the date on which the modifications
to the name of the company were entered in the
Company Register, Fineco Assicurazioni became
Capitalia Assicurazioni and moved its registered offices
from Rome to Milan.
Two companies were liquidated and eliminated from
Capitalia’s portfolio of equity interests: B.S.H. – Brun
Service Holding S.p.A. in liquidazione (49%), which was
removed from the Company Register of Brindisi on 16
March 2006 upon completion of the liquidation process;
and Columbus II Limited Partnership (0.714%), which was
removed from the Company Register of the State of
Delaware on 22 March 2006 upon completion of the
liquidation process.
Finally, the following changes occurred with regard to
a number of Capitalia investments:
On 24 May and 29 September, Capitalia received
a total of €9,065,734 from Athena Private Equity
the holding in Euroclear Plc decreased from
0.327% to 0.326% upon the completion, on 1 January

20 21
2006, of a capital increase restricted to Euronext
Bruxelles to service the merger of CIK into Euroclear
Bruxelles;
the holding in Centro Agro Alimentare di Napoli
decreased from 1.959% to 1.637% after a decision to not
participate in the capital increase;
the holding in Athena Private Equity S.p.A.
decreased from 24.458% to 23.885% following the
completion, on 7 February, of a capital increase entirely
subscribed by Athena Consulting S.A. (Advisory
Company);
the par value of the equity investment in Società
per l’Ingegneria d’Impresa S.r.l. decreased from
€6,375,000.00 to €2,062,958.00 as a result of a
cancellation of share capital to cover losses through 30
September 2006 and the subsequent bonus capital
increase carried out through the release of reserves, as
authorized by the extraordinary shareholders’ meeting on
21 December. At the same meeting it was resolved to
increase the share capital by up to a maximum
€12,936,126, which was subscribed entirely at the
beginning of 2007 by I.S.E.- Informatica e Sanità a r.l.,
which thereby became a shareholder; Capitalia’s equity
investment decreased to 10.787%;
the holding in S.W.I.F.T. decreased from 0.094% to
0.078% (from 105 to 88 shares) following the ordinary
reallocation of shares in the company performed every
three years based on the volume of work performed by
its shareholders. Taking into account the holdings of
Banca di Roma, Banco di Sicilia and Bipop Carire, the
overall number of shares held by Group in S.W.I.F.T.
increased from 157 to 163 (with a resulting increase in its
stake from 0.14% to 0.145%);
the holding in Molise Sviluppo Soc. Consortile p.A.
increased from 3.33% to 3.65% of share capital as a result
of a corporate operation in which a number of
shareholders were removed from the list of shareholders
and the share capital reduced to cover losses;
the par value of the investment in Reggio Emilia
Innovazione Soc. consortile a r.l. was reduced from
€320,000 to €194,000 as a result of the reduction in the
share capital due to losses. Capitalia’s percentage stake
remains unchanged at 18.605%;
the par value of the investment in Milano Est S.p.A.
was reduced from €3,599,820.00 to €2,110,752.00
(equal to 150,768 shares) owing to the cancellation of
shares to cover losses. Capitalia’s percentage stake
remains unchanged at 34.632%;
the par value of the investment in Cosis S.p.A.
decreased from €276,107 to €222,966 after the share
capital was reduced through the proportionate
cancellation of shares; Capitalia’s percentage investment
remains unchanged at 1.29%;
the par value of Capitalia’s investment in Consortium
S.r.L. decreased from €144,344,200 to €2,696,680, while
its percentage stake remained unchanged at 31.243%.
The reduction came about as a result of an operation that
entailed: the sale of Consortium’s investments in
Mediobanca and Assicurazioni Generali to its own
shareholders for a total price of €655.3 million, with
deferred payment; the subsequent distribution of profits
and reserves in the amount of around €292.5 million; and
the reduction in the share capital and the reimbursement
of reserves of about €550.8 million. The total of €843.3
million was allocated to shareholders, €188 million of it
in cash (of which €58.7 million attributable to Capitalia)
and the remaining €655.3 million (of which €204.7
million attributable to Capitalia) by offsetting against
receivables from Consortium’s shareholders in respect
of the above-mentioned sale of Mediobanca and
Assicurazioni Generali shares;
the par value of the investment in FIDIA - Fondo
Interbancario D’Investimento Azionario SgR S.p.A.

CAPITALIA
REPORT ON OPERATION
decreased from €3,900,000 to €2,860,000 after the
cancellation of shares to reduce the share capital to cover
losses. Capitalia’s percentage stake remains unchanged
at 25%.
After the sale in June of 9,000,000 ordinary Fiat
shares, and a further 22,000,000 sold in the second half
of the year, Capitalia retained 10,199,351 Fiat shares,
equal to 0.93% of ordinary share capital and 0.80% of
entire share capital.
Sanità in liquidazione, a subsidiary company
undergoing liquidation and 99.60% controlled by
Capitalia, modified its legal status from a company
limited by shares (società per azioni) to a private limited
company (società a responsibilità limitata).

22 23
SHAREHOLDERS’ EQUITY,
SOLVENCY RATIOS AND
TREASURY STOCK
The shareholders’ equity of Capitalia S.p.A. at 31
December 2006 amounted to €8,683 million. Changes in
the year are set out in the relevant table.
Risk-weighted assets amounted to €35 billion at 31
December 2006. The Tier 1 ratio was 21.96% and the
total capital ratio was 30.84%.
At 31 December 2006, Capitalia had no own shares in
portfolio. At 31 December 2005, it had held 200,000
own shares. During 2006, Capitalia acquired 69,711,308
shares and sold 69,911,308 to make a net trading gain of
€6,125,628, which it recognized in equity under the
share premium account.
In addition, at 31 December 2006, there were no
unsettled commitments to make spot purchases of
treasury shares.

CAPITALIA
RESULTS
The performance of Capitalia S.p.A. in 2006 is discussed
with reference to the following reclassified income
statement (see reconciliation table in the appendix).
Since 1 January 2006, Capitalia’s scope of
operations has expanded due to the partial transfer to
Capitalia of the real estate holdings of Banca di Roma,
Banco di Sicilia, Bipop Carire and Capitalia L&F and the
partial, non-proportional spin-off of MCC S.p.A. into
Capitalia concerning the Lending Area, AFS financial
assets, certain equity investments and certain loans to
Italian banks.
CAPITALIA S.p.A. – RECLASSIFIED INCOME STATEMENT
Changes
(thousands of euros) 2006 2005 Total %
Net interest income (264,860) (317,257) 52,397 (16.5)
Net income (loss) on assets and liabilities at fair value 778,027 204,999 573,028 279.5
Dividends 1,152,396 989,341 163,055 16.5
Net commissions (14,628) 12,444 (27,072) –
Other operating income (expenses) 170,088 64,491 105,597 163.7
Gross income 1,821,023 954,018 867,005 90.9
Staff costs (156,409) (126,063) (30,346) 24.1
Other administrative expenses (215,500) (217,854) 2,354 (1.1)
Net adjustments of tangible and intangible assets (33,439) (10,239) (23,200) 226.6
Total operating expenses (405,348) (354,156) (51,192) 14.5
Gross operating profit 1,415,675 599,862 815,813 136.0
Net provisions for liabilities and contingencies (52,816) (34,474) (18,342) 53.2
Net impairment adjustments of loans
and other financial transactions (121,627) (118,227) (3,400) 2.9
Net impairment adjustments of financial assets (8,718) (33,495) 24,777 (74.0)
Total provisions and adjustments (183,161) (186,196) 3,035 (1.6)
Net operating profit 1,232,514 413,666 818,848 197.9
Gains (losses) on disposal of assets and
from equity investments 43,606 7,147 36,459 510.1
Profit before tax 1,276,120 420,813 855,307 203.3
Income tax for the year on continuing operations 168,810 175,652 (6,842) (3.9)
Profit (loss) after tax from groups of assets being divested 1,735 – 1,735 –
Net profit for the year 1,446,665 596,465 850,200 142.5

24 25
NET INTEREST INCOME
The period shows net interest expense of €265
million and is consistent with Capitalia’s function as a
holding company whose chief source of revenue is
dividends. The result includes, among other things, the
portion of interest (€108 million, reported under item
130 among the “Impairment writebacks”) associated with
the time-value effect generated by the application of the
amortized cost method to impaired loans.
GROSS INCOME
Changes
(thousands of euros) 2006 2005 Total %
Net interest income (264,860) (317,257) 52,397 (16.5)
Net income (loss) on assets and liabilities at fair value 778,027 204,999 573,028 279.5
Dividends 1,152,396 989,341 163,055 16.5
Net commissions (14,628) 12,444 (27,072) –
Other operating income (expenses) 170,088 64,491 105,597 163.7
Gross income 1,821,023 954,018 867,005 90.9
Among the components of gross income, dividends
(recognized at the moment entitlement to claim them
arises) rose to €1,152 million from €989 million in 2005.
Net gains on assets and liabilities carried at fair value
increased from €205 million to €778 million. The figure
includes the gain from the sale of around 17 million
Assicurazioni Generali shares (€100.7 million), 31 million
Fiat shares (€151.6 million) and 131.7 million
Immobiliare Lombarda S.p.A. shares (€3.7 million), as
well as a net intragroup income of €449 million from the
sale to Capitalia Partecipazioni of shares in Mediobanca
S.p.A., Pirelli & C. S.p.A., Camfin S.p.A., Gemina S.p.A.
and RCS Mediagroup S.p.A.. Commissions went from
net commission income of €12 million to net expense of
€15 million. Other net operating income rose from €64
to €170 million, thanks mainly to the revenues
generated from real estate. Gross income came to
€1,821 million (€954 million at 31 December 2005).
OPERATING EXPENSES AND THE GROSS OPERATING PROFIT
Changes
(thousands of euros) 2006 2005 Total %
Staff costs (156,409) (126,063) (30,346) 24.1
Other administrative expenses (215,500) (217,854) 2,354 (1.1)
Net adjustments of tangible and intangible assets (33,439) (10,239) (23,200) 226.6
Total operating expenses (405,348) (354,156) (51,192) 14.5
Gross operating profit 1,415,675 599,862 815,813 136.0

CAPITALIA
REPORT ON OPERATION
Operating expenses came to €405 million compared
with €354 million in 2005. They included staff costs of
€156 million, which show an increase of 24.1%, partly as
a result of an increase in the average number of employees.
Other administrative costs totaled €215 million, a
decrease of 1.1%. Net writedowns of tangible and intangible
assets amounted to €33 million (compared with
€10 million in 2005), largely a reflection of the spin-off of
real estate holdings. The gross operating profit amounted
to €1,416 million (€600 million at the end of 2005).
PROFIT BEFORE TAX
Changes
(thousands of euros) 2006 2005 Total %
Net provisions for liabilities and contingencies (52,816) (34,474) (18,342) 53.2
Net impairment adjustments of loans and
other financial transactions (121,627) (118,227) (3,400) 2.9
Net impairment adjustments of financial assets (8,718) (33,495) 24,777 (74.0)
Total provisions and adjustments (183,161) (186,196) 3,035 (1.6)
Net operating profit 1,232,514 413,666 818,848 197.9
Gains (losses) on disposal of assets
and from equity investments 43,606 7,147 36,459 510.1
Profit before tax 1,276,120 420,813 855,307 203.3
Total writedowns and provisions amounted to
€183 million, little changed from the prior year
(€186 million). Net impairment adjustments of loans
and other financial transactions amounted to €122
million (€118 million at the end of 2005); net
provisions for liabilities and contingencies came to
€53 million (compared with €34 million a year
earlier), of which €45 million regarding residual
commitments associated with the Ipse investment.
Net impairment adjustments of financial assets
totaled €9 million (compared with €33 million at 31
December 2005).
Net operating profit rose to €1,233 million from
€414 million at 31 December 2005. Including net gains
from disposals amounting to €44 million (of which €52
million is ascribable to the sale of Capitalia
Assicurazioni), compared with €7 million in 2005, profit
before tax came to €1,276 million. At 31 December
2005, profit before tax was €421 million.
NET PROFIT FOR THE YEAR
Changes
(thousands of euros) 2006 2005 Total %
Income tax for the year on continuing operations 168,810 175,652 (6,842) (3.9)
Profit (loss) after tax from groups of assets
being divested 1,735 – 1.735 –
Net profit for the year 1,446,665 596,465 850,200 142.5

26 27
Including positive income taxes for the period of €169 million (€176 million in 2005) and Group income from assets
being divested (€2 million), the net profit of Capitalia S.p.A. at 31 December 2006 totaled €1,447 million. The figure for
31 December 2005 was €596 million.
The following table shows the impact that significant, non-recurring operations performed in 2006 had on the Parent
Company:
(millions of euros)
Impact on income statement
gross of tax
Selling of AFS shares to Capitalia Partecipazioni 449.0
Accrual to provision for liabilities and contingencies – Ipse –45.4
Gain on disposal of Capitalia Assicurazioni 51.6
Gain on disposal of Banca Italo Albanese 13.0

CAPITALIA
SHARE CAPITAL AND SHAREHOLDERS’
AGREEMENTS
SHARE CAPITAL
Capitalia S.p.A.’s share capital, which amounted to
€2,511,134,376 at 31 December 2005, increased by
€84,304,709 over the course of 2006. More specifically:
€75,261,959 as a result of the partial, nonproportional
spin-off of MCC S.p.A. into Capitalia,
effective on 1 January 2006 at 00:01;
€9,042,750 as a result of the exercise of warrants by
employees and the consequent issue of new shares
under the 2002/2008 Stock Option Plan (7,428,250 new
shares issued), the 2005/2011 Stock Option Plan
(380,000 new shares issued) and the 2003/2009 Stock
Option Plan (1,234,500 new shares issued) authorized
by the Extraordinary Shareholders’ meetings of 16 May
2002, 4 April 2005 and 28 November 2005,
respectively;
At 31 December 2006, Capitalia’s share capital
therefore stood at €2,595,439,085 and consisted of
2,595,439,085 ordinary shares with a par value of €1
each.
After the close of the year, share capital increased by
€942,075 as a result of the exercise of the warrants
granted under the stock option plans for 2002/2008
(250,700 warrants), 2005/2011 (55,000 warrants) and
2003/2009 (636,375 warrants). Therefore, as of 2 March
2007, the share capital of Capitalia S.p.A., fully
subscribed and paid up, totaled €2,596,381,160 and
consisted of 2,596,381,160 ordinary shares with a par
value of €1 each.
The schedule reporting the composition of the
shareholders of Capitalia S.p.A. is given in the section
“Capitalia S.p.A. shareholders” in the consolidated report.
SHAREHOLDERS’ AGREEMENTS
On 4 July 2005 the parties to the shareholders’
agreement (signed on 22 October 2003 with the
objective of stabilizing the Group’s ownership,
guaranteeing its decision-making and managerial
independence and strengthening the Group’s longterm
strategies) signed a new agreement expiring on 3
July 2008.
On February 16, 2006, the parties signed a new
agreement that incorporated the changes in the
percentages of shares held as a result of the operations
envisaged in the Addendum signed on 19 January 2006.
More specifically:
the Toro Assicurazioni Group’s stake fell to 1.01%;
the shares sold by the Toro Group (1.094%) were
acquired in proportion to their respective equity interests
by the Fondiaria-SAI Group (0.51%), Pirelli & C. S.p.A.
(0.30%), by Cinecittà Centro Commerciale S.p.A. (0.20%),
by Colacem S.p.A. (0.01%) and by Fininvest S.p.A. (0.08%);
Fininvest S.p.A.’s stake also increased through the
purchase of 0.52% of Capitalia shares on the open market;
Fondiaria-SAI Group also bought a further stake of
0.06% on the open market.

28 29
During 2006, the following stock transfers were also
carried out:
on 4 April 2006, Finanziaria Tosinvest S.p.A., a party
to the shareholders’ agreement, transferred 24,453,051
Capitalia shares to its parent company, Tosinvest S.A.;
on 1 June 2006, Colacem S.p.A. sold 25,864,919
Capitalia shares pledged under the agreement to its
parent company, Financo S.r.l.;
on 28 June 2006, Italmobiliare S.p.A. sold 6,456,343
Capitalia shares pledged under the shareholders’
agreement to its subsidiary, Franco Tosi S.r.l..
On 26 October 2006, in performance of the
transactions provided for in the Addendum signed the
previous 18 October by the parties to the agreement:
Pirelli & C. S.p.A. sold its entire holding in Capitalia,
equal to 1.915% and represented by 49,689,476;
follows: ABN AMRO Group (0.948%), Fondazione
Manodori (0.255%), Fondiaria-Sai Group (0.387%),
Cinecittà Centro Commerciale S.p.A. (0.175%), Fininvest
S.p.A. (0.123%) and Fineldo S.p.A. (0.027%).
Following the sale, Pirelli & C. S.p.A. ceased to be a
member of the Agreement.
On 27 November 2006 Cinecittà Centro Commerciale
S.p.A. transferred the 51,900,755 ordinary Capitalia
shares pledged to the agreement to its wholly-owned
subsidiary Toti Invest S.r.l. Unipersonale.
As a result of the amendments described above and
the Capitalia capital increase arising from the exercise of
the warrants granted under the stock option plans, the
total percentage of Capitalia shares held by the parties to
the agreement at 31 December 2006 stood at 31.00%.
The Fondazione Banco di Sicilia continues to hold shares
that are not pledged under the agreement amounting to
about 1.02% of the company’s share capital.
the shares sold by Pirelli & C. S.p.A. were acquired at
a price of €6.6993 per share by the participants as
The following table sets out the parties to the
agreement:

CAPITALIA
REPORT ON OPERATION
Capitalia S.p.A. shareholders Number of shares pledged % of share capital
a) ABN AMRO Bank (Luxembourg) S.A. 117,133,575 4.51%
ABN AMRO Bank N.V. 77,972,112 3.00%
Algemene Bank Nederland B.V. 28,114,964 1.08%
b) Fondazione Manodori 107,072,401 4.13%
c) Fondiaria-SAI S.p.A. 67,911,042 2.62%
Milano Assicurazioni S.p.A. 23,184,363 0.89%
d) Regione Siciliana 73,746,225 2.84%
e) Tosinvest S.A. 54,633,051 2.10%
f) Toti Invest S.r.l. Unipersonale 51,900,755 2.00%
g) Fondazione Banco di Sicilia 44,332,264 1.71%
h) Financo S.r.l. 25,864,919 1.00%
i) Fininvest S.p.A. 29,069,386 1.12%
l) Nuova Tirrena S.p.A. 16,250,000 0.63%
Augusta Assicurazioni S.p.A. 7,083,629 0.27%
Toro Targa Assicurazioni S.p.A. 2,949,883 0.11%
m) Omniaholding S.p.A. 11,186,739 0.43%
Immsi S.p.A. 11,138,789 0.43%
n) Alfio Marchini 20,035,507 0.77%
o) Fineldo S.p.A. 11,141,096 0.43%
p) Elle Fin. S.A. 9,930,700 0.38%
q) Franco Tosi S.r.l. 6,456,343 0.25%
r) Sirefid S.p.A. 4,000,000 0.15%
s) Angelini Partecipazioni Finanziarie S.r.l. 3,484,349 0.13%
Total 804,592,092 31.00%
The following is a description of the essential terms of
the Agreement.
The agreement will remain in force until 3 July 2008.
No shareholders are in a position to exercise control over
Capitalia through their membership of the agreement.
With regard to limitations on shareholdings, the
parties have undertaken not to increase their equity
investment or voting rights in Capitalia either directly or
indirectly. This limit does not extend to the trading of
Capitalia shares within the limits imposed by the
regulations of the Bank of Italy and Consob and, in any
case, within 0.1% for each shareholder and 0.2% for ABN
AMRO, without prejudice to the take-over bid limit
pursuant to Article 106 (Section 3b) of Law 58 of 24
February 1998 and Article 46 of Consob Regulation
11971/1999.
Furthermore, with regard to the sale of pledged
shares, the parties have agreed not to transfer them
either in whole or in part. The shares may, however, be
transferred within the same group. The members’
meeting can, by unanimous vote and subject to
authorization of the relevant regulatory body, authorize
their sale to a shareholder party to the agreement. The

30 31
other parties have a pre-emptive right to purchase in
proportion to their share.
The organs of the agreement are the Chairman, as
nominated by the members’ meeting, and the members’
meeting itself. The agreement envisages that the
members’ meeting shall be convened before each
Capitalia Shareholders’ Meeting called to appoint
directors and statutory auditors; and before Capitalia’s
Board of Directors meets to vote on capital increases,
mergers or demergers outside the Group, the acquisition
or disposal of equity investments or firms (for transactions
of more than €350 million) or on the strategy to adopt in
response to takeover bids, as well as the appointment of
the chairman of the shareholders’ agreement in the event
of substitution.
The parties to the shareholders’ agreement have
undertaken to ensure that the Capitalia Board of Directors
is composed of twenty-one members, designated as
follows: the current Chairman of Capitalia, Cesare
Geronzi, retains his position; the Managing Director,
Matteo Arpe, also retains his position. Three directors
shall be named by ABN AMRO; eleven by parties to the
agreement with a holding of no less than 0.75% (except
for the parties belonging to the Toro Assicurazioni which
has waived its right to name directors); four independent
directors (of which one named by ABN AMRO) by all
parties by majority vote; and one additional member, by
the current Chairman of Capitalia.
The members’ meeting approves resolutions by
simple majority vote. A majority of 65% is required for
decisions regarding capital increases, mergers or
demergers outside the Group, the acquisition or disposal
of equity investments or firms (for transactions of more
than €350 million) or the strategy to adopt in response to
take-over bids. Even in the event of a resolution by the
members’ meeting, unless such resolution is approved by
75% of the votes, the directors shall be free to make
decisions as they see fit. During Capitalia Shareholders’
Meetings, the parties to the agreement are required to
vote in favor of recommendations of the Board unless at
least one-third of the Directors have voted against
AGREEMENT WITH THE REGION OF SICILY
On 21 January 2002, the Region of Sicily and Banca di
Roma (now Capitalia) signed an agreement containing
the terms of the accords reached regarding the merger of
Banco di Sicilia into Banca di Roma and the consequent
formation of a new company to take over the banking
business of Banco di Sicilia, in accordance with the
corporate reorganization of the entire Bancaroma
banking group. In particular, the agreements govern the
Region’s equity investment in Capitalia and its
representation in the corporate bodies of the holding
company. The agreement was tacitly renewed for three
years as from 1 July 2005, which was its original
termination date. On 16 January 2006, the parties
extended the period during which the Region of Sicily is
barred from transferring its Capitalia shares, which total
73,746,225, to third parties to 3 July 2008.
CAPITALIA – TORO ASSICURAZION AGREEMENT
On 31 July 2006, the Agreement between Capitalia
and Toro Assicurazioni S.p.A expired due to the lapse of
the sole remaining contractual obligation regarding the
commitment by Toro Assicurazioni not to transfer, in
whole or in part, the 26,283,512 Capitalia shares (1.01%)
held through its subsidiaries Augusta Assicurazioni
S.p.A., Nuova Tirrena S.p.A. and Toro Targa Assicurazioni
S.p.A. until 30 July 2006.
The shares continue to be pledged under the
Capitalia shareholders’ agreement through 3 July 2008.
All agreements mentioned above have been
published in accordance with applicable law.

CAPITALIA
THE OPERATING STRUCTURE
HUMAN RESOURCES
At 31 December 2005, Capitalia S.p.A. had 1,112
employees. Over the period, 71 employees left the
company and 155 were hired (77 of which were
intragroup transfers). At 31 December 2006, the
company had 1,196 employees (2) (including 58 from the
partial demerger of the MCC business unit), a 7.6%
increase. The composition breaks down as follows.
Men Women Total
Senior management 127 24 151
Junior management 415 237 652
Professional areas 159 234 393
Total 701 495 1.196
The company’s hiring policy favored the
strengthening of management and certain strategic
structures by incorporating new employees transferred
from other Group companies and hired from outside the
Group.
Ordinary departures (resignations) and separation
incentive schemes (one to one) involved a total of 34
employees. Exits due to the transfer of contracts
between Group companies came to 37.
Capitalia continued to consolidate its structures in line
with the organizational and corporate restructuring
provided for under the 2005-2007 Business Plan. In order
to meet the requirement of those structures, Capitalia
selected employees from the Group’s existing workforce
and made external hires. It also employed persons on a
contract basis for certain short-term projects.
As part of plan to increase staff in the internal auditing
area, 18 professionals with specific skills were found
within the Group and seconded to Capitalia, 10 of which
in the first half of 2007 through the voluntary transfer of
their employment contract.
In conjunction with the partial demerger of the MCC
business unit regarding the Markets, Finance and
Settlement and Equity Investments area, a total of 58
employees were transferred to the Finance line.
External Intragroup Total
Senior management – 4 4
Junior management 15 47 62
Professional areas 63 26 89
Total 78 77 155
With a view to generating Group synergies, 37
intragroup transfers were carried out by Capitalia S.p.A.
(more than half of exits in 2006) in order to meet specific
needs at subsidiaries. Secondments to Capitalia
Solutions, operational since 1 January 2006 were also
(2) The figure includes 34 employees seconded to Group companies. In addition, 123 employees of other Group companies are seconded to Capitalia, which
also has 35 atypical workers.

32 33
defined. The transfers took place in the second half of the
year with the voluntary transfer of their employment
contract.
As part of the rationalization of processes in order to
expand commercial activities and improve services, a
Group call center was established at Capitalia S.p.A. in
November. The unit initially operated with the staff of the
Banca di Roma call center. New personnel were later
hired. Of the seconded staff, some transferred to
Capitalia S.p.A. at the end of 2006, while new transfers
and external hires are planned for 2007.
Capitalia provided support and consulting to the
Group companies on matters relating to union, labor law
and pension issues. Specific assistance was provided to
the companies involved in the reorganization measures
envisaged in the 2005-2007 Business Plan. Help was also
provided in dealing with the issues associated with the
start up of Capitalia Solutions, as well as with
reorganization and staff placement at Capitalia
Informatica.
Support with regard to union and labor issues also
involved a number of Parent Company structures as well
as the companies involved in the sale to the government
of the Group’s tax collection operations (Banca di Roma
per l’Esattoria di Frosinone, S.E.M. S.p.A. and
Riscoservice S.p.A.). The union aspects of the creation of
the call center were also coordinated, preserving
employment levels and professional development
opportunities with intragroup transfers and specific
training programs.
With regard to workplace health and safety, in
implementation of the agreement signed on 29
November 2005 and the related Regulation, steps were
take to prepare and organize the election of Worker
Safety Representatives (WSR), as well as to train the
WSRs, and insure the full roll-out of the body envisaged
under Legislative Decree 626/1994.
As regards staff training and development, the trade
unions were kept informed of and involved in training
initiatives in 2006 and the professional assessment
system adopted. Four training plans were presented for
approval to the national continuing education fund for
service-sector employees (Fondo For.Te.), with the dual
aim of sustaining company competitiveness and ensure
the employability of staff over their working lives. The
plans are founded on the principles of continuing
education (to underscore human capital as a factor for
corporate competitiveness), professional skills and
excellence in knowledge and conduct. Capitalia agreed
the training plans with the unions representing the
employees involved in the initiative, signing an
agreement guaranteeing access to funding under the
Fondo For.Te.. For two years beginning in 2007, Capitalia
will run the four training plans with 11 projects involving
more than half of Group employees.
Staff training activities were focused on expanding
professional skills in furtherance of the Group’s
organizational design and in line with the 2005-2007
Business Plan. The training was particularly geared
towards supporting the “Cambia Tutto”, “Mid
Corporate” and “Customer Satisfaction” programs,
which are described in the consolidated report on
operations. In addition, a variety of management and
conduct training projects were undertaken at a number of
project companies, with initiatives focusing on specific
lines of business.
For the third year in a row, the professional
assessment system was implemented for the entire
Capitalia workforce, incorporating improvements to
enable the more structured collection of information on
the employees assessed. The link with Capitalia’s
“training catalogue” makes it possible to inform
employees about the most appropriate training courses
for their professional development. Capitalia Informatica,
which received Parent Company support in
implementing the new process, also adopted the

CAPITALIA
REPORT ON OPERATION
assessment system, which was already in operation at
MCC and Capitalia Service J.V..
All Group employees were kept up to date on
developments with periodic communications, the Group
intranet and the distribution of a range of internal
publications, all of which helped support motivation and
team spirit in addition to providing information on new
Group projects. Internal communication events were also
organized and assistance was provided in the launch of
specific initiatives, such as the “Customer Satisfaction”
and “Delinquency Management” projects.
by Capitalia Informatica through the Group reference
platform, customized as appropriate for the specific
operational needs of the Parent Company. All the
initiatives undertaken to support compliance with new
regulations and the adoption of new control and
monitoring tools therefore also involved Capitalia.
Specifically, the following projects were implemented:
in support of finance operations, the evolution of the
Murex G 2000 system and the completion of the EAI
platform to integrate front/middle office, back office and
risk management systems, based on business process
and workflow management methods and tools;
ORGANIZATIONAL DEVELOPMENT
AND TECHNOLOGICAL INFRASTRUCTURE
In 2006 organizational activity focused on governing
internal processes and updating the rules related to the
structures and role of the holding company. In addition,
activity focused on implementing the projects provided
for under the business continuity plan.
As regards information systems, Capitalia S.p.A. uses
the applications and technology infrastructure operated
the integration of the Parent Company’s operations
in the Group’s operational ALM system (front office),
which is used to manage interest rate risk at the level of
individual banks (banking book) and the Group;
the completion of the implementation of IT
procedures for depository bank operations;
the centralization and consolidation of systems of the
market and interconnection platform for both the Parent
Company and the retail banks.

34 35
ANNUAL REPORT ON THE CORPORATE
GOVERNANCE SYSTEM AND
COMPLIANCE WITH THE CORPORATE
GOVERNANCE CODE FOR
LISTED COMPANIES – 2006
The recommendations contained in the Corporate
Governance Code, published in July 2002, were take into
consideration in preparing this report. Moreover, the
Bank announces that it has adopted the new 2006
Corporate Governance Code and begun the process of
implementing the specific recommendations.
Therefore, this report is divided into two sections:
I) governance structures
II) information on the implementation of the 2002
version of the Corporate Governance Code
Section I: GOVERNANCE STRUCTURES
INTRODUCTION
Since 2001 the Bank has adopted the Corporate
Governance Code for Listed Companies developed by
the Committee for the Corporate Governance of
Listed Companies at Borsa Italiana S.p.A. as its
reference framework for effective governance. The
Bank has continued to monitor the compliance of its
own system of corporate governance with the
recommendations of the Code, informing
shareholders and stakeholders of developments in the
annual report on operations.
The corporate governance system of the Capitalia
Banking Group, which is based on balancing the
guidance and control role of the Capitalia Group with the
autonomy and delegated authority of each company,
continues to comply with the principles of the Code and
the highest standards of the Italian financial market.
The recent changes in the laws governing banking
and financial activities has allowed the Bank, as the
parent company, to strengthen its role of providing
guidance and coordination, aimed at ensuring that all
Group Companies comply with rules established by
legislative and control bodies.
The corporate governance system ensures that
management’s action is independent and, at the same
time, subject to scrutiny and geared towards achieving its
objectives through effective mechanisms free of conflicts
of interest.
The company, which is a complex organization, brings
together diverse skills and responsibilities, melding the
contributions of many in a collegial decision-making
process with the contribution of all the structures
involved.
Capitalia has developed a comprehensive system of
rules that express the fundamental values of the
“enterprise culture” and the conduct to adopt in order to
implement them in reality. This system has been laid
down in a single document, the “Charter of Principles
and Code of Conduct”. Compliance with these principles
and rules of conduct is an essential prerequisite for
enhancing the reputation and efficiency of the entire
Group in the market.
Capitalia’s mission is to create wealth through the
responsible and efficient exercise of financial and credit

CAPITALIA
REPORT ON OPERATION
activity, in respect for and recognition of the value of the
individual, social cohesion and environmental integrity.
The pursuit of this mission is inspired by the basic values
contained in the Charter, which is divided into ten points,
including the principles of dignity, dedication,
cooperation, excellence, professionalism, transparency
and propriety.
The Code of Conduct is one of the measures we have
taken to ensure the legitimacy and efficiency of company
action and, at the same time, comply with Consob
regulations for intermediaries, as regards the “Specific
Rules of Conduct for Investment Services” and it is also
intended to pursue the purposes of Legislative Decree
231/2001.
The Charter and the Code guide all of the activities of
the Board of Directors and Capitalia’s other bodies, as
well as the coordination activities and implementation of
Group policy by Capitalia management.
A direct offshoot of Capitalia’s mission is its Corporate
Social Responsibility policy. Aware that socially
responsible conduct is a corporate duty, which should
translate into daily action and an ongoing longer term
commitment, Capitalia presented its first Sustainability
Report to inform all stakeholders involved about the
initiatives undertaken and the results achieved thus far.
OWNERSHIP STRUCTURE
The parties to the agreement include leading financial
and industrial companies from Italy and abroad, in
addition to a number of major institutions. The aim of the
initiative is to stabilize the Group’s ownership and
strengthen the Group’s long-term strategies.
The parties to the agreement, which expired on 3 July
2008, contributed shares representing 31.10% of the
share capital. It is felt that the presence of a strong bank
shareholder, one of the leading banking groups in the
world, the diversity of the other shareholders, the
moderate weight of industrial shareholders with respect
to the other parties and the rules governing the
agreement will guarantee the full independence of
Capitalia’s decision-making and management and the
effectiveness of its strategic guidance.
The members have undertaken to ensure that
Capitalia has a Board of Directors composed of 21
members, an Executive Committee of seven members,
including the Chairman and Managing Director, and a
Board of Auditors with three serving auditors and three
alternates, two of which to be designated by the parties
to the agreement while the third, pursuant to the Bylaws,
is appointed by minority shareholders.
The list of the members of the shareholders’
agreement and the key elements of the agreement are
provided in the individual report on operations in the
section “Shareholders’ agreements”.
The share capital is composed exclusively of ordinary
shares with voting rights. The list of main shareholders is
given in the report on operations in the consolidated
financial statements, in the section “Capitalia S.p.A.’s
Shareholders”.
ORGANIZATION OF THE COMPANY
In conformity with current legislation governing
banking and credit and listed issuers, the company
organization is composed of:
A number of Capitalia S.p.A.’s shareholders entered a
new shareholders’ agreement, most recently amended
on 16 February 2006.
the Shareholders’ Meeting, which meets in ordinary
session at least once a year in order to deal with the
matters for which it is responsible and in extraordinary

36 37
session to deal with the matters for which it is responsible
by law;
the Board of Directors, which has a central role in the
corporate governance system and which is responsible
for setting strategic and organizational guidelines;
governance for the structures of the Group companies,
enabling the dissemination of best practices and
distinctive skills and maximizing synergies. The overall
coordination of the main Group companies is carried out
by specific Capitalia Lines/Areas.
the Executive Committee, to which the Board of
Directors has delegated powers, specifying the limits of
such delegation;
Section II: INFORMATION ON THE
IMPLEMENTATION OF THE 2002 VERSION
OF THE CORPORATE GOVERNANCE CODE
the Board of Auditors, which is responsible for
monitoring compliance with the law and the bylaws,
compliance with the principles of good administration, the
adequacy of the company’s organizational structure with
regard to the matters in its sphere of responsibility, the
internal control system and the administrative-accounting
system as well as the adequacy of the instructions issued
by the Parent Company to subsidiaries with regard to
fulfillment of the disclosure requirements. The Board of
Auditors are charged with supervising the methods for
implementing the corporate governance rules provided by
the codes of conduct drawn up by the companies that
manage regulated markets or by industry associations
which the company has publicly announced it follows.
The task of auditing the accounts is entrusted to an
auditing firm entered in the special register of such
firms, which is appointed by the Shareholders’ Meetings
under law.
Capitalia performs policy, control and governance
activities for the Group, thereby ensuring balance
between its role as parent company and respect for the
autonomy and delegated powers of the Group
companies, through a system of clear, common rules that
promote the exchange of information and the creation of
a shared business culture.
BOARD OF DIRECTORS
ROLE AND DELEGATION OF POWERS
The Board of Directors is the central organ of the
Bank’s governance system.
In the light of the bylaws, the assignment of powers
and company practice, the Board has exclusive
responsibility for all the areas specified in the Corporate
Governance Code.
The Board is vested with all powers to carry out the
Company’s ordinary and extraordinary business, except
where expressly reserved by law to the Shareholders’
Meeting. In this regard, the Board is exclusively
responsible for:
determining the general policy of the Company and
approving the strategic, business and financial plans of
the Company;
approving or amending the Company’s internal
regulations with regard to its organizational,
administrative and accounting structure and general
operating guidelines;
The Parent Company is structured around Lines, Areas
and Functions that, in each of their areas, perform
in compliance with the provisions of law and the
bylaws, delegating its powers to the Executive

CAPITALIA
REPORT ON OPERATION
Committee (specifying the limits of such delegation) and
establishing other committees;
appointing a Managing Director, specifying the limits
of the delegation of powers;
Decisions made by persons to whom such powers
have been delegated must be reported to the Board of
Directors in accordance with the procedures and
timetable established by the Board and in any case on at
least a quarterly basis, all in compliance with the law.
on a proposal by the Managing Director, appointing
the General Manager and the members of top
management of the Bank as well as the top management
of subsidiaries;
acquiring or disposing of equity investments that
could change the composition of the Group or of
controlling interests or associates;
determining the criteria for the coordination and
management of the companies of the Capitalia Group, as
well as carrying out the instructions issued by the Bank of
Italy in the interest of the stability of the Group.
The Board of Directors may – without powers of
delegation – also take decisions regarding:
The Board of Directors also sets the remuneration of
the Managing Director and directors with special
responsibilities on the basis of a proposal by the
Compensation Committee and having heard the Board
of Statutory Auditors.
Pursuant to the last paragraph of Article 17 of the
bylaws, the Board of Directors normally reports to the
Board of Auditors on the occasion of the former’s
meetings, but it shall also report directly, in a timely
manner and in any case at least quarterly on the activity
carried out and on operations with a major economic,
financial or balance sheet impact performed by the Bank
or its subsidiaries; in particular, the Board of Directors
shall report on any transactions in which the Directors
have an interest of their own or on behalf of third parties.
mergers in the cases envisaged in Articles 2505 and
2505-bis of the Civil Code in the manner and within the
time limits provided for therein;
the establishment and elimination of secondary
headquarters;
the reduction of share capital in the event of the
withdrawal of a shareholder;
the amendment of the Bylaws in compliance with
legislative provisions.
The structure of the delegation of powers leaves
responsibility for operations with a significant economic,
financial or balance sheet impact to the Board of
Directors, with special regard to transactions with related
parties. The latter are discussed below.
Such disclosure is normally ensured through the
constant participation of the Board of Auditors in the
meetings of the Board of Directors and the Executive
Committee.
Under Article 17 of the bylaws, in urgent
circumstances the Executive Committee may take
decisions normally taken by the Board of Directors; upon
a recommendation of the Managing Director, the
Chairman may take decisions usually taken by the
Executive Committee or Board of Directors when these
are unable to meet. The body that is normally
responsible for such decisions shall be informed at its
next meeting.
The Board of Directors has given the Executive
Committee decision-making powers mainly regarding
lending, operating expenditure and finance on which the

38 39
Executive Committee has reported to the Board of
Directors.
The Board of Directors granted the Chairman and the
Managing Director the joint power to take decisions
concerning the acquisition and disposal of equity
investments (meaning shareholdings classified in the
“financial assets available for sale” and “financial assets
carried at fair value” portfolios) whose carrying amount in
the most recent financial statements is less than 0.60% of
Capitalia’s book equity, excluding transactions that would
involve the recognition of the investment at a value
above that threshold. They were also delegated to carry
out the other significant actions associated with
managing such investments. In addition, the Board also
granted the Chairman and the Managing Director the
joint power to take decisions regarding the acquisition
and disposal of companies or divisions with a value of
less than 0.60% of Capitalia’s book equity.
Pursuant to Article 17 of the bylaws, the Managing
Director proposes lending and investment operations
that are the responsibility of the corporate bodies. He is
also head of personnel and decides on transfers and
promotions – without prejudice to the provisions of
paragraph 2 of Article 17 and proposes such other
measures concerning personnel as have not been
delegated to him.
In addition to the powers established in Article 17, the
Managing Director is responsible, within the scope of
strategies decided by the Board, for proposing to the
Board of Directors the general guidelines for operations,
the budget and the strategic plan of the bank and the
Group; monitoring operations and verifying the
achievement of the objectives established in the plan,
including at the Group level; proposing budget policy to
the Board; overseeing the granting of credit and
managing classified loans; taking decisions in the manner
and within the limits of the powers established by the
Board regarding lending, finance, spending and current
operations; and proposing to the Chairman appointment
of the bank’s representatives on the management and
control bodies of subsidiaries.
The Managing Director reports periodically to the
Board of Directors on the operations of the Bank and the
Group and on the conformity of results with budget
forecasts and the business plan and, at least every
quarter, on activities carried out in the performance of
the duties delegated to him.
The General Manager is responsible for managing the
Company and is assisted by one or more Assistant
General Managers and one or more Deputy General
Managers, as the Board deems fit.
The General Manager also carries out the resolutions
of the Board of Directors and of the Executive Committee
and transacts current business, exercises all other powers
conferred on him, either permanently or from time to
time, by the Board of Directors.
The General Manager attends the meetings of the
Board of Directors and of the Executive Committee with
an advisory vote.
The Board has also given the General Manager the
duty of coordinating the Bank’s line units and overseeing
the assessment of proposed decisions to be submitted to
the Managing Director or other competent bodies, as
well as taking decisions regarding lending, finance,
spending and current operations in the manner and
within the limits of the powers established by the Board.
Given the specific characteristics of the parent
company of a highly complex banking group, it is
especially important to pursue a centralized management
approach based on the coordination of individual
initiatives and the integration of all the information
available. With this in mind, the Board of Directors has
established a series of operating committees to ensure

CAPITALIA
REPORT ON OPERATION
the unity of policy through the maximum dissemination of
information and examination of key activities. The
committees also provide managerial continuity, through
the various phases of operational supervision, to
management control and to strategic decisions. The
chairmanship of the Management, Lending, Special
Finance, Risk, ALM and Expenditure Committees has
been assigned by the Board of Directors to the Managing
Director.
The Management Committee was set up to assist the
Managing Director in carrying out his functions.
Other committees envisaged are a Products
Committee, a Privacy Committee and a Health and
Safety Committee.
Therefore, the composition of the Board of Directors
for 2006 is as follows:
THE BOARD OF DIRECTORS THROUGH
5 DECEMBER 2006
Cesare Geronzi
Chairman
Coenraad Hendrik Adolph Collee Deputy Chairman
Mario Federici Deputy Chairman (§)
Matteo Arpe
Managing Director
Pasquale Cannatelli (*)
Director
Carlo Colaiacovo
Director
Roberto Colaninno
Director
Salvatore Cuffaro
Director
Paolo Fresco Director (§)
COMPOSITION
Jonella Ligresti
Alfio Marchini
Director
Director
The bylaws establish that the administration of the
Bank shall be entrusted to a Board of Directors
composed of between 11 and 21 members. Directors
may be re-elected.
The term of office of the Board of Directors appointed
by the Shareholders’ Meeting on 4 December 2003
expired in December 2006.
On 5 December 2006, the ordinary Shareholders’
Meeting of Capitalia appointed a 20-member Board of
Directors for a three-year term lasting until the
Shareholders’ Meeting to approve the Bank’s financial
statements at 31 December 2008. The new Board of
Directors met on 11 December 2006 to appoint
positions.
Gabriel M. Marino
Director
Paolo Mariotti Director (§)
Ahmed A. Menesi Director (§)
Ernesto Monti (**)
Carlo Alessandro Puri Negri
Director
Director
Alberto Rossetti Director (§)
Carlo Saggio
Director
Giuliano Tagliavini Director (§)
Pierluigi Toti
Director
(*) appointed by the Board of Directors on 20 March 2006 to replaced Antonio
Belloni who resigned as of 10 February 2006
(**) appointed by the Board of Directors on 7 September 2006 to replace
Giampaolo Angelucci, who resigned on 20 July 2006
(§) Independent directors

40 41
THE BOARD OF DIRECTORS APPOINTED BY THE
SHAREHOLDERS’ MEETING OF 5 DECEMBER 2006 (3)
Cesare Geronzi
Chairman
Paolo Savona Deputy Chairman (§)
Paolo Cuccia
Deputy Chairman
Matteo Arpe
Managing Director
Silvio Bianchi Martini Director (§)
Pasquale Cannatelli
Director
Carlo Colaiacovo
Director
Roberto Colaninno
Director
Paolo Fresco Director (§)
Salvatore Mancuso Director (§)
Alfio Marchini
Director
Gabriel M. Marino
Director
Paolo Mariotti Director (§)
Ahmed A. Menesi Director (§)
Ernesto Monti
Director
Massimo Pini
Director
Alberto Rossetti Director (§)
Carlo Saggio Director (§)
Pierluigi Toti
Director
Walter Vezzosi Director (§)
(§) Independent directors
With regard to the appointment, it should be noted
that on 12 October 2006 the Board implemented new
rules together with new procedures for depositing and
publishing slates of candidates for the position of
director in order to allow shareholders to present their
slates in accordance with the provisions of Corporate
Governance Code for listed companies published by
Borsa Italiana in March 2006, concerning the critieria for
candidates to be considered independent.
On 11 December 2006, the Board of Directors
assessed the independence of the directors using new
criteria. On the basis of the information supplied by the
directors themselves, and after an examination of the
individual positions of each, the Board decided that nine
of its members qualified as independent. They were:
Paolo Savona, Silvio Bianchi Martini, Paolo Fresco,
Salvatore Mancuso, Paolo Mariotti, Ahmed A. Menesi,
Alberto Rossetti, Carlo Saggio and Walter Vezzosi.
The directors, thanks in part to the high level of skills
they bring to the job, act and decide knowledgeably and
independently in pursuing the objective of creating
shareholder value. They devote the necessary time to the
diligent performance of their duties, taking account of the
number of positions they hold on the boards of directors
or statutory auditors of other companies that are listed on
regulated markets, including foreign markets, or of
financial companies, banks, insurance companies and
large corporations. In this regard, the following table
shows the directors who hold such positions.
Position at Capitalia Position at other companies
Cesare GERONZI Chairman Deputy Chairman and Member of Executive Committee of
Mediobanca S.p.A.
Chairman of Capitalia Partecipazioni S.p.A.
Paolo CUCCIA Deputy Chairman Country Executive Managing Director of ABN AMRO Bank N.V.
Chairman of EUR S.p.A.
Matteo ARPE Managing Director Managing Director of Capitalia Partecipazioni S.p.A.
Director and Member of the Executive Committee of Mediobanca
S.p.A.
Director and Member of the Executive Committee of Banca
di Roma S.p.A.
(3) The list of Board members is also given in Table 1 in the appendix to this report.

CAPITALIA
REPORT ON OPERATION
Position at Capitalia
Position at other companies
Director of Banco di Sicilia S.p.A.
Director of MCC S.p.A.
Director of CNP Capitalia Vita S.p.A.
Silvio BIANCHI MARTINI Director Director of Banco di Lucca S.p.A.
Auditor of Sofidel S.p.A.
Auditor of Delicarta S.p.A.
Auditor of Soffass S.p.A.
Pasquale CANNATELLI Director Managing Director of FININVEST S.p.A.
Director of Mediolanum S.p.A.
Director of Mediaset S.p.A.
Director of Arnoldo Mondadori Editore S.p.A.
Carlo COLAIACOVO Director Chairman of Colabeton S.p.A.
Managing Director of Colacem S.p.A.
Director of Financo S.r.l.
Chairman of Fondazione Cassa di Risparmio di Perugia
Member of the Steering Committee of Cassa Depositi e Prestiti S.p.A.
Roberto COLANINNO Director Chairman of Immsi S.p.A.
Chairman of Omniaholding S.p.A.
Chairman of Omniainvest S.p.A.
Chairman of Omniapartecipazioni S.p.A.
Director of Mediobanca S.p.A.
Director of RCN Finanziaria S.p.A.
Director of Rodriquez Cantieri Navali S.p.A.
Paolo FRESCO Director Senior Advisor of Credit Suisse First Boston
Salvatore MANCUSO Director Chairman and CEO of Equinox Management S.A.
Chairman of Faber Holding S.r.l.
Director of Gruppo Intercos
Alfio MARCHINI Director Chairman and Managing Director of Astrim S.p.A.
Chairman of Keryx S.p.A.
Chairman of FI.MAR. S.p.A.
Director of Cementir – Cementerie del Tirreno S.p.A.
Director of SO.FI.MAR. International S.A.
Director of STM S.p.A.
Sole Director of Lujan S.r.l.
Paolo MARIOTTI Director Chairman of the Board of Auditors of Thomson Holding Italia
Ernesto MONTI Director Chairman of Astaldi S.p.A.
Chairman of Finanziaria Tosinvest S.p.A.
Director of EnerTad S.p.A.
Massimo PINI Director Deputy Chairman of Fondiaria-SAI S.p.A.
Deputy Chairman of SASA S.p.A.
Deputy Chairman of Immobiliare Lombarda S.p.A.
Director of Milano Assicurazioni S.p.A.
Director of Finadin S.p.A.
Director of Leonardo S.r.l.
Alberto ROSSETTI Director Director of TAV - Treno Alta Velocità S.p.A.
Director of LEO FUND (ITALIA) SGR S.p.A.
Pierluigi TOTI Director Director of SANSEDONI S.p.A.

42 43
MEETINGS OF THE BOARD OF DIRECTORS
Under the bylaws, the Board of Directors normally
meets once a month.
In 2006, the Board met 15 times, and 12 meetings are
scheduled for 2007. The Directors participated regularly at
the meetings, with a small number of justified absences.
The Chairman of the Board is responsible for calling
meetings, in the manner prescribed in the bylaws. Board
meetings may also be held via video- and audioconference.
In advance of all Board meetings, Directors
are provided with the documentation and information
necessary to enable the Board to express itself
knowledgeably on the issues presented for examination.
EXECUTIVE COMMITTEE
The Board of Directors appoints an Executive
Committee made up of five to seven members. The
Committee is chaired by the Chairman of Board of
Directors and includes the Managing Director.
On 11 December 2006, following its appointment,
the Board of Directors appointed the new members of
the Executive Committee for a term of office to run
concurrently with that of the Board.
For 2006, the Executive Committee has the following
members:
THE EXECUTIVE COMMITTEE THROUGH 5 DECEMBER 2006
Cesare Geronzi
Chairman
Mario Federici
Deputy Chairman
Matteo Arpe
Managing Director
Alfio Marchini
Gabriel M. Marino
Carlo Alessandro Puri Negri
Pierluigi Toti
THE EXECUTIVE COMMITTEE
APPOINTED BY THE BOARD OF DIRECTORS
ON 11 DECEMBER 2006
Cesare Geronzi
Chairman
Paolo Savona
Deputy Chairman
Paolo Cuccia
Deputy Chairman
Matteo Arpe
Managing Director
Ernesto Monti
Massimo Pini
Pierluigi Toti
The Executive Committee met 11 times in 2006. An
equal number of meetings is scheduled for 2007.
APPOINTMENT OF DIRECTORS
In order to allow shareholders, starting with the
appointment of the Board in December 2006, to present
slates of candidates for the position of director in
accordance with the new provisions of Corporate
Governance Code for listed companies published in
March 2006, Capitalia’s Board decided on 12 October
2006 to introduce new critieria for candidates to be
considered independent and new procedures for
depositing and publishing slates of candidates for the
position of director under the new Corporate
Governance Code.
As regards the information that must accompany
candidacies for directorships, the Board of Directors
submitted a specific request, included in the notice
convening the Meeting for the appointment of the new
directors, instructing shareholders to deposit, at least 15
days prior to the date fixed for the first session of the
Shareholders’ Meeting, their slates and personal and
professional information about the candidates, along
with any information helpful in assessing their
independence. The Bank also promptly published the list
of candidates and their qualifications on its website.

CAPITALIA
REPORT ON OPERATION
It should also be noted that the application of the
experience and integrity requirements for the corporate
officers of banks implies the existence, at least a
posteriori, of controls of the personal and professional
characteristics of candidate directors.
Members of the Board of Directors and the Executive
Committee are eligible for annual compensation, set at
the Shareholders’ Meeting with reference to the entire
duration of their term, as well as reimbursement of
expenses incurred in the performance of their duties. The
Board of Directors is responsible for dividing the overall
compensation paid among individual members of the
Board of Directors itself and the Executive Committee.
Non-executive directors do not participate in the
stock option plan.
COMMITTEES
The Board of Directors has formed a Compensation
Committee from its own members, as well as an Internal
Control Committee whose functions are to give advice and
make proposals. To date no Nomination Committee or
other Committees have been established. In this regard,
the mechanism described above for requesting
shareholders to deposit the personal and professional
curriculum vitaes of candidates for directorships and to
provide information establishing the eligibility of such
candidates to qualify as independent directors ensures that
the appointment of directors is conducted with sufficient
transparency as to the experience of the nominees.
As noted, the fact that Capitalia is a bank implies the
existence of the experience and integrity requirements
imposed by law.
COMPENSATION COMMITTEE
In March 2001, the Board of Directors established a
Compensation Committee that, in line with the
Corporate Governance Code published in 2002, is
mainly composed of non-executive directors.
On 11 December 2006, following its appointment,
the Board of Directors appointed the Compensation
Committee, for a term of office to run concurrently with
that of the Board, in accordance with the new provisions
of the new Corporate Governance Code which provides
that the majority of the Committee be composed of nonexecutive
directors.
Therefore, for 2006, the Compensation Committee is
composed as follows:
COMPENSATION COMMITTEE THROUGH
DECEMBER 2006
Chairman – Cesare Geronzi (non-executive)
Member – Coenraad Hendrik Adolph Collee Deputy
Chairman – non-executive
Member – Mario Federici
Deputy Chairman – non-executive – independent
Member – Matteo Arpe Managing Director
Member – Paolo Fresco Director -non-executive –
independent
COMPENSATION COMMITTEE APPOINTED
BY THE BOARD OF DIRECTORS ON 11 DECEMBER 2006
Chairman – Paolo Fresco (*)
Director - non-executive – independent
Member – Silvio Bianchi Martini
Director - non-executive – independent
Member – Pasquale Cannatelli
Director - non-executive
Member – Alfio Marchini
Director - non-executive
Member – Walter Vezzosi
Director - non-executive – independent
(*) Appointed Chairman of the Compensation Committee on 1 March 2007.

44 45
In 2006, the Compensation Committee was
responsible for proposing remuneration packages for the
Managing Director, General Manager and directors with
special responsibilities. Following the advice of the
Managing Director, the Compensation Committee
established the criteria for the remuneration of directors
and executives of subsidiaries and proposals in general
for stock compensation plans (stock options and stock
grantings) for the directors and executives of the Bank
and its subsidiaries.
For the purposes of performing its functions, the
Compensation Committee may call upon the services of
external advisors.
In accordance with current regulations, the notes to
the financial statements of Capitalia, Part H-Transactions
with related parties, show the remuneration paid to
directors.
INTERNAL CONTROL COMMITTEE
In 2001, the Board of Directors formed an Internal
Control Committee. The Committee has three nonexecutive
directors, two of whom are independent.
Until December 5, 2006, the Internal Control
Committee was composed as follows:
The Compensation Committee’s recommendations to
the Board of Directors are made in the absence of the
corporate officers involved.
In 2006, the Compensation Committee met once to
formulate recommendations on performance bonuses to
be awarded to the Chairman and the Managing Director.
Given the positive results achieved (including, for
example, the increase in market capitalization, a increase
in revenues significantly greater than that of the overall
market, a decline in bad debts and substandard loans,
the rise in net income) even ahead of the schedule set
out in the 2003-2005 Business Plan despite the very
complex market situation, the Committee voted to award
a performance bonus to the Chairman and the Managing
Director involving a limited increase in overall
compensation received which, excluding that bonus,
remains unchanged. Based on an analysis (conducted
with the assistance of outside consultants) of
compensation packages, both calculations are consistent
with the relevant market benchmarks.
The Chairman and the Managing Director did not
participate in the decision with regard to the
compensation payable to them.
Chairman – Alberto Rossetti
Director - non-executive - independent
Member – Giuliano Tagliavini
Director - non-executive - independent
Member – Carlo Colaiacovo
Director - non-executive
Subsequently, in relation to the appointments made
upon the installment of the new Board of Directors, in
accordance with the new Corporate Governance Code
which provides that the Internal Control Committee shall
be composed of three non-executive directors, two of
whom are independent, and at least one of whom has
adequate experience in the areas of accounting and
finance, the Board appointed a three-member Internal
Control Committee (“ICC”) on 11 December 2006.
The current composition, consisting entirely of nonexecutive,
independent directors, is as follows:
Chairman – Alberto Rossetti
Director - non-executive – independent
Member – Silvio Bianchi Martini
Director - non-executive - independent
Member – Carlo Saggio
Director - non-executive - independent

CAPITALIA
REPORT ON OPERATION
Upon reviewing their professional qualifications, the
Board of Directors determined that Alberto Rossetti and
Silvio Bianchi Martini possessed the necessary
accounting and finance experience.
On 14 December 2006, the ICC re-elected Alberto
Rossetti as Chairman, as position he held during the
2004-2006 term.
The Internal Control Committee’s duties, established by
the Board of Directors starting 29 March 2004, are as follows:
a) to provide support to the Board of Directors in
relation to its internal control responsibilities;
b) to evaluate the actions planned by the head of
internal auditing, and receive periodic reports from such
person;
c) to ascertain, in conjunction with the company’s
directors and statutory auditors, that the accounting
principles in use are adequate and consistent with those
used in the preparation of the consolidated financial
statements;
d) to evaluate proposals that the external auditing firms
make in seeking an engagement with the company,
assess its audit plan, and examine the results set out in its
report and letter of recommendations;
e) report to the Board at least twice a year on the
occasion of the approval of the annual and half-year
financial statements on its activities and the adequacy of
control systems;
f) carry out any other tasks assigned to it by the Board
of Directors, with particular reference to relations with the
external auditors.
another auditor so designated, and the head of
Capitalia’s Internal Audit, who acts as Secretary. The
Managing Director may also participate by invitation. The
Internal Control Committee operates on the basis of its
own set of internal rules and an established work
program for the year.
In 2006, the Committee met 15 times and carried out
work in 21 subject areas. The Committee carried out its
work through meetings with the heads of the
Departments/Areas and/or Group Companies involved
and through in-depth reviews of the documentation
relating to each issue addressed. The Committee also
asked the audit partner of the auditors Ernst & Young,
together with the Head of the Financial Reporting and
Tax Area to attend the meetings held to examine the halfyear
and annual financials.
The committee’s activities as set out in the work plan
for 2006 are described below. The Board of Directors was
informed periodically on the specific activities carried out
and received the required half-year reports.
A) PRELIMINARY EXAMINATION OF THE PERIODIC
AUDIT REPORTS
1. Report on the activity of the Internal Auditing Area
of Capitalia in the second first half of 2005
(approved by the Board of Directors on 20 March
2006).
2. Report of the internal control function for 2005 and
the work program for 2006, in accordance with Art.
57(6) of Regulation no. 11522 adopted by Consob in
implementation of Legislative Decree 58/98
(approved by the Board of Directors on 20 March
2006).
The meetings of the Internal Control Committee are
attended by the chairman of the Board of Auditors or
3. Annual report prepared by the Internal Auditing
Area of Capitalia concerning the subsidiaries in 2005

46 47
(approved by the Board of Directors on 20 March
2006).
4. Half-year report on Consob complaints (pursuant to
Art. 59(4) of Consob Resolution 11522 as amended)
at 31 December 2005 (approved by the Board of
Directors on 19 January 2006).
5. Half-year report on Consob complaints pursuant to
Art. 59(4) of Consob Resolution 11522 as amended)
at 30 June 2006 (approved by the Board of Directors
on 20 July 2006).
6. Report on the activities carried out by Internal
Auditing Area of Capitalia in the first half of 2006
(approved by the Board of Directors on 7 September
2006).
B) PRELIMINARY EXAMINATION OF THE ACCOUNTS
7. Draft 2005 consolidated financial statements. The
Committee performed an examination of the key
aspects of the consolidated quarterly report and the
draft consolidated financial statements at 31
December 2005 and reported its conclusions to the
Board of Directors, which approved the financial
statements at its 20 March 2006 meeting. The
Committee provided comments especially on the
application of the new international accounting
standards (IAS/IFRS) – the same adopted in the 2005
quarterly and half-yearly reports – which obviously
created a lack of continuity with the financial
statements at 31 December 2004. The analysis also
touched on the following points:
– Modification of accounting principles in course of
first time adoption of IAS/IFRS for recognition of
cumulative actuarial profits and losses;
– Net bad debts
– VaR of the trading portfolio
– Item 130 “Impairment writebacks” and inclusion in
“Net interest income”
– Derecognition of financial assets and liabilities.
8. Consolidated half-year report at 30 June 2006.
9. Consolidated half year report at 30 June 2006:
examination of measurement standards for assets in
the financial statements (loans, financial instruments,
equity investments) The Committee examined the
consolidated half-year report at 30 June 2006 and
notes that:
– the same IAS/IFRS were adopted in the 2005
financial statements;
– the report was drafted in accordance with IAS 34
“Interim Financial Reporting” and published in
compliance with Article 81 of the Issuers
Regulations;
– it complied with the provisions of IAS 27, 28 and 31
with regard to the scope of consolidation;
– account was taken of the requirements stated in
CONSOB Communication DEM/6064293 of 28
July 2006.
In addition, in-depth examination was made of the
standards to be followed in defining the consolidation
area, the exposure of equity investments in the
financial statements as well as the measurement
standards for loans and bad debts and the level of Net
VaR of Capitalia’s trading portfolio at 30 June 2006.
C) EXAMINATION OF THE PROPOSED ENGAGEMENT
OF THE AUDITING FIRM
10. The Committee approved the proposal to re-engage
Reconta Ernst & Young to audit Capitalia’s individual
and consolidated financial statements for the years
2006-2011.

CAPITALIA
REPORT ON OPERATION
D) SPECIFIC EXAMINATIONS REGARDING THE INTER-
NAL CONTROL SYSTEM
11. Capitalia’s Finance Area activities
In examining the activities of Capitalia’s Finance Area,
the Committee looked at:
– The Finance Area’s mission and organizational
structure
– Portfolios under management
– Operational limits and Murex
– Funding and ALM
Particularly close examination was made of the daily
monitoring of the operational limits, the use of the
Murex platform introduced in 2004-05 for the front
and middle office, total funding volumes recorded in
2005 and the reduction in the cost of funding.
12. New Corporate Governance Code for Listed
Companies
In the first half of 2006, the Committee performed a
preliminary analysis concerning the features of the
new Corporate Governance Code for Listed
Companies, focusing on the innovative aspects of the
Code, especially regarding the impact on the internal
control system and the Internal Control Committee’s
composition, role, operation and duties.
13. Capitalia Service JV
During the year, the Committee conducted further
examination of the operations of Capitalia Service JV
(previously analyzed by the ICC in 2004 and 2005)
concerning:
– Main results achieved by the joint venture in 2005
– 2006 budget objectives
– Performance of the Trevi portfolios
– Banca di Roma and Capitalia portfolios
The Committee positively viewed the development
of the operating platform in terms of governance,
loan management and support.
14. Capitalia Informatica S.p.A.
The Committee performed further examination of
the operations of Capitalia Informatica S.p.A.
(previously analyzed by the ICC in 2005) particularly
concerning the organizational structure, ongoing
activities and risk control mechanisms.
The Committee verified the completion of the
organization model, previously considered “in
process, simultaneous with the development of
the convergence plan”, following the convergence
of the information systems of the three retail
banks.
15. Activities of Capitalia Solutions
The Committee examined the following items in
detail:
– Management model for the Banking Group’s
operations
– Operations of Capitalia Solutions
– Compensation system.
A particularly close examination was conducted of
the centralization within Capitalia of ownership of
property held by the main Group banks, and, within
Capitalia Solutions, of non-core operations,
management of purchasing of goods and services
and property and facility management.
16. Basle 2 Project: progress report
The Committee analyzed the progress of the Basle 2
project.
The ICC noted that, under the regulations, the Board
of Directors plays a significant role in assessing the
three levels of the control system (line controls,
internal validation, internal auditing).

48 49
17. Lending Committee operating method
The ICC examined the work of the Lending
Committee for compliance with the principles of
collegiality and independence. The ICC praised the
procedures implemented, in light of the positive
results achieved and the adherence to the
instructions given by the Bank of Italy. It
recommended that the practices adopted be
codified in the Corporate Rules in order to better
preserve the collegiality and the full independence
of the members of the Committee.
18. Management of large exposures at the Group level
The ICC examined the credit policy concerning large
exposures and the related reporting from the
competent bodies of the subsidiary banks. Further
investigation was also made into the management of
credit risk exposures by customer macro-segment.
19. Credit risk: granting, managing, monitoring and
controlling
The ICC examined in particular the loan
disbursement processes (with respect to the current
organizational model in the retail banks) and loan
monitoring (with respect to methods of monitoring
performance risk and systematic monitoring for
various customer segments). The Committee noted
positively that, two years after its initial examination
of the issue, the Lending Policies line has carried out
considerable work in preparing and fine-tuning
instruments and processes. This has led to very
significant improvements in the efficiency of the
processes and in the results achieved.
20. Retail activities and the validity of Chinese walls
erected
The Committee reviewed the ongoing project to
rationalize and simplify the operating structures and
business models of the Banking Network and of
Capitalia Asset Management (CAM) and to
restructure the range of securities portfolio products
(GPM). Therefore, the Committee examined the
measures taken by Capitalia to manage conflicts of
interest in placements made through the banking
network including FinecoBank, verifying that specific
Chinese walls have been erected with regard to these
processes.
21. Risk and ALM Committee
The Committee examined the role, operations and
activities of the Risk and ALM Committee within the
context of the risk governance strategic macroprocess,
focusing on the following items:
– standards and role of the parent company in risk
governance
– strategic framework and information base
– CRALM, Risk and ALM Committee
– Second Pillar, Internal Capital Adequacy
Assessment Process (ICAAP).
SUPERVISORY BODY – LEGISLATIVE DECREE 231/2001
At its meeting of 29 March 2004, the Board of
Directors approved the creation of a “Supervisory Body”
charged with verifying compliance with the provisions of
Legislative Decree 231/2001 (administrative liability of
legal persons) and reconfirmed its composition on 11
December 2006.
The Supervisory Body is composed of:
– the Chairman – who is not a member of the Capitalia
Group’s management bodies Renato Granata
(President Emeritus of the Constitutional Court and
Honorary First Adjunct President of the Court of
Cassation);
– the head of the Capitalia Internal Auditing Area;
– the head of the Capitalia Legal and Corporate Affairs
Area.
The Chairman of the Board of Auditors or a person
delegated by him also participate in meetings of the

CAPITALIA
REPORT ON OPERATION
Body. The functions of secretary are performed by an
executive from the Internal Auditing Area.
The Supervisory Body was charged with the following
duties:
a) assessing the appropriateness of the Model for
preventing the offences referred to in Legislative
Decree 231/2001;
b) monitors compliance with the procedures set out in
the Model on the basis of the reports to be
submitted by function managers;
c) develop proposals for the Board of Directors for
updates and adjustments to the documentation if
they should prove necessary;
d) express a reasoned opinion to the Managing Director
regarding proposed disciplinary measures taken by
Bank units in response to violations;
e) draft reports to the Board of Directors and the Board
of Auditors for evaluations of conduct not in
conformity with the Model by directors, statutory
auditors and senior management;
f) draft a six-monthly report on its activity for the Board
of Directors;
g) transmit the above report to the Board of Auditors.
The Supervisory Body’s operations are governed by
specific rules.
The Supervisory Body met 13 times in 2006.
During the period, the Board of Directors and the
Board of Auditors received the scheduled half-year
reports on the activities carried out by the Supervisory
Body.
In 2006, the Supervisory Body took an active part in
revising the organization and management compliance
model (hereinafter, the “Model”) approved by the Board
of Directors on 29 March 2004 and 13 October 2005, in
light of the new laws expanding the group of offenses
relevant under Legislative Decree 231/2001.
In exercising the powers granted it by the Board, the
Supervisory Body also consulted an external legal expert
for a general examination of the adequacy of the current
Model. The in-depth examination and analysis performed
showcased the need for specific actions that were
undertaken by the competent structures. The new
version of the Model was therefore approved by the
Board of Directors on 19 March 2007.
Supervisory Body also continued to pursue activities
to provide greater substance and form to the powers
transferred by Legislative Decree 231 and by the Board
of Directors, especially with regard to the notification
requirement.
Moreover, the Body adopted internal conduct rules
with regard to a system for reporting facts or information
related to employee conduct that violates the provisions
of Legislative Decree 231/2001, and it identified precise
“Information flow to the Supervisory Body”.
Therefore, the Body decided that department heads
should send a six-monthly report concerning the
knowledge of facts and/or conduct that could indicate
the commission of one or more offenses or administrative
violations under Legislative Decree 231/2001.
Within the context of the work plan approved by the
Supervisory Body, the Internal Auditing Area of Capitalia
was charged with conducting, with regard to a “231
sensitive process”, a review of a unit in order to analyze the
organizational and procedural safeguards adopted to
prevent conduct giving rise to the offenses set out in the
decree. From the activity carried out, no conduct was found
that would violate the provisions established in the Model.
During the year, the Supervisory Body also organized
a “231 Convention”, held in Rome on 19 October 2006,
for all the members of the supervisory bodies and the
chairmen of the boards of auditors of the Capitalia
Group, in order to harmonize methodologies and

50 51
standardized methods for applying the provisions of
Legislative Decree 231/2001.
The Managing Director also attended, opening the
proceedings.
A copy of the Report of the Chairman of the
Supervisory Body, discussed during the meeting, was
distributed to all participants and is available on
Capitalia’s intranet site.
From an organizational perspective, the system
follows the rules that govern the functioning of the
company (bylaws, corporate rules and delegated
powers).
These essential components are complemented by a
series of specific organizational solutions that:
assure the necessary separation between operational
and control functions, so that conflicts of interest do not
arise in the assignment of responsibilities;
INTERNAL CONTROL SYSTEM
The internal control system is designed to bring
effectiveness and efficiency to company processes, ensure
the reliability and integrity of accounting and operational
information and, more generally, ensure that the
operations carried out by the Bank comply with the law,
supervisory regulations and internal rules and procedures.
Responsibility for the system lies with the Board of
Directors, which has set out general guidelines and
periodically verifies that the system continues to serve its
purpose, and is functioning properly.
The system is made up of the following essential
components:
are capable of adequately identifying and monitoring
all the risks that have been or may be taken on by the
various operating divisions;
establish control activities at each operating level,
and unambiguously identify where duties and
responsibilities lie;
guarantee the reliability of information systems and
the adequacy of the procedures for reporting to the
various levels of management that have been entrusted
with control functions;
ensure that any anomalies encountered are promptly
brought to the attention of the appropriate level and
dealt with immediately;
line controls to ensure the correct performance of
operations;
risk management controls, which are used to help
develop methodologies for risk measurement and verify
compliance with the limits set for the various operational
units;
ensure that all operational events are recorded and,
especially, that each operation is recorded in sufficient
detail.
Apart from the Board of Directors and the Board of
Auditors, the chief corporate figures with responsibilities
relating to the internal control system are:
internal auditing activities, which are designed to
detect irregularities and violations of procedure or rules,
as well as to evaluate the system of internal controls in
general.
the Managing Director, who identifies corporate risks
and submits them for examination to the Board of
Directors, and also implements the instructions of the
Board relating to internal controls;

CAPITALIA
REPORT ON OPERATION
the Internal Control Committee, whose functions and
rules of procedure are described above (see section on
Internal Control Committee);
the head of the Internal Auditing Area (the person in
charge of internal controls), who periodically reports to
the Managing Director, as well as to the Internal Control
Committee and the Board of Auditors.
Specifically, the head of Internal Auditing is
responsible for:
assessing the adequacy of the system of internal
controls, constantly checking that operations are being
conducted normally and that the risk profiles of each
subsidiary remain within bounds;
monitoring the general level of corporate risk by
conducting analyses of each type of risk (credit, market,
operational);
regarding the Bank and the Group, with a specific
emphasis on price sensitive information. Price sensitive
information is identified using appropriate criteria
designed to ensure maximum transparency and
disclosure of the information in accordance with the rules
envisaged by the relevant procedure.
Following the adoption of the new regulations on
market abuse (Law 62/2005), the Managing Director
issued a directive containing the Group’s internal rules on
the processing of all insider information and its public
circulation.
A centralized list of persons who, by virtue of the work
or professional activities or of the duties they perform,
have access to inside information was also created to be
held by the Parent Company.
Specifically, with regard to public disclosure of inside
information, the directive:
verifying compliance with internal rules and external
instructions (issued by the Bank of Italy and public
regulators);
ensuring that the mechanisms for the exchange of
information among Group companies are working
properly;
carrying out periodic and/or extraordinary
inspections of the companies in the Group;
eliminating any deficiencies in the control systems of
the Group and individual Group companies, and
eliminating any irregularities found in operations.
defines confidential information and provide a list of
examples of inside information;
establishes the roles and responsibilities of the
various structures involved in the disclosure process;
establishes operating procedures to be implemented
reporting inside information within the Group;
establish operating procedures for disclosing inside
information;
establish rules for complying with confidentiality
requirements.
CONFIDENTIAL INFORMATION
The same directive, with respect to the list of insiders,
undertakes to:
In April 2001, the Board of Directors approved an
internal procedure for handling confidential information
establish methods for identifying persons with access
to inside information;

52 53
establish the roles and responsibilities of the various
structures involved in the list management process;
Below is a summary of the essential points of the new
regulations:
establish operating procedures that the structures
involved in the process must follow for adding to the list.
CODE OF CONDUCT ON INTERNAL DEALING
in accordance with the law, the following relevant
persons were identified: the Directors, Auditors, the
Secretary of the Board of Director, the General Manager,
the Assistant General Managers, the Deputy General
Manager and the heads of Capitalia’s lines and areas;
At its meeting on 19 December 2002, the Board of
Directors approved with effect from 1 January 2003 a
code of conduct on internal dealing in compliance with
the regulations established by Borsa Italiana, which
provided for the adoption of procedures for the
disclosure to third parties of information on
transactions in financial instruments carried out by
persons whose position has given them access to
relevant information.
Certain provisions of the code of conduct were more
stringent that those issued by Borsa Italiana in order to
provide the market with timely, complete information.
As stated above, following the adoption of the new
Community regulations on market abuse in 2004 (Law
62/2005), a law was passed requiring disclosure to
Consob and the public of transactions carried out by
“relevant persons” and by persons closely associated
with them involving financial instruments from issuers or
other related financial instruments.
As a result, the internal dealing rules contained in
Borsa Italiana regulations were repealed as from 1 April
2006, the date on which the new regulations came into
force, as was the related Code of Conduct.
In implementing the new regulations, Capitalia issued
directive defining, for the entire Group, the process of
providing notice of transactions involving shares or
related financial instruments of the Capitalia Group
carried out by relevant persons.
transactions involving a total of less than €5,000 for
the entire year do not have to be reported;
a prohibition on transactions conducted during
blocking periods was introduced (15 days prior to Board
approval of the quarterly results and 30 days prior to
Board approval of the draft annual and half-year financial
statements).
The Company publishes the text of the directive and
the notifications made by relevant persons on its website.
TRANSACTIONS WITH RELATED PARTIES
On 27 February 2003, the Board of Director
established the following guidelines for the identification
of transactions with related parties and for the definition
of procedures that will ensure that transactions with
related parties comply with the criteria of substantive and
procedural fairness while guaranteeing the necessary
operational flexibility.
In line with the Corporate Governance Code, where
directors have an interest in a transaction with a related
party they shall provide any necessary details regarding
the interest and abandon the Board Meeting when the
issue is discussed.
For atypical, unusual or especially significant
transactions, special attention shall be devoted to
ascertaining that the transactions are carried out on

CAPITALIA
REPORT ON OPERATION
appropriate terms, meaning terms that would have
presumably been agreed between non-related parties.
For transactions for which comparison with standardized
terms and conditions is difficult, the Board of Directors or
the competent Group units shall avail themselves of the
assistance of independent experts. Such experts shall be
selected from among persons of recognized experience
and skills in the area involved and their independence
and the absence of conflicts of interest shall be carefully
assessed.
In line with the decisions of its Board of Directors, in
June 2003 the parent company issued a directive to
regulate the operational procedures that Group
companies must apply for these transactions.
The directive, “Transactions with Related Parties,
Intragroup Transactions and Atypical and/or Unusual
Transactions” is based on a development of three
essential rules that must be applied in the event of
“critical” transactions:
1. atypical or unusual transactions with related parties
must always be approved in advance by the Board of
Directors;
to regulate the flow of information so that
transactions may be systematically logged and accurately
represented when the shareholders of the parent
company scrutinize its financial data.
In the light of the experience acquired after the
directive came into force, the parent company prepared
its own internal regulation, the purpose of which is to:
set out in detail the duties and responsibilities of the
internal structures of Capitalia for the management of
these transactions;
document the specific assessment procedures to
ensure transparency in the decision-making process
regarding the appropriateness of the envisaged terms of
the transactions;
clearly identify which control bodies are responsible
for conducting such assessments;
perfect the transparency of the decision-making
process by making arrangements for the periodic
delivery of detailed information to the Capitalia Board of
Directors;
2. transactions with related parties must always be
approved by the board of directors of each of the companies
involved, or else by a body appointed by the same;
3. as regards intragroup transactions, which are by their
very nature transactions with related parties, a size
threshold must be set. Intragroup transactions that
exceed such size thresholds must receive prior approval
from Capitalia’s Board of Directors (the same as for
atypical and/or unusual transactions).
define the size threshold for intragroup transactions,
as envisaged in the guidelines approved by the Board and
the directive. The thresholds and the manner in which
they are applied are categorized by transaction type.
These measures will make it possible to balance the
need to bring potentially critical transactions (such as
those between related parties) to the attention of senior
decision-makers against the need to maintain a
streamlined model of operation and decision-making.
The purpose of the directive is:
to ensure that Group companies follow principles of
transparency and integrity as part of their policy of sound
and prudent administration;
The regulation also put in place a specific evaluation
protocol for certain operations such as intragroup
transactions, financial operations and the supply of
specialist services that, owing to their nature and the

54 55
variability of the market, require swift decisions. Without
prejudice to the obligation to inform the Board of
Directors at a later date, the protocol allows the
management of the companies involved to determine
whether the conditions are such that the transaction may
be deemed not “atypical” or “unusual.”
Specific information is provided on transactions with
related parties in 2006 in the notes to the financial
statements, Part H - transactions with related parties, in
the statutory and consolidated financial statements.
RELATIONS WITH SHAREHOLDERS
AND INSTITUTIONAL INVESTORS
The Bank devotes special attention to its relations
with its shareholders, institutional investors and
investors in fixed-rate securities, and to ensuring the
timely, accurate communication of details of Group
strategies and operations market and stakeholders, in
accordance with the procedures for the disclosure of
corporate documents and information to third parties.
For this purpose, and to ensure greater transparency of
information on Group strategies and operations, it was
decided to form an Investor Relations Area, which is
charged with handling relationships with the financial
community in order to raise the Group’s profile on
national and international markets, and manage
relations with investors interested in the performance
of securities issued by Group companies, as well as
with rating agencies and financial analysts specifically
tasked with examining the performance of these
securities.
once or twice a year). This past year specifically, the rating
agencies favorably assessed the progress made by the
Group in terms of productivity, financial soundness and
improvement in credit quality. Since 2007, all three
international rating agencies, (Fitch Ratings, Moody’s
Investors Service and the Standard & Poor’s Corporation),
following the rating assignment made by Standard &
Poor’s, have had the same long-term opinion on
Capitalia, giving it the equivalent of an “A” rating with a
stable outlook.
The Internet is an extremely important tool for
the Group for providing the market with timely and
accurate information. The parent company’s website
(www.capitalia.it) contains a wealth of documentation
providing economic and financial information and
corporate governance information of interest to most
shareholders and bondholders. These documents are
also rapidly translated into English so that they may be
accessible to a larger portion of the financial community.
Finally, the Investor Relations Area has an e-mail address
(investor.relations@capitalia.it) to which institutional
investors and financial analysts may apply for further
information regarding the strategies and/or operating
performance of Capitalia and the Capitalia Group.
Based on its knowledge about the financial
community, the Investor Relations Area, in order to
provide the Board of Directors with timely information on
shareholder developments and market perception of the
Capitalia Group, drafts a three-monthly report on
financial communication and market perception for the
Managing Director and Board of Directors (generally
after the main roadshows).
Investor Relations provides a constant flow of timely
communication through press releases and meetings
with the financial community some of which are open to
the public (also attended by the press) and other that are
more private (without the press), as well as due diligencetype
meetings with rating agencies (the latter generally
Relations with shareholders, which are especially
intense in the period before Shareholders’ Meetings, the
Investor Relations Area works with the Legal and
Corporate Affairs Area – Corporate Affairs Unit to
facilitate the broadest possible participation of
shareholders at the Shareholders’ Meeting.

CAPITALIA
REPORT ON OPERATION
The Corporate Affairs Department provides an e-mail
address for shareholders who want information and
documentation: soci@capitalia.it.
SHAREHOLDERS’ MEETINGS
Extraordinary and Ordinary Shareholders’ Meetings
are governed by Rules approved by the Ordinary
Shareholders’ Meeting on the basis of the specific
attribution of such power in the bylaws. The Rules
establish the procedures for addressing the meeting and
the maximum duration of interventions, voting
procedures and the powers of the Chairman of the
Meeting to maintain order to ensure the proceedings are
conducted properly.
basis of lists submitted by shareholders. The lists must
be deposited in the Company’s registered office at least
10 days before the date of the Shareholders’ Meeting at
the first calling. Each of the lists submitted by
shareholders within the allotted time must be
accompanied by a declaration in which the nominee
accepts the candidacy for the post, and by his own
responsibility declares that no causes of ineligibility or
incompatibility exist, and that he possesses the
qualifications required by law and company bylaws for
the post.
The right to submit a list is reserved exclusively for
shareholders who, either singly or in combination with
other shareholders, are in possession of voting shares
amounting to at least 2% of the share capital.
The text of the Rules is available from the corporate
website and is also reproduced in the appendix to the
printed version of the company bylaws.
The notice calling a Shareholders’ Meeting for the
appointment of statutory auditors must include the text
of these rules.
The bylaws do not require that the shares be
deposited prior to the Shareholders’ Meetings in order to
permit the broadest participation possible of
shareholders.
The Board of Directors feels that the provisions of law
and the bylaws governing the exercise of minority rights
are adequate.
STATUTORY AUDITORS
The meetings of the Board of Auditors can be held via
video- or audio-conference in the manner established in
the Bylaws.
The current Board of Auditors, which was appointed
at the Shareholders’ meeting of 30 April 2004, will
conclude its term of office upon the approval of the
financial statements at 31 December 2006. The
Shareholders’ Meeting set for 18-19 April 2007 shall
appoint the Board of Auditors and its Chairman for the
next three-year term.
The Board of Auditors is composed of three auditors
and three alternates. Minority shareholders have the right
to elect one auditor and one alternate to the Board.
The appointment of the Board of Auditors, which is
governed by Article 20 of the bylaws, is made on the
The Board of Auditors is composed of: Umberto Bertini,
Chairman; Franco Luciano Tutino and Michele Galeotti,
auditors; Francesco Colombi, Stefano Ciccioriccio and
Marcello Mingrone, alternates (4) . The Board does not
include auditors elected by minority shareholders, because
only one list of candidates was submitted.
(4) The list of auditors is also found in Table 2 in the Appendix to the report.

56 57
In 2006, the Board of Auditors met 27 times. All the
members diligently participated both in the meetings of
the Board and in meetings of the Board of Directors and
the Executive Committee.
No member of the Board of Auditors holds the
position of director or auditor in another company listed
on Italian regulated markets.
ETHICS COMMITTEE
In 2006, the Capitalia Group strengthened its
Corporate Social Responsibility (CDR) activities as part of
a long-term strategy to combine the Group’s operational
goals with greater focus on CSR issues.
In this regard, at its meeting of 9 September 2004, the
Board of Directors had established the Ethics Committee
which is charged with:
The Committee has the important job of stimulating a
variety of socially significant activities which are
implemented by the relevant Group departments with
the support of the External Relations and
Communications Area.
The Managing Director convenes the Management
Committee-possibly in its “expanded” form with the
heads of the Group banks-in order to render the Ethics
Committee’s proposals effective.
The Committee met three times in 2006 to examine
Capitalia’s CSR activities. During the meetings, in
addition to providing instruments on further steps to be
taken regarding CSR, the Committee members approved
the initiation and consolidation of specific
projects/initiatives initiated and consolidated, including:
implementation of an annual sustainability reporting
system and preparation of the 2005 Sustainability Report;
defining the Group’s lines of action and policies in
the CSR field, indicating the procedures for
disseminating the actions undertaken;
monitoring CSR actions;
reporting periodically to the Board of Directors.
The Ethics Committee, the composition of which was
confirmed by the Board of Directors on 11 December 2006,
is chaired by the Managing Director, Matteo Arpe, and
includes the Capitalia director Paolo Fresco, the General
Manager Carmine Lamanda, the head of Human Resources,
Giuseppina Baffi, and Sebastiano Maffettone, a leading
academic in this field. The Committee’s secretary is Luigi
Vianello, Head of External Relations and Communications.
development of a range of Ethics Cards and
allocation of management fees collected in 2005
(Capitalia AM) for the Ethical Funds to charities;
implementation of environmentally responsible
activities through the creation of a working group with
WWF;
reinforcement of working group with consumer
associations;
updating the Corporate Social Responsibility section
of the Capitalia website.
* * *

CAPITALIA
REPORT ON OPERATION
CAPITALIA S.p.A. TABLE 1: STRUCTURE OF BOARD OF DIRECTORS AND COMMITTEES
Board of Directors Internal Compensation Possible Executive
Control Committee Nomination Committee
Committee
Committee*
Position Members executive non- inde- **** No. of
executive pendent other
*** **** *** **** *** **** *** ****
positions
**
Chairman Cesare Geronzi X 100 2 X (d) 100 – – X –
Deputy Chairman Paolo Savona (a) X X 100 – – – X (e) 100
(2/2) (1/1)
Deputy Chairman Paolo Cuccia (a) X 100 2 – – X (e) 100
(2/2) (1/1)
Managing
Director Matteo Arpe X 100 6 X (d) 100 – – X 91
Director Silvio Bianchi X X 100 4 X 100 X (e) – – –
Martini (a) (2/2) (1/1)
Director Pasquale X 90 4 X (e) – – –
Cannatelli (b) (9/10)
Director Carlo Colaiacovo X 100 5 X (d) 71 – –
(10/14)
Director Roberto Colaninno X 85 7 – –
Director Paolo Fresco X X 93 1 X 100 – –
Director Salvatore Mancuso (a) X X 100 3 – –
(2/2)
Director Alfio Marchini X 87 7 X (e) – – – X (d) 80
(8/10)
Director Gabriel M. Marino X 100 – – – X (d) 100
(10/10)
Director Paolo Mariotti X X 87 1 – –
Director Ahmed A. Menesi X X 47 – – –
Director Ernesto Monti (c) X 100 3 – – X (e) 100
(4/4) (1/1)
Director Massimo Pini (a) X 100 6 – – X (e) 100
(2/2) (1/1)
Director Alberto Rossetti X X 93 2 X 100 – –
Director Carlo Saggio X X 100 – X (e) 100 – –
(1/1)

59
Board of Directors Internal Compensation Possible Executive
Control Committee Nomination Committee
Committee
Committee*
Position Members executive non- inde- **** No. of
executive pendent other
*** **** *** **** *** **** *** ****
positions
**
Director Pierluigi Toti X 87 1 – – X 73
Director Walter Vezzosi (a) X X 100 – X (e) – – –
(2/2)
* Not established – see report.
Number of meetings held during the year
Board of Directors: 11
Internal Control Committee: 15
Compensation Committee: 1
Nomination Committee: –
Executive Committee: 11
Notes:
(a) New Director appointed by the Shareholders on 5 December 2006.
(b) Director as from 20 March 2006.
(c) Director as from 7 September 2006.
(d) Member of the Committee as from 5 December 2006.
(e) Member of the Committee as from 11 December 2006.
** This column shows the number of directorships and auditor posts held by the interested party in other companies of a significant size listed on regulated
markets, including outside Italy, as well as in financial companies, banks and insurance companies. The Corporate Governance Report spells out the details of
these posts.
*** An X in this column indicates that the Board member also belongs to the committee.
**** This columns shows the percentage participation of directors in the meetings of the Board of Directors and Committees respectively.
CAPITALIA S.p.A. TABLE 2 : BOARD OF AUDITORS
Position Members Percentage participation Number of other
in Board of Auditors meetings positions **
Chairman Umberto BERTINI 100 –
Auditor Franco Luciano TUTINO 89 –
Auditor Michele GALEOTTI 100 –
Alternate Francesco COLOMBI – –
Alternate Stefano CICCIORICCIO – –
Alternate Marcello MINGRONE – –
Number of meetings during the year: 27
Indicates the quorum necessary for the submission of lists by minority shareholders for the election of one or more auditors (as per Article 148 of Consolidated Law
on Financial Intermediation): shareholders with voting shares amounting to at least 2% of the share capital.
Notes:
** This column shows the number of directorships and auditor posts held by the interested party in other companies listed on Italian regulated markets. The Corporate
Governance Report spells out the details of these posts.

CAPITALIA
REPORT ON OPERATION
CAPITALIA S.p.A. TABLE 3: OTHER PROVISIONS OF THE CORPORATE GOVERNANCE CODE
System of delegations and operations with related parties
In assigning delegated powers, has the Board of Directors defined:
a) their limits X
b) the manner in which they may be exercised X
c) and the regularity of reporting? X
Has the Board of Directors reserved the right to examine and approve
operations with a particularly significant impact on the income statement,
balance sheet and finances of the company
(including transactions with related parties)?
X
Has the Board of Directors set out guidelines and criteria
by which “significant” transactions may be identified?
X
Are the guidelines and criteria mentioned above described in the report?
X
Has the Board of Directors established procedures for the examination
and approval of transactions with related parties?
X
Are the procedures for the approval of transactions with related parties
described in the report?
X
Procedures for the most recent appointment of directors and statutory auditors
Did the submission of nominations for the post of director
take place at least ten days in advance? X (°)
Were the nominations for directorships accompanied by exhaustive
information about the nominees?
X
Were the nominations for directorships accompanied by indications of the suitability
of candidates to present themselves as independent?
X
Was the submission of nominations for posts as auditors
made at least ten days in advance?
X
Was exhaustive information supplied about the candidates
for appointment of the Board of Auditors?
X
YES NO Brief description of reason
for divergence from
recommendations of Code
Shareholders’ Meetings
Has the company approved Rules for Shareholders’ Meetings?
Are the Rules attached to the Report (or is it shown where they
may be obtained/downloaded)?
Internal Control
Has the company appointed persons in charge of internal control?
Are the persons in charge of internal control free of hierarchical
dependence on the heads of operating areas?
Organizational unit in charge of internal control (as per Article 9.3 of Code)
Investor relations
Has the company appointed a head of investor relations?
Organizational unit and contact details
(address/telephone/fax/e-mail) of Head of Investor
X
X
X
X
Internal Auditing Area
X
Relations Head of Investor Relations of Capitalia S.p.A.
Via Alessandro Specchi n. 16 – 00186 Rome
Tel. 06 6707 0852 Fax 06 6707 0652
e-mail investor.relations@capitalia.it
(°) In accordance with the provision of the new Corporate Governance Code, submission are made fifteen days prior to the date set for the first session of the Shareholders’
Meeting.

60 61
SIGNIFICANT
POST-PERIOD EVENTS
After the close of the year, share capital, equal to
€2,595,439,085 at 31 December 2006, increased by
€942,075 as a result of the exercise of the warrants
granted under the stock option plans for 2002/2008
(250,700 warrants), 2005/2011 (55,000 warrants) and
2003/2009 (636,375 warrants). Therefore, as of 2 March
2007, the share capital of Capitalia S.p.A., fully
subscribed and paid up, totaled €2,596,381,160 and
consisted of 2,596,381,160 ordinary shares with a par
value of €1 each.
Confirming the results achieved by management in
the last four year in implementing the ambitious plan
for organic growth, on 17 January 2007 Standard &
Poor’s assigned Capitalia S.p.A. a long-term rating of
“A” and a short-term rating of “A-1”. The outlook
remained stable.
At its meeting of 22 February 2007 the Board of Directors
voted to submit a proposal to the Shareholders’ Meeting for
a bonus capital increase pursuant to Article 2442 of the Civil
Code by way of the allocation of reserves to capital, with an
increase in the par value of shares from €1 to €1.2.
As regards the outlook for 2007, taking account of the
financial structure of Capitalia, which is typical of a bank
holding company, revenues will be largely formed by
dividends from the Group companies, which are expected
to decrease, partly owing to the transfer of a number of
shareholdings to Capitalia Partecipazioni. Net gains on
assets and liabilities measured at fair value are also expected
to diminish given the non-recurring items recognized in
2006. Costs and writedowns are expected to decrease,
continuing the strengthening of the Bank’s operating
equilibrium, in line with the 2005-2007 Business Plan.

CAPITALIA
REPORT ON OPERATION
ALLOCATION OF NET PROFIT FOR THE YEAR
Net profit for the year 1,446,665,242.04
– Retained earnings 3,787,574.60
Net profit to allocate 1,450,452,816.64
Reserve pursuant to Art. 6.2 of Leg. Decree 38/2005 –3,063,367.84
Pursuant to Article 23 of the Bylaws:
– 5% of net profit for the year to the legal reserve –72,340,000.00
– 50% of net profit for the year to the extraordinary reserve –723,340,000.00
– available to the Board of Directors for donations, assistance, charity and cultural or scientific initiatives
(pursuant to the Bylaw no less than 1% and no more than 3%). –14,500,000.00
– a dividend of €0.22 for each of n. 2.596.491.960 share in circulation. – 571,228,231.20
Retained earnings 65,981,217.60
(*) On Shareholders’ Meeting date, Capitalia does not have treasury stocks.

REPORT OF THE BOARD OF AUDITORS

CAPITALIA
REPORT OF THE BOARD OF AUDITORS
Shareholders,
Pursuant to Article 153 of Legislative Decree 58 of 24
February 1998 as amended, we report on the oversight
activities carried out jointly during the financial year
ending 31 December 2006.
The Board conducted its activities in compliance with
the provisions of law and the instructions issued by the
Bank of Italy and Consob, and with the collaboration of
the Company’s Internal Auditing Area, with which we
maintained regular and close contact.
In implementing our audit program we held a series
of meetings with senior management and the heads of
the various operational areas to obtain information
(supplemented by the examination and discussion of
specifically drafted reports) on issues regarding the
Company.
Informational meetings on developments in strategy
and the implementation of Group programs were held by
the chairman of the Board of Auditors with the Chairman
of the Board of Directors, the Managing Director and the
General Manager. The Board also systematically
informed the Chairman, the Managing Director and the
General Manager of our oversight activities.
We therefore report the results of our oversight
activities, in conformity with the provisions of Consob
communication no. 1025564 of 6 April 2001, as
amended.
Principles of sound administration
The Board constantly monitored compliance with the
principles of sound administration during meetings of the
Board of Directors and the Executive Committee,
validating the legitimacy of the manner in which they
were called and of the resolutions adopted, and in
meetings with the heads of the various Company
departments.
On the basis of the information it obtained, the Board
can affirm that the Company undertook no operations
outside the scope of its corporate purpose or in conflict
with the resolutions adopted by the Shareholders’
Meeting or the Board of Directors, or the provisions of
the Bylaws.
Organizational structure
The Board of Auditors continued its systematic
monitoring of the organizational structure of the
Company. The Board noted the major changes
implemented to adjust structural arrangements to the
new operational requirements of the system, which
regarded in particular:
the reorganization of risk management activities in
application of the Basle 2 rules. In line with the
instructions of the Bank of Italy, the area responsible
for developing risk measurement, control and
management models was functionally separated from
the structures that use those models. The Parent
Company’s risk management function was also
assigned responsibility, for the internal validation of
rating systems, again in application of the instructions
of the Bank of Italy;
the development of IT procedures for the various
operating segments, as well as the implementation of the
initiatives envisaged in the business continuity plan;
the centralization of management of real estate used
in operations under Capitalia Solutions, with the
adoption of property and facility management models
and procedures.
At it now stands, the changes in organizational
arrangements appear to be appropriate to the
complexity and specific features of the system of
corporate functions, which are in any case evolving
continuously.

64 65
Internal control system
The Board constantly monitored the activity of the
Internal Auditing Area. Special attention was devoted to
examining the periodic reports prepared for the Board of
Directors as well as the specific quarterly reports drafted
for the Board of Auditors.
It also examined the reports of the findings of
inspections conducted as part of Group control activities.
In 2006 the Area’s most significant commitment
regarded the implementation of the operating changes
in preparation for the application of Basle 2 rules.
On the basis of the reports received and enquiries
conducted, the Board expresses its approval of the
activity carried out by Internal Auditing in 2006.
Council of 19 July 2002, and in line with the provisions of
Bank of Italy circular no. 262 of 22 December 2005.
Instructions to subsidiaries
In November 2006 the Company issued the new
Capitalia Group Rules, which consolidates the regulations
governing the activities and operational mechanisms of
the Group into a single text.
It also provided its subsidiaries with instructions on
compliance with statutory reporting requirements.
Corporate governance rules
As noted, in 2006 the Company continued to
strengthen its governance arrangements in the context of
the corporate rationalization and organization process
initiated last year.
The Board, in the person of its chairman or other auditor
designated by the chairman, also participated in the
meetings of the Supervisory Body established pursuant to
Legislative Decree 231/2001, noting the positive approach
to the complex issues raised in the legislation. Internal
Auditing also made an especially important contribution in
this area as well.
The administrative and accounting system
The Board examined the appropriateness of the
administrative and accounting system and its reliability in
accurately representing operational events, noting
additional organizational and procedural improvements.
The financial statements at 31 December 2006 were
prepared in accordance with the recognition and
measurement criteria established by the International
Financial Reporting Standards and International
Accounting Standards issued by the International
Accounting Standards Board (IASB), as endorsed by the
European Commission in accordance with the
procedures defined under Article 6 of Regulation (EC) no.
1606/2002 of the European Parliament and of the
As regards the rules of conduct envisaged in the
Corporate Governance Code for listed companies,
which Capitalia has adopted since 2003, the Internal
Control Committee was especially active. The Board, in
the person of its chairman or other auditor designated
by the chairman, participated in all of its meetings.
Verification of the correct application of the criteria
and procedures for assessing the independence of
directors
In view of the fact that on 12 October 2006 the
Board of Directors of the Company voted to apply the
independence criteria for directors established in the
Corporate Governance Code published by Borsa
Italiana in March 2006, the Board of Auditors,
pursuant to Article 3.C.5. of the Code, verified the
application of the criteria and procedures for
assessing the independence of the directors
appointed by the Shareholders’ Meeting of 5
December 2006. Following its checks, the Board can
affirm that the criteria and procedures were applied
correctly and therefore confirms that the directors
Silvio Bianchi Martini, Paolo Fresco, Salvatore

CAPITALIA
REPORT OF THE BOARD OF AUDITORS
Mancuso, Paolo Mariotti, Ahmed A. Menesi, Alberto
Rossetti, Carlo Saggio, Paolo Savona and Walter
Vezzosi can be considered independent, as
determined and publicly announced by the Board of
Directors at its meeting of 11 December 2006.
Significant financial transactions.
The Board examined the main operations carried out
by the Company notified to it during meetings of the
Board of Directors, the most significant of which were
those associated with the repositioning of the equity
investment portfolio with the creation of Capitalia
Partecipazioni and Capitalia Merchant.
For details on such operations, please consult the
Directors’ report on operations.
2007, did not call attention to facts requiring specific
mention.
We held periodic meetings with the external auditing
firm, during which we exchanged information relevant to
the performance of our respective functions.
In addition, the external auditing firm did not report
any facts deemed to be censurable pursuant to Article
155(2) of Legislative Decree 58/1998.
Engagements of the auditing firm and persons
associated with it
On the basis of the available information, we report
the following additional engagements awarded to the
auditing firm and the related costs:
All significant financial transactions were conducted in
compliance with the provisions of law and the bylaws.
examinations of the financial statements of Elettra
SpA, at a cost of €12,672;
The Board found no operations representing a potential
conflict of interest.
It also found no manifestly imprudent or risky
operations or transactions that might jeopardize the
capital of the Company.
Atypical, unusual or related-party transactions.
As discussed in the Directors’ report on operations
and the notes to the financial statements, the Board of
Auditors notes that the Company undertook ordinary
transactions with related parties.
issue of a comfort letter of 21 February 2006
regarding the issue of €750 million of Floating Rate
Notes due 2011, at a cost of €25,068;
issue of a comfort letter of 7 April 2006 regarding
the issue of €400 million of Subordinated Lower
Tier II Floating Rate Notes due 2016, at a cost of
€25,080;
issue of a comfort letter of 7 July 2006 €500
million of Floating Rate Notes due 2010, at a cost of
€25,440;
In line with directives issued by Capitalia, the
reporting system for this purpose ensures that such
transactions are disclosed in an appropriate and
systematic manner.
Relations with the auditing firm.
We verified that the report of the external auditing
firm on the financial statements for 2006, dated 2 April
issue of a comfort letter of 22 September 2006
regarding the issue of €1 billion of Floating Rate Notes
due 2009, at a cost of €25,176;
issue of a comfort letter of 4 October 2006 regarding
the Base Prospectus prepared by Capitalia SpA for the
€20 billion Euro Medium Term Note program, at a cost
of €25,800;

66 67
issue of a comfort letter of 7 November 2006
regarding the issue of €1 billion of Senior 5-year Floating
Rate Notes due 2011, at a cost of €26,280;
English translation services (statutory and
consolidated financial statements, half-year report), at a
cost of €57,600.
As regards engagements of persons connected by
on-going relations with the external auditing firm, we
report that on the basis of the available information:
“Studio Legale Tributario” performed due diligence
assistance – tax review work for the companies of the
Elettra S.p.A. group, at a cost of €13,728;
“Studio Legale Tributario” performed professional
services in support of the requirements envisaged under
the Qualified Intermediary Agreement, at a cost of
€19,594.56;
Opinions issued pursuant to law during the year
We issued opinions pursuant to law with regard to the
remuneration of directors with special duties and well as
opinions pursuant to Article 136 of the 1993 Banking Law
concerning obligations contracted by corporate officers
and by companies controlled by the latter.
Meetings of the Board of Directors, the Executive
Committee, the Board of Auditors, and the
Supervisory Body referred to in Legislative Decree
231/2001
During the year, the Board of Directors met 15 times,
while the Executive Committee met 11 times. The Board
of Auditors met 27 times, while the Internal Control
Committee met 15 times. The Supervisory Body held 13
meetings.
The Board of Auditors participated in all such
meetings, with the exception of one meeting of the
Supervisory Body.
“Ernst & Young Financial-Business Advisors S.p.A.”
performed professional services in respect of the
preparation and translation of the 2005 Sustainability
Report of the Capitalia Group, at a cost of €26,400;
“Ernst & Young Financial-Business Advisors S.p.A.”
provided professional assistance for the €Savings Law”
project regarding the scoping and master plan 262/05, at
a cost of €75,600.
Concluding remarks
Based on the controls conducted, we can assure you
that the Company conducted its operations in 2006 in
compliance with the provisions of law and the bylaws,
and that the Board of Auditors found no omissions or
censurable facts.
No irregularities pursuant to Article 149(3) of the
Legislative Decree 58/1998 were found.
Complaints pursuant to Article 2408 of the Civil Code
and other complaints
A shareholder reported alleged violations at the
Shareholders’ Meeting of 5 December 2006 concerning
the appointment of the Board of Directors.
The Board thoroughly examined the matter and found
no irregularities in the manner in which the Meeting was
conducted and the resolutions adopted, promptly
notifying the shareholder involved of the findings.
In view of the foregoing, we recommend that you
approve the financial statements for the year ended
31 December 2006 as prepared by the Board of
Directors.
In closing, we would like to express our approval of
the performance of the Company’s senior management
and the significant organizational and operational
progress achieved, which has markedly improved the
general performance level of the Capitalia Group.

CAPITALIA
REPORT OF THE BOARD OF AUDITORS
* * *
Shareholders,
With the approval of the financial statements for the
year ended 31 December 2006 the term of the Board of
Auditors you appointed at the Shareholders’ Meeting of
30 April 2004 has expired.
We also announce that on 21 March 2007 Gabriel M.
Marino resigned from the Board of Directors.
You are therefore called upon to appoint a new Board
of Auditors and a director, whose term will end with that
of the other directors currently in service.
Rome, 2 April 2007
THE BOARD OF AUDITORS
Umberto Bertini – Chairman
Franco Tutino
Michele Galeotti

FINANCIAL STATEMENTS

CAPITALIA
FINANCIAL STATEMENTS
BALANCE SHEET
(amounts in euros) 31 December 2006 31 December 2005
20. Financial assets held for trading 7,558,636,403 10,629,407,946
30. Financial assets designated at fair value 43,308,484 24,821,638
40. Financial assets available-for-sale 2,467,953,957 3,950,783,318
50. Financial assets held-to-maturity 791,991,107 791,134,988
60. Loans to banks 39,158,095,476 37,059,540,666
70. Loans to customers 2,842,835,666 3,506,932,403
80. Hedging derivatives 285,648,752 486,028,934
100. Equity investments 12,170,658,630 10,983,076,009
110. Tangible assets 2,096,651,082 247,388,352
120. Intangible assets 22,446,480 8,613,940
of which:
– goodwill 17,834,689 –
130. Tax assets 2,608,864,142 2,689,360,222
a) current 1,485,500,480 1,486,475,410
b) deferred 1,123,363,662 1,202,884,812
140. Non-current assets and groups
of assets being divested – 4,107,640
150. Other assets 1,004,368,114 921,422,082
Total assets 71,051,458,293 71,302,618,138

70 71
Liabilities and shareholders’ equity
(amounts in euros) 31 December 2006 31 December 2005
10. Due to banks 27,951,869,671 30,542,051,828
20. Due to customers 260,925,501 3,954,883,953
30. Debt securities issued 27,709,761,906 22,426,621,121
40. Financial liabilities held for trading 4,847,182,083 4,842,968,712
60. Hedging derivatives 138,141,377 87,174,826
80. Tax liabilities 360,904,161 156,293,978
a) current 121,158,120 20,120,502
b) deferred 239,746,041 136,173,476
100. Other liabilities 706,236,735 1,034,411,625
110. Staff severance pay 32,054,666 29,445,687
120. Provisions for liabilities and contingencies 361,424,672 311,627,469
a) retirement and similar liabilities 91,766,511 90,899,369
b) other provisions 269,658,161 220,728,100
130. Revaluation reserves 54,109,386 612,786,635
160. Reserves 1,203,969,649 369,430,887
170. Share premium account 3,382,774,159 3,828,186,698
180. Share capital 2,595,439,085 2,511,134,376
190. Treasury stock (-) – (865,082)
200. Profit for the year 1,446,665,242 596,465,425
Total liabilities and shareholders’ equity 71,051,458,293 71,302,618,138

CAPITALIA
FINANCIAL STATEMENTS
INCOME STATEMENT
(amounts in euros) 2006 2005
10. Interest income and similar revenues 1,502,879,099 1,354,976,242
20. Interest expense and similar charges (1,875,549,470) (1,796,839,862)
30. Net interest income (372,670,371) (441,863,620)
40. Commission income 89,186,477 102,014,676
50. Commission expense (103,814,827) (89,570,359)
60. Net commissions (14,628,350) 12,444,317
70. Dividends and similar income 1,152,395,746 989,340,792
80. Net gain (loss) on trading activities 81,148,241 259,891,788
90. Net gain (loss) on hedging activities (16,804,740) (12,891,332)
100. Gains (losses) on disposal or repurchase of: 731,442,115 (8,974,084)
a) loans 55 (37,953)
b) available-for-sale financial assets 724,244,047 36,151,247
c) held-to-maturity financial assets 84,309 72,918
d) financial liabilities 7,113,704 (45,160,296)
110. Net adjustments of financial assets and liabilities at fair value 1,554,691 3,158,989
120. Total revenues 1,562,437,332 801,106,850
130. Net impairment adjustments of: (22,534,251) (27,115,692)
a) loans 31,753,019 48,220,464
b) available-for-sale financial assets (10,228,852) (33,459,479)
c) held-to-maturity financial assets 1,511,146 (35,722)
d) other financial transactions (45,569,564) (41,840,955)
140. Income from financial operations 1,539,903,081 773,991,158
150. General and administrative expenses: (371,909,241) (343,917,219)
a) staff expenses (156,408,975) (126,063,228)
b) other administrative expenses (215,500,266) (217,853,991)
160. Provisions for liabilities and contingencies (net) (52,815,917) (34,473,566)
170. Net adjustments of tangible assets (29,436,466) (3,374,290)
180. Net adjustments of intangible assets (4,002,149) (6,864,713)
190. Other operating income (expenses) 170,088,372 64,491,468
200. Operating expenses (288,075,401) (324,138,320)
210. Income (loss) on equity investments 24,046,308 (32,003,822)

72 73
(amounts in euros) 2006 2005
240. Gains (losses) on disposal of investments 246,182 2,964,488
250. Profit (loss) before tax on continuing operations 1,276,120,170 420,813,504
260. Income tax for the year on continuing operations 168,810,070 175,651,921
270. Profit (loss) after tax on continuing operations 1,444,930,240 596,465,425
280. Profit (loss) after tax from groups of assets being divested 1,735,002 –
290. Net profit for the year 1,446,665,242 596,465,425

CAPITALIA
FINANCIAL STATEMENTS
STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY IN 2006
(amounts in euros)
Allocation of result
for previous period
Balance at Change Balance Reserves Dividends Change
31/12/2005 in opening at 1/1/2006 and other in reserves
IAS balance uses
Share capital: 2,511,134,376 – 2,511,134,376 – – –
a) ordinary shares 2,511,134,376 – 2,511,134,376 – – –
b) other shares – – – – – –
Share premium account 3,828,186,698 – 3,828,186,698 – – (746,915,624)
Reserves: 369,430,885 – 369,430,885 72,191,219 – 750,586,893
a) income 247,392,933 – 247,392,933 72,191,219 – 6,460,957
b) other 122,037,952 – 122,037,952 – – 744,125,936
of which:
reserve pursuant to Law 266/2005 20,780,976 20,780,976 444,492,042
Revaluation reserves: 612,786,634 – 612,786,634 – – (558,677,248)
a) available for sale 612,786,634 – 612,786,634 – – (561,466,937)
b) cash flow hedges – – – – – –
c) other – – – – – 2,789,689
– Reserve pursuant Law 408/1990 – – – – – 852,491
– Reserve pursuant Law 413/1991 – – – – – 597,138
– Reserve pursuant Law 576/1975 – – – – – 40,874
– Reserve pursuant Law 72/1983 – – – – – 1,299,186
Treasury stock (865,082) – (865,082) – – –
Net profit for the year 596,465,425 – 596,465,425 (72,191,219) (524,274,206) –
Shareholders’ equity 7,917,138,936 – 7,917,138,936 – (524,274,206) (555,005,979)
The decrease of €746.9 million in the “share premium account” is reflected in €444.5 million allocated to the Law 266/05 reserve, €2.8 million to the valuation
reserve (“Other”) and the remaining €299.6 million to the reserve for the purchase of treasury stock (shareholders’ resolution of 20 April 2006).
The increases in share capital and the “share premium account” include €364.5 million in respect of the partial demerger of MCC, €17.2 million in respect of the
exercise of stock options and €4.1 million in respect of the gain on trading in own shares net of tax effects.
The amounts in the line “treasury stock” of the columns “new share issue” and “purchase of treasury stock” represent the value of the purchases and sales of own
shares during the year.

74 75
Equity operations
New share Purchase of Extraordinary Change in Derivatives Stock Profit for Shareholders’
issue treasury dividend equity on own options the year at equity at
stock distribution instruments shares 31.12.2006 31.12.2006
84,304,709 – – – – – – 2,595,439,085
84,304,709 – – – – – – 2,595,439,085
– – – – – – – –
301,503,085 – – – – – – 3,382,774,159
– – – – – 11,760,652 – 1,203,969,649
– – – – – – – 326,045,109
– – – – – 11,760,652 – 877,924,540
465,273,018
– – – – – – – 54,109,386
– – – – – – – 51,319,697
– – – – – – – –
– – – – – – – 2,789,689
– – – – – – – 852,491
– – – – – – – 597,138
– – – – – – – 40,874
– – – – – – – 1,299,186
447,135,907 (446,270,825) – – – – – –
– – – – – – 1,446,665,242 1,446,665,242
832,943,701 (446,270,825) – – – 11,760,652 1,446,665,242 8,682,957,521

CAPITALIA
FINANCIAL STATEMENTS
STATEMENT OF CHANGES IN SHAREHOLDERS’ EQUITY IN 2005 (*)
(amounts in euros)
Allocation of result
for previous period
Balance at Change Balance Reserves Dividends Change
31/12/2004 in opening at 1/1/2005 and other in reserves
IAS balance uses
Share capital: 2,210,351,000 – 2,210,351,000 – – –
a) ordinary shares 2,210,351,000 – 2,210,351,000 – – –
b) other shares – – – – – –
Share premium account 3,112,022,048 – 3,112,022,048 – – (414,505,250)
Reserves: 1,070,291,011 (471,868,732) 598,422,279 (553,836,645) – 575,474,379
a) income 975,162,718 (471,868,732) 503,293,986 (553,836,645) – 535,825,393
b) other 95,128,293 – 95,128,293 – – 39,648,986
of which:
reserve pursuant to Law 266/2005 – – – – – 20,780,976
Revaluation reserves: 160,969,130 324,929,914 485,899,044 – – 126,887,591
a) available for sale – 324,929,914 324,929,914 – – 287,856,721
b) cash flow hedges – – – – – –
c) other 160,969,130 – 160,969,130 – – (160,969,130)
– Reserve pursuant Law 408/1990 2,542,542 – 2,542,542 – – (2,542,542)
– Reserve pursuant Law 413/1991 117,343,366 – 117,343,366 – – (117,343,366)
– Deemed cost of land
and buildings 41,083,222 – 41,083,222 – – (41,083,222)
Treasury stock (12,568,000) – (12,568,000) – – –
Net profit (loss) for the year (371,449,295) – (371,449,295) 553,836,645 (182,387,350) –
Shareholders’ equity 6,169,615,894 (146,938,818) 6,022,677,076 – (182,387,350) 287,856,720
(*) The change in own shares is represented in line with the change carried out in the table for 2006.

76 77
Equity operations
New share Purchase of Extraordinary Change in Derivatives Stock Profit for Shareholders’
issue treasury dividend equity on own options the year at equity at
stock distribution instruments shares 31.12.2005 31.12.2005
300,783,376 – – – – – – 2,511,134,376
300,783,376 – – – – – – 2,511,134,376
– – – – – – – –
1,130,669,900 – – – – – – 3,828,186,698
– (237,889,801) – – – (12,739,325) – 369,430,887
– (237,889,801) – – – – – 247,392,933
– – – – – (12,739,325) – 122,037,954
– – – – – – – 20,780,976
– – – – – – – 612,786,635
– – – – – – – 612,786,635
– – – – – – – –
– – – – – – – –
– – – – – – – –
– – – – – – – –
– – – – – – –
926,011,141 (914,308,223) – – – – – (865,082)
– – – – – – 596,465,425 596,465,425
2,357,464,417 (1,152,198,024) – – – (12,739,325) 596,465,425 7,917,138,939

CAPITALIA
FINANCIAL STATEMENTS
STATEMENT OF CASH FLOWS
Indirect method
(amounts in euros) 31 December 2006 31 December 2005
A. Operating Activity
1. Operations (20.769.807) (1.457.233.183)
– Profit for the year (+/-) 1,446,665,242 596,465,426
– Capital gains/losses on financial assets held for trading
and assets/liabilities carried at fair value (+/-) (808,891,628) (584,172,828)
– Capital gains/losses on hedging assets (+/-) 16,804,741 12,891,332
– Writedowns/writebacks for impairment (+/-) 100,076,543 107,734,541
– Net value adjustments to tangible,
and intangible assets (+/-) 33,438,616 10,239,002
– Net provisions for liabilities and contingencies and other costs/revenues (+) 107,999,797 66,976,004
– Net uncollected premiums (-) – –
– Other uncollected insurance income/charges (+/–) – –
– Unsettled taxes and duties (+) (168,810,070) (175,651,921)
– Net value adjustments of discontinuing operations net of tax effects (+/–) – –
– Other adjustments (+/–) (748,053,048) (1,491,714,739)
2. Liquidity generated/absorbed by financing activity 7,017,615,357 1,625,251,308
– Financial assets held for trading 7,563,775,866 4,669,683,844
– Financial assets designated at fair value 11,768,222 60,071,284
– Available–for–sale financial assets 1,017,399,457 (489,521,385)
– Claims on central banks: demand (2,115,623,803) (1,445,999,588)
– Loans to banks: other loans (847,701,562) (3,682,206,176)
– Loans to customers 614,848,548 2,195,740,208
– Other assets 773,148,629 317,483,121
3. Liquidity generated/absorbed by financial liabilities (5,646,170,908) (911,519,216)
– Due to banks: demand 700,936,552 1,376,349,353
– Due to banks: other payables (3,492,076,203) (5,473,644,014)
– Due to customers (3,694,043,838) 1,493,478,942
– Securities outstanding 5,122,974,635 3,732,859,848
– Financial liabilities held for trading (3,563,168,337) (2,670,242,856)
– Financial liabilities carried at fair value – –
– Other liabilities (720,793,717) 629,679,511
Net liquidity generated/absorbed by operating activity 1,350,674,642 (743,501,091)

78 79
31 December 2006 31 December 2005
B. Investing activity
1. Liquidity generated by:(1) 1,214,554,027 1,279,475,535
– Sales of equity investments 13,966,299 47,681,863
– Dividends received on equity investments 1,103,528,444 906,944,231
– Sale of financial assets held to maturity (2) 37,118,376 208,942,912
– Sales of tangible assets 3,940,908 14,928,974
– Sales of intangible assets – 4,656,630
– Sales of subsidiaries and business units (3) 56,000,000 96,320,925
2. Liquidity absorbed by: (1) (2,066,912,473) (378,548,801)
– Purchases of equity investments (1,752,292,773) (300,977,889)
– Purchases of financial assets held to maturity (23,804,004) (70,429,585)
– Purchases of tangible assets (81,167,128) (3,602,012)
– Purchases of intangible assets (29,492) (3,539,315)
– Purchases of subsidiaries and business units (4) (209,619,076) –
Net liquidity generated/absorbed by investing activities (852,358,446) 900,926,734
C. Funding
– Issue/purchases of own shares 865,082 11,702,918
– Issue/purchases of capital instruments 25,092,928 13,258,789
– Distribution of dividends and other (524,274,206) (182,387,350)
Net liquidity generated by funding (498,316,196) (157,425,643)
D = A+/–B+/– C Net liquidity generated/absorbed during the year – –
RECONCILIATION
31 December 2006 31 December 2005
E) Cash and cash equivalents at start of period – –
D) Total net liquidity generated/absorbed during the year – –
F) Cash and cash equivalents: effect of exchange rate variations – –
G= E+/–D+/–F Cash and cash equivalents at end of period – –
(1) The liquidity generated and absorbed by sales and purchases, respectively, also includes other decreases and increases.
(2) Also includes redemption of debt securities.
(3) Represents payment received for the sale of the subsidiary Capitalia Assicurazioni S.p.A..
(4) The amount breaks down into €204.3 million in respect of the adjustment paid following the partial demerger of the real estate of Banca di Roma, Banco di
Sicilia, Bipop Carire and Capitalia L&F, €5.3 million as the cost of the acquisition of IPSE 2000 S.p.A.; see Part G of the notes to the financial statements
for more information on the latter.

NOTES TO THE FINANCIAL STATEMENTS

CAPITALIA
PART A – ACCOUNTING POLICIES
A.1 – GENERAL INFORMATION
Section 1 – DECLARATION OF COMPLIANCE WITH
INTERNATIONAL ACCOUNTING STANDARDS
As permitted under the optional regime introduced
with Article 4.2 of Legislative Decree 38/2006 for
companies whose securities are listed on regulated
markets of European Union member states, the financial
statements at 31 December 2006 have been prepared in
accordance with the International Financial Reporting
Standards (IFRSs) and International Accounting
Standards (IASs) issued by the International Accounting
Standards Boards (IASB), as well as the related
interpretations issued by the International Financial
Reporting Interpretations Committee (IFRIC), as
endorsed by the European Commission in accordance
with the procedure envisaged in Article 6 of Regulation
(EC) no. 1606/2002 of 19 July 2002. The regulation has
been fully transposed into Italian law following the
enactment of Legislative Decree 38 of 28 February 2005,
which came into force on 22 March 2005. The latter
establishes, among other provisions, that companies
whose financial instruments are listed on regulated
markets must prepare their consolidated financial
statements in conformity with international accounting
standards as from the 2005 financial year, and banks may
also draft their statutory accounts in conformity with
those standards.
The financial statements at 31 December 2006 have
also been prepared in accordance with circular no. 262 of
22 December 2005 issued by the Director General of the
Bank of Italy containing instructions on the format and
rules of preparation of bank financial statements. The
comparative figures are those already published for 2005
and therefore do not include the tables for which the
Bank had chosen to apply the options permitted under
the transitional provisions contained in the Bank of Italy’s
letter no. 14824 of 5 January 2006.
The accounting policies described herein were
applied in preparing the accounts for all the periods
presented in these financial statements.
The presentation currency for these financial
statements is the euro. The balance sheet, income
statement, the statement of changes in shareholders’
equity and the statement of cash flows are presented in
euros, while the notes to the financial statements are
expressed in thousands of euros.
Section 2 – GENERAL PREPARATION PRINCIPLES
The financial statements have been prepared in
accordance with the general principles called for within
the framework for the preparation and presentation of
financial statements endorsed by the IASB in April 2001.
As such, they have been prepared on an accruals basis
and based on the assumption of the organization as a
going concern. The preparation of the financial
statements also took account of the general principles of
the materiality of information and the priority of
substance over form. Each significant category of similar
items is shown separately in the financial statements, as
are items of dissimilar nature or function, unless they are

82 83
of insignificant entity. Neither assets and liabilities nor
revenues and costs have been offset, with the exception
of cases in which it is expressly required or allowed by a
standard or related interpretation.
The financial statements include the balance sheet,
the income statement, the statement of changes in
equity, the statement of cash flows, and related notes,
and are accompanied by the director’s report on
operations.
The balance sheet and income statement are made
up of accounts, sub-accounts, and further details. Items
that have zero balances in both periods presented are
not shown. In the income statement, revenues are
presented as positive numbers without signs and costs as
negative numbers in parentheses.
The notes to the financial statements include the
information required by Bank of Italy circular no.
262/2005, as well as the additional information required
by the IASs and IFRSs.
consolidated financial statements within 90 days of the
close of the financial year in place of a specific financial
report for the fourth quarter of 2006.
Full copies of the latest annual reports of subsidiaries
and associates at 31 December 2006, which will be
submitted by their boards of directors to their respective
shareholders’ meetings by 18 April 2007, will be available
at the Parent Company’s head office. The related reports
of the Board of Auditors and the independent auditing
firm, if applicable, will also be available, as will these
companies’ individual financial statements for the
previous year.
Information regarding the operations and performance
for 2006 of the most important shareholdings is included
in the report on operations accompanying the
consolidated financial statements.
The financial statements have been audited by
Reconta Ernst & Young S.p.A..
Section 3 – EVENTS SUBSEQUENT
TO THE BALANCE-SHEET DATE
In the period between the close of 2006 and the
approval of these financial statements, no significant
events other than those described in the section
“Significant post-period events” have occurred that
could have a significant effect on the Group’s operations
and financial performance.
A.2 – INFORMATION ON THE MAIN ITEMS OF THE
FINANCIAL STATEMENTS
This section presents the accounting policies adopted
by Capitalia in preparing the 2006 financial statements,
broken down into sections concerning the recognition,
classification, measurement, and derecognition of the
various items. Each of these phases also includes an
indication of the related financial effects, where
significant.
Section 4 – OTHER ISSUES
In 2006, as in previous years (in accordance with
Article 82.2 of Consob resolution no. 11971 of 14 May
1999 as amended), Capitalia has provided shareholders
and the market with the company’s draft individual and
1 – Financial assets held for trading
RECOGNITION
Initial recognition of financial assets takes place on
the settlement date for debt and equity securities and on
the signing date for derivatives,

CAPITALIA
NOTES TO THE FINANCIAL STATEMENTS
Initial recognition is at fair value, which is normally equal
to the amount paid or received. In cases in which the price
is not equal to the fair value, the financial asset is
recognized at fair value, and the difference between the
price paid and fair value is recognized through profit or loss.
Derivatives that are embedded in financial instruments
or other contract forms, and which have financial
characteristics and risks that are not correlated with the
host instrument or which have other features that qualify
them as derivative contracts, are recognized separately in
the category of financial assets held for trading, except in
cases in which the host instrument in which they are
embedded is measured at fair value through profit or loss.
Following the separation of an embedded derivative, the
host contract is treated in accordance with the accounting
rules for its own category.
CLASSIFICATION
This category includes financial assets that are held
for trading over the short term, regardless of their actual
form. This includes derivatives with a positive value,
including embedded derivatives that have been
separated from another instrument, that are not part of
an effective hedging relationship.
flows, option pricing models, and values observed in
recent comparable transactions.
For equity securities and related derivatives, if the fair
value obtained by these valuation techniques cannot be
reliably measured, the financial instruments are measured
at cost and adjusted for impairment losses.
DERECOGNITION
Financial assets held for trading are removed from the
balance sheet when the rights to the cash flows have
expired or in the event of other transactions in which the
risks and rewards of ownership of the asset are
transferred. Conversely, if a substantial portion of the
risks and rewards related to the financial asset is retained,
the asset remains on the balance sheet even though legal
ownership of the asset has been transferred.
In cases in which it is not possible to determine
whether substantially all the risks and rewards have been
transferred, the financial asset is derecognized when there
is no longer any control over it. Conversely, if even partial
control is retained the asset remains on the balance sheet
in proportion to the remaining involvement, measured as
the exposure to changes in the value of the asset sold and
to changes in the related cash flows.
MEASUREMENT
Subsequent to their initial recognition, financial assets
held for trading are measured at fair value. The fair value
of financial assets and liabilities is based on the official
prices as of the balance-sheet date for financial
instruments that are listed on active markets. For financial
instruments, including equity securities, that are not
listed on active markets, fair value is determined by
making use of valuation techniques and information
available in the market, such as the prices of similar
instruments traded on active markets, discounted cash
RECOGNITION OF PROFIT AND LOSS
The results of the measurement of financial assets
held for trading are recognized through profit or loss.
2 – Available-for-sale (AFS) financial assets
RECOGNITION
Initial recognition of available-for-sale financial assets
takes place on the settlement date for debt and equity

84 85
securities and on the disbursement date for loans, and is
done at fair value, which is normally equal to the amount
paid or received. In cases in which the price is not equal
to the fair value, the financial asset is recognized at fair
value, and the difference between the price paid and fair
value is recognized through profit or loss. The initially
recognized amount includes income and charges directly
attributable to the transaction.
CLASSIFICATION
This category includes non-derivative financial assets
not classified as financial assets held for trading, financial
assets measured at fair value, financial assets held to
maturity, loans to banks and loans to customers.
More specifically, it includes: equity interests other than
investments in subsidiaries, associates and joint ventures
that are not held for trading; shares in unlisted investment
funds or funds with limited trading volumes; certain bonds,
decided on a case-by-case basis depending on the
purpose for which they are purchased/held.
risks and rewards of ownership of the asset are
transferred. Conversely, if a substantial portion of the
risks and rewards related to the financial asset is retained,
the asset remains on the balance sheet even though legal
ownership of the asset has been transferred.
In cases in which it is not possible to determine
whether substantially all the risks and rewards have been
transferred, the financial asset is derecognized when there
is no longer any control over it. Conversely, if even partial
control is retained the asset remains on the balance sheet
in proportion to the remaining involvement, measured as
the exposure to changes in the value of the asset sold and
to changes in the related cash flows.
Financial assets that are transferred are derecognized
in the event in which the contractual rights to receive the
related cash flows are retained, with the simultaneous
assumption of a related obligation to pay out these flows,
and only these flows, to third parties.
RECOGNITION OF GAINS AND LOSSES
MEASUREMENT
Subsequent to their initial recognition, AFS financial
assets are measured at fair value, which is based on the
criteria described in the section on financial assets held
for trading (see above). For equity securities, if the fair
value obtained by these valuation techniques cannot be
reliably measured, the financial instruments are measured
at cost and adjusted for impairment losses.
DERECOGNITION
AFS financial assets are removed from the balance
sheet when the rights to the related cash flows have
expired or in the event of other transactions in which the
Gains or losses resulting from the fair value
measurement of an asset are recognized in a specific
equity reserve until the asset is derecognized, while the
value corresponding to the amortized cost of AFS
financial assets is recognized in the income statement.
AFS financial assets undergo impairment testing in
order to determine whether there is objective evidence
of impairment. If such evidence exists, the amount of the
loss is measured as the difference between the carrying
amount of the asset and the present value of the
estimated future cash flows discounted at the original
effective interest rate, or by using specific valuation
techniques for equity securities.
If the reasons for the impairment should cease to
obtain following an event occurring after its recognition,

CAPITALIA
NOTES TO THE FINANCIAL STATEMENTS
in the case of loans or debt securities, the impairment
loss is reversed through the income statement, while for
equity securities, the amount is reversed to equity. In any
event, the amount of the writeback shall not result in the
carrying amount exceeding the amortized cost that the
financial asset would have had in the absence of these
impairment adjustments.
contractual payments and fixed maturity that an entity
has the positive intention and ability to hold until
maturity. If, following a change in intentions or ability, it
should no longer be appropriate to continue to recognize
the investment as held until maturity, it is reclassified to
AFS financial assets.
In addition to the recognition of a loss resulting from
impairment, gains or losses accumulated in the equity
reserve are, as mentioned above, recognized in the
income statement when the asset is sold.
Dividends on an AFS equity instrument are
recognized through profit or loss when the right to
receive payment is acquired.
3 – Held-to-maturity financial assets
RECOGNITION
MEASUREMENT
Subsequent to initial recognition, held-to-maturity
financial assets are measured at amortized cost and
undergo impairment testing.
The amortized cost of a financial asset is equal to the
initially recognized value minus principal repayments,
plus or minus the cumulative amortization using the
effective interest rate method of any difference between
that initial amount and the maturity amount, minus any
reductions (either directly or using an allowance account)
for impairment or uncollectibility.
Held-to-maturity financial assets are initially recognized
on the settlement date at fair value, which is normally
equal to the amount paid or received. In cases in which the
price is not equal to the fair value, the financial asset is
recognized at fair value, and the difference between the
price paid and fair value is recognized through profit or
loss. The initially recognized amount includes income and
charges directly attributable to the transaction.
The financial assets transferred to this category from
AFS financial assets are recognized at amortized cost,
which is deemed equal to the fair value as of the date of
reclassification.
CLASSIFICATION
Held-to-maturity financial assets are non-derivative
financial assets that have fixed or determinable
DERECOGNITION
Financial assets are derecognized upon expiration of
the contractual rights to the related cash flows or when
the financial asset is sold and substantially all related risk
and rewards are transferred. Conversely, if a substantial
portion of the risks and rewards related to the financial
asset is retained, the asset remains on the balance sheet
even though legal ownership of the asset has been
transferred.
In cases in which it is not possible to determine
whether the substantially all the risks and rewards have
been transferred, the financial asset is derecognized
when there is no longer any control over it. Conversely, if
even partial control is retained the asset remains on the
balance sheet in proportion to the remaining
involvement, measured as the exposure to changes in the

86 87
value of the asset sold and to changes in the related cash
flows.
Financial assets that are transferred are derecognized
in the event in which the contractual rights to receive the
related cash flows are retained, with the simultaneous
assumption of a related obligation to pay out these flows,
and only these flows, to third parties.
RECOGNITION OF GAINS AND LOSSES
Gains and losses are recognized in the income
statement at the moment in which the asset is
derecognized. Interest is recognized in accordance with
the amortized cost method using the effective interest
rate for the asset. In cases in which amortized cost
method is not applied, interest is recognized in the
income statement using the linear method.
At the balance-sheet date, given objective evidence
of an impairment loss, the amount of the loss recognized
in the income statement is equal to the difference
between the carrying amount of the asset and the
present value of estimated future cash flows discounted
at the original effective interest rate.
If the reasons for the impairment should cease to
obtain following an event occurring after its recognition
the impairment loss is reversed through the income
statement. In any event, the amount of the writeback
shall not result in the carrying amount exceeding the
amortized cost that the financial asset would have had in
the absence of these impairment adjustments.
Writebacks related to the passing of time,
corresponding to the interest accrued during the year at
the original effective interest rate previously used to
calculate the impairment loss, are recognized as writebacks
in the specific account for net writedowns/writebacks for
impairment.
4 – Loans and receivables
RECOGNITION
Loans are recognized in the balance sheet as of the
disbursement date or, in the case of debt securities, the
settlement date. The initially recognized value is equal to
the amount disbursed or the subscription price, including
marginal costs and income directly attributable to the
transaction and measurable as of the date of recognition,
even if paid at a later date. The initially recognized value
does not include costs that are to be repaid by the
borrower or internal administrative costs.
The initially recognized value of any loans disbursed
at non-market terms is the fair value of the loan as
determined by specific valuation techniques, and the
difference between the fair value and the amount
disbursed or the subscription price is recognized through
profit or loss.
Carryover transactions and repurchase agreements
with the obligation of forward repurchase or sales are
recognized as lending or funding transactions. Spot sales
and forward repurchases are recognized as liabilities for
the amount received spot, while spot purchase forward
resale transactions are recognized as receivables for
amount paid spot.
CLASSIFICATION
Loans disbursed directly or purchased from third
parties that are not listed on active markets and that have
fixed, determinable payments are classified among loans
to banks and loans to customers, with the exception of
those that are classified among the following categories:
financial assets held for trading; financial assets
measured at fair value; and AFS financial assets. The
category also includes any securities with characteristics
similar to loans.

CAPITALIA
NOTES TO THE FINANCIAL STATEMENTS
It includes operating loans, repurchase agreements,
and receivables recognized by lessors on finance leases.
this also includes default interest and the realizable value
of any collateral, net of collection costs;
MEASUREMENT
After initial recognition, loans are measured at
amortized cost as described above in the section
regarding the measurement of held-to-maturity financial
assets.
The amortized cost method is not applied to loans
with a maturity of less than short-term, loans with an
undefined maturity, and lending agreements that are
valid until cancelled, for which the effect of the amortized
cost method is deemed to be insignificant. Such loans
are measured at cost.
The loan portfolio is subject to impairment testing at
the end of each financial year in order to determine if
there is cause to recognize impairment losses. Bad debts,
substandard loans, restructured debt and past-due
positions are considered impaired. The impairment loss
is only recognized in the event in which, subsequent to
initial recognition of the loan, there is objective evidence
of events that have resulted in a deterioration in the
loan’s value such that it would result in a change in
reliably estimated cash flows.
Loans that decrease in value as a result of objective
evidence of impairment are subject to specific valuation.
The amount of the loss is calculated as the difference
between the carrying amount of the asset and the
present value of the future cash flows discounted at the
original effective interest rate of the financial asset. The
loan valuation process takes account of the following
aspects:
collection times, estimated based on contractual due
dates, if available, or on reasonable estimates in the
absence of specific contractual agreements;
the discount rate, which is equal to the original
effective interest rate; for impaired loans outstanding at
the transition date, for which determination of the figure
was deemed to be excessively difficult, reasonable
estimates have been used, such as the average interest
rate for loans during the year in which the loan was
classified as a bad debt or the restructuring rate.
As part of the detailed valuation process, cash flows for
which collection is expected over the short term are not
discounted to present value. The original effective interest
rate for each loan remains constant over time even if the
loan is restructured at a different contractual interest rate
or if the loan no longer bears interest by contract.
Loans that do not present objective evidence of
impairment are subject to collective valuation by creating
groups of positions with similar risk profiles. The valuation
is then based on historical loss trends for each group. In
constructing the time series, the positions that have
undergone individual valuation are removed from the
loan population. Impairment losses calculated in this
manner are recognized in the income statement.
Guarantees are also subject to impairment testing in
a manner similar to that of the loans measured
collectively.
DERECOGNITION
the maximum recoverable amount, which is the best
estimate of the expected cash flows from the loan and
the related interest; where collection is deemed likely,
Transferred loans are derecognized only if the transfer
results in the transfer of substantially all the related risks
and rewards. Conversely, in the event that a significant

88 89
portion of the risks and rewards related to the loan is
retained, the asset remains on the balance sheet even
though legal ownership of the asset has been transferred.
In cases in which it is not possible to determine
whether substantially all the risks and rewards have been
transferred, the loan is derecognized when there is no
longer any control over it. Conversely, if even partial
control is retained the loan remains on the balance sheet
in proportion to the remaining involvement, measured as
the exposure to changes in the value of the loan sold and
to changes in the related cash flows.
Loans that are transferred are derecognized in the
event in which the contractual rights to receive the
related cash flows are retained, with the simultaneous
assumption of a related obligation to pay out these flows,
and only these flows, to third parties.
IFRS 1 includes a specific exception to the application of
the derecognition rules for financial assets transferred,
including securitization transactions, if carried out prior to 1
January 2004. For securitization transactions initiated
before this date, a company may elect to continue applying
the previous accounting standards or to apply the
provisions of IAS 39 retrospectively from a date established
by the company itself, on the condition that the information
needed to apply IAS 39 to previously derecognized assets
was available at the time of initial recognition of these
transactions. In that regard, the Capitalia Group has opted
to apply the previous accounting standards for
securitizations carried out up to the 2001 financial year.
between the amount disbursed and the amount to be
repaid upon maturity, which is typically related to the
costs and income allocated directly to the individual loan.
The effective interest rate is determined by calculating
the rate that exactly discounts the loan’s future cash flows
in respect of both principal and interest to the amount
disbursed, including costs and income related to the
loan. This method of recognition distribute the financial
effect of the costs and income across the expected
remaining life of the loan.
The amortized cost method is not used for short-term
loans for which discounting to present value is deemed
to have an insignificant effect. Such loans are measured
at cost. The same method is used for loans that have no
defined maturity or that are valid until revoked.
As described in the section regarding the measurement
of loans above, impairment losses are recognized in the
income statement.
If, following an event occurring after the recognition of
the impairment, the reasons for the loss should cease to
obtain, the amount is reversed through the income
statement. The amount of the writeback shall not result in
the carrying amount exceeding the amortized cost that the
loan would have had if the impairment had never occurred.
Writebacks related to the passing of time, corresponding
to the interest accrued during the year at the original
effective interest rate previously used to calculate the
impairment, are recognized as writebacks for impairment.
RECOGNITION OF GAINS AND LOSSES
5 – Financial assets measured at fair value
After initial recognition, loans are measured at
amortized cost, which is equal to the initially recognized
value plus or minus repayments of principal, value
adjustments and amortization – calculated using the
effective interest rate method – of the difference
RECOGNITION
Initial recognition of financial assets measured at fair
value takes place on the settlement date for debt and
equity securities.

CAPITALIA
NOTES TO THE FINANCIAL STATEMENTS
Initial recognition is at fair value, which is normally
equal to the amount paid or received. In cases in which
the price is not equal to the fair value, the financial asset
is recognized at fair value, and the difference between
the price paid and fair value is recognized through profit
or loss.
6 – Hedging transactions
RECOGNITION
Hedging derivatives and the financial assets and
liabilities that are part of an effective hedge are recognized
in accordance with the rules of hedge accounting.
CLASSIFICATION
Financial assets measured at fair value include
assets which, regardless of their type, are designated
from the moment of recognition as measurable at fair
value.
MEASUREMENT
Subsequent to their initial recognition, these financial
assets continue to be measured at fair value, which is
based on the criteria described in the section on financial
assets held for trading (see above). For equity securities
and related derivatives, if the fair value obtained by these
valuation techniques cannot be reliably measured, the
financial instruments are measured at cost and adjusted
for impairment.
DERECOGNITION
Financial assets measured at fair value are removed
from the balance sheet when the rights to the cash flows
have expired or in the event of other transactions in
which the risks and rewards of ownership of the asset are
transferred.
Hedging transactions for which the relationship
between the hedged item and the hedging instrument is
formally documented are considered effective if, at the
inception of the hedge and throughout the duration of
the hedging relationship, the changes in fair value or in
the cash flows of the hedged item are nearly fully offset
by the changes in the fair value or cash flows of the
derivative hedging instrument. At each balance-sheet
date, the effectiveness of the hedge is tested on both a
prospective and retrospective basis, and the hedge is
considered effective if the relationship between the
changes in value remains within the range of 80 to 125%.
CLASSIFICATION
Derivatives for hedging purposes are used in order to
protect against one or more types of risk (interest-rate risk,
exchange rate risk, price risk, credit risk). Specifically, fair
value hedges are performed in order to hedge exposure to
changes in fair value, while cash flow hedges are carried
out in order to hedge exposure to changes in cash flows.
The “hedging derivatives” items shown on the asset
and liability sides of the balance sheet correspond to the
positive and negative values of the effective hedging
derivatives.
RECOGNITION OF GAINS AND LOSSES
MEASUREMENT AND RECOGNITION OF GAINS AND
LOSSES
The result of the fair value measurement is recognized
through profit or loss.
Hedging derivatives are measured at fair value and
changes in fair value, for fair value hedges, are

90 91
recognized through profit or loss. Changes in the fair
value of cash flow hedges are posted to equity for the
effective portion of the hedge and are only recognized
through profit or loss when, in relation to the hedged
item, there is a change in the cash flow being hedged.
Changes in the fair value of fair value hedges
attributable to the risk hedged for the asset or liability is
recognized through profit or loss. In the case of hedges
of a specific asset or liability, the hedged asset or liability,
recognized among the related item on the balance sheet,
is adjusted up or down for the amount of the change in
fair value attributable to the risk being hedged. In the
case of macro hedging, this change is shown on the
balance sheet among adjustments to the value of the
assets or liabilities subject to macro hedging.
CLASSIFICATION
This category includes investments in subsidiaries,
associated companies and joint ventures.
Equity investments in associates, joint ventures and
other investments held for as part of venture capital
operations are treated in conformity with the provisions
of IAS 39.
Subsidiaries are those companies in which Capitalia
directly or indirectly holds more than half of the voting
rights unless it can be demonstrated that such a holding
does not represent control. Control also exists when the
company has the direct or indirect power to govern
financial and operating policies of the subsidiary.
DERECOGNITION
If the tests performed fail to confirm the hedge’s
effectiveness, the hedge is derecognized in
accordance with the criteria described above, and the
accounting treatment for the given category is
applied. The derivative is then reclassified as a trading
instrument, and subsequent changes in fair value are
recognized through profit or loss. In the case of cash
flow hedges, if the transaction being hedged no
longer takes place, the cumulative value of gains and
losses posted to the equity reserve is recognized
through profit or loss.
7 – Equity investments
RECOGNITION
Equity investments are initially recognized at cost as
of the settlement date, including costs or revenues
directly attributable to the transaction.
Joint ventures are those companies in which control is
shared with other parties as established by formal
contractual agreements.
Associates are those companies in which Capitalia
directly or indirectly holds at least 20% of the voting
rights or those in which it holds less than 20% of the
voting rights but exercises a significant influence over the
company. Significant influence is defined as the power to
participate in the determination of the company’s
financial and operating policies without exercising
control or joint control.
Control, joint control or other connections are
considered to have ceased in cases in which
responsibility for determining the financial and operating
policies of the entity is taken away from the governing
bodies and is assigned to a government body, to the
courts or in similar situations. In such cases, the
investment is subject to the provisions of IAS 39, as
envisaged for financial instruments.
In determining the type of connection, only the
factors (percentage holding, actual and potential voting

CAPITALIA
NOTES TO THE FINANCIAL STATEMENTS
rights, de facto significant influence) that are present at
the level of the individual financial statements are
considered.
Subsidiaries, joint ventures or associates to be sold
are reported separately as assets being divested at the
lesser of book value and fair value net of disposal
costs.
MEASUREMENT
Investments in subsidiaries, associates and joint
ventures are measured at cost. If there is evidence of an
impairment loss on an asset, the recoverable value is
estimated, taking account of market value or the present
value of future cash flows. If the recoverable value is less
than the carrying amount, the difference is recognized in
the income statement as an impairment loss.
DERECOGNITION
8 – Tangible assets
RECOGNITION
Tangible assets are initially recognized at cost,
including all directly related costs necessary to purchase
the asset and to bring it into working condition.
Extraordinary maintenance that results in an increase in
the future economic benefits are recognized as an
increase in the value of the asset, while other costs of
routine maintenance are recognized as an expense when
incurred.
Tangible assets also include assets used under
finance leases for which substantially all the risks and
rewards of ownership have been assumed. These assets
are initially recognized at a value that is equal to the
lesser of fair value and the present value of the minimum
lease payments. This value is then subject to
depreciation.
Equity investments are derecognized upon expiration
of the rights to the related cash flows or when the
financial asset is sold and substantially all related risks
and rewards are transferred.
RECOGNITION OF GAINS AND LOSSES
Dividends received on investments measured at cost
are recognized in the income statement when the right to
receive payment vests.
Impairment losses on subsidiaries, associates and
joint ventures measured at cost are recognized in the
income statement. If the reasons for the impairment
should cease to obtain following an event occurring after
its recognition, the impairment loss is reversed through
the income statement.
CLASSIFICATION
This category includes land, buildings used in
operations, investment property, technical systems,
furniture, furnishings and equipment. It also includes
assets held for use in production and in the provision of
goods and services, for administrative purposes, or that
are to be rented out to third parties, and that are
expected to be used for more than one financial year.
MEASUREMENT
Tangible assets, including investment property, are
measured at cost less depreciation and impairment
losses. As of 1 January 2004, the date of transition to
IFRSs, the buildings were measured at fair value, and this
fair value was adopted as deemed cost.

92 93
Assets are depreciated systematically based on their
residual useful life. The following depreciation rates are
used for the main asset categories: furnishings, 12%;
ordinary office machines, 20%; machinery and other
equipment, 15%; alarm, video and television systems,
30%; electronic equipment, 20%; lifting equipment and
systems, 7.5%. The depreciable value is equal to the cost
of the asset, as the residual value after depreciation is
deemed to be insignificant. Buildings are depreciated at
a rate of 2% per year, which is deemed to appropriately
represent the deterioration of the asset over time as a
result of use, taking account of the costs of extraordinary
maintenance that result in an increase in the asset’s value.
Land, either purchased separately or together with a
building, is not depreciated.
DERECOGNITION
Tangible assets are derecognized upon disposal or
when the asset is withdrawn from use and no future
economic benefits are expected from its disposal.
RECOGNITION OF GAINS AND LOSSES
Depreciation is recognized in the income statement.
When there is an indication of a potential impairment of
an asset, a comparison is made between the asset’s
carrying amount and its recoverable value, the latter
being the greater of the value in use (i.e. the present
value of the future cash flows generated by the asset) and
its fair value net of disposal costs. Any negative
difference between the carrying amount and the
recoverable value is recognized in the income statement.
If the reasons for the impairment should cease to obtain,
the writeback is recognized in the income statement.
Following a writeback, the carrying amount may not
exceed the value that the asset would have had, net of
depreciation, had there been no impairment.
9 – Intangible assets
RECOGNITION
Intangible assets are recognized at cost and adjusted
for any incidental expenses only if it is likely that the
future economic benefits attributable to the asset will
flow to the company and the cost of the asset itself can
be reliably measured. Otherwise, the cost of the
intangible asset is recognized in the income statement in
period in which it is incurred.
Intangible assets may also include the goodwill related
to business combinations (e.g. acquisitions of business
units). Goodwill related to business combinations
subsequent to 1 January 2004 is initially measured at the
positive difference between the net fair value of the assets
and liabilities acquired and the cost of the business
combination, including related costs, assuming that this
positive difference is representative of future earning
capacity. The difference between the cost of the business
combination and the net fair value of the assets and
liabilities acquired is recognized through profit or loss if
negative or if not representative of future earning
capacity. Goodwill related to business combinations
taking place prior to the IFRS transition date are measured
at cost, which is the same value recognized in accordance
with Italian accounting standards.
CLASSIFICATION
Intangible assets are recognized when they are
identifiable and they arise out of legal or contractual
rights. This includes software. Costs for the restructuring
of leased buildings without their own independent
function and use are classified among other assets in
accordance with Bank of Italy circular no. 262, and the
related depreciation, which is charged over a period that
is not to exceed the duration of the lease contract, is
recognized under other operating costs.

CAPITALIA
NOTES TO THE FINANCIAL STATEMENTS
MEASUREMENT
Intangible assets initially measured at cost are
amortized on a straight-line basis in accordance with the
estimated residual useful life of the asset, which for
software is no more than 5 years.
MEASUREMENT AND RECOGNITION OF GAINS AND
LOSSES
These assets and liabilities are measured at the lesser
of carrying amount and fair value net of disposal costs.
The related income and charges, net of tax effects, are
shown separately in the income statement.
DERECOGNITION
Intangible assets are derecognized on disposal and
when future economic benefits from their use or disposal
are no longer expected.
RECOGNITION OF GAINS AND LOSSES
Amortization is recognized in the income statement.
When there is evidence of impairment of an intangible
asset, the asset is tested to verify such impairment and
any negative difference between the carrying amount
and the recoverable value is recognized through the
income statement. If the reasons for the impairment
should cease to obtain for intangible assets other than
goodwill, the writeback is recognized in the income
statement. This writeback may not result in a carrying
amount that exceeds the value that the asset would have
had, net of amortization, had there been no impairment.
11 – Current and deferred taxes
RECOGNITION
Income taxes are recognized in the income statement,
with the exception of those that are related to items to be
posted directly to equity. Deferred tax assets are
recognized when their recovery is deemed probable.
Deferred tax liabilities are recognized in all cases in which
the related liability is likely to be incurred.
CLASSIFICATION
Deferred tax assets and liabilities are shown
separately in the balance sheet without being offset.
MEASUREMENT
10 – Non-current assets held for sale and discontinued
operations
RECOGNITION AND CLASSIFICATION
This category includes non-current assets held for sale
and the assets and liabilities of operations that are to be
discontinued within 12 months of the date of
classification, such as equity investments in subsidiaries,
associates, and joint ventures, property, plant and
equipment and intangibles and the assets and liabilities
of business units that are to be sold.
When the results of a transaction are posted directly
to equity, current taxes, as well as deferred tax assets and
liabilities, are also posted to equity.
Deferred tax assets and liabilities are periodically
remeasured in order to take account of any changes in
tax legislation or tax rates.
RECOGNITION OF GAINS AN LOSSES
Income taxes are recognized in the income statement,
with the exception of those that are related to items to be

94 95
posted directly to equity. Current income taxes are
calculated based on the taxable income for the period.
Amounts payable and receivable for current taxes are
recognized at the amount that is expected to be paid or
received and in accordance with the prevailing tax rates
and tax legislation. Deferred tax assets and liabilities are
calculated based on the temporary differences between
the carrying amount of assets and liabilities and their
corresponding values for tax purposes.
present value of the plan’s benefits and 10% of the fair
value of any plan assets. This excess is recognized in
accordance with the expected average remaining
working lives of the participating employees.
For the (external) defined contribution funds, the
contributions made by the company are expensed in the
income statement and measured in accordance with the
services rendered by employees. Each year the obligation is
determined on the basis of contributions due for that year.
12 – Provisions for liabilities and contingencies
Other provisions for liabilities and contingencies
Provisions for pensions and similar obligations
RECOGNITION AND CLASSIFICATION
Post-employment benefit plans are classified as
defined contribution plans when fixed contributions are
made into a fund, but there is no obligation to make
further payments if the fund does not have sufficient
assets to pay all of the employees’ benefits; all other
types of post-employment benefit plans being defined
benefit plans. Internal pension funds are established in
accordance with company agreements and are classified
as defined benefit plans.
MEASUREMENT AND RECOGNITION OF GAINS AND
LOSSES
The liability in respect of the (defined benefit) internal
pension funds and the related current service costs are
measured based on actuarial assumptions and applying
the projected unit credit method. The carrying amount of
the liability as of the balance-sheet date is also adjusted
for the fair value of any plan assets. Actuarial gains and
losses are recognized through profit or loss using the
“corridor” approach, i.e. limited to the portion of
actuarial gains or losses not recognized at the end of the
previous year that exceeds the greater of 10% of the
RECOGNITION AND CLASSIFICATION
Provisions for liabilities and contingencies are
recognized in the income statement and as a liability on
the balance sheet when there is a present legal or
constructive obligation as a result of a past event for which
it is probable that an outflow of economic benefits will be
required to settle the obligation, on the condition that the
loss associated with the liability can be estimated reliably.
These provisions are recognized at the best estimate
of the amount required to settle the obligation or to
transfer it to a third party as of the balance-sheet date.
Where the effect of the time value of money is
material and the dates for paying the obligation can be
reliably estimated, the provisions are discounted at the
market rates current at the balance-sheet date.
MEASUREMENT AND RECOGNITION OF GAINS AND
LOSSES
Provisions are reassessed at the end of each financial
year and adjusted to reflect the best estimate of the
expense required to settle the obligations as of the
balance sheet date. The effects of the time value of
money and changes in interest rates are recognized
through profit or loss under net provisions for the period.

CAPITALIA
NOTES TO THE FINANCIAL STATEMENTS
DERECOGNITION
Provisions are only used for the purpose for which
they were originally recognized. If it is no longer deemed
probable that an outflow of resources will be required to
settle the obligation, the provision is reversed to income.
with the exception of short-term liabilities, which are
measured at the amount received in accordance with the
general principle of materiality. For information on the
determination of amortized cost, see the section above
regarding held-to-maturity financial assets.
13 – Debt and securities issued
RECOGNITION
Initial recognition is carried out at the fair value of the
liability, which is normally equal to the amount received or
the issue price plus or minus any marginal costs or income
directly attributable to the transaction and not repaid by
the creditor, excluding any internal administrative costs.
Financial liabilities issued at anything other than prevailing
market terms are recognized at estimated fair value, and
the difference with respect to the amount paid or the
issue price is recognized through profit or loss.
DERECOGNITION
Financial liabilities included in this category are
removed from the balance sheet both following
settlement or maturity and following a repurchase of the
previously issued securities. In the latter case, the
difference between the carrying amount of the liability
and the amount paid for the repurchase is recognized
through profit or loss.
The replacement of these securities on the market
after being repurchased is considered to be the same as
a new issue and therefore results in the recognition of a
new placement price without any income effect.
CLASSIFICATION
14 – Financial liabilities held for trading
Debt and securities in issue includes financial
liabilities not held for short-term trading purposes,
including the various forms of interbank funding and
funding from customers, as well as funding through
certificates of deposit and the issue of other debt
securities, net of any amounts repurchased.
The category also includes any amounts payable by
the leasee for finance leases.
MEASUREMENT AND RECOGNITION OF GAINS AND
LOSSES
After initial recognition, these items are measured at
amortized cost using the effective interest rate method,
RECOGNITION
Initial recognition of financial liabilities takes place on
the settlement date for debt and equity securities and
on the signing date for derivatives, and is carried out at
fair value, which is normally equal to the amount
received.
In cases in which the price is not equal to the fair
value, the financial liability is recognized at fair value, and
the difference between the price paid and fair value is
recognized through profit or loss.
Derivatives that are embedded in financial
instruments or other contract forms, and which have
financial characteristics and risks that are not correlated

96 97
with the host instrument or which have other features that
qualify them as derivative contracts, are recognized
separately, if negative, in the category of financial
liabilities held for trading, except in cases in which the
instrument in which they are embedded is measured at
fair value through profit or loss.
CLASSIFICATION
This category includes the negative value of nonhedging
derivative contracts, as well as the negative
value of derivatives embedded in other contracts.
Liabilities that result from uncovered positions related to
securities trading are also recognized as financial
liabilities held for trading.
MEASUREMENT
Subsequent to their initial recognition, financial
liabilities held for trading are measured at fair value,
which is based on the criteria described in the section on
financial assets held for trading (see above).
DERECOGNITION
Financial liabilities held for trading are derecognized
when settled or at maturity.
RECOGNITION OF GAINS AND LOSSES
The results of the measurement of financial liabilities
held for trading are recognized through profit or loss.
16 – Foreign currency transactions
RECOGNITION
Foreign currency transactions are initially recognized
in the functional currency using the exchange rate in
effect as of the date of the transaction.
RECOGNITION OF GAINS AND LOSSES
As of the balance-sheet date, items denominated in a
foreign currency are measured as follows:
monetary items are translated at the exchange rate
on the balance sheet date;
non-monetary items measured at historical cost are
translated at the exchange rate prevailing on the date of
the transaction;
non-monetary items measured at fair value are
translated at the exchange rate prevailing on the
balance-sheet date.
Exchange rate differences that result from the
settlement of monetary items or the translation of
monetary items at a rate different from that of the initial
translation, or of the translation of the previous year’s
financial statements, are recognized through profit or loss
in the period in which they occur.
When a gain or a loss related to a non-monetary item
is recognized in equity, the exchange rate difference
related to that item is also recognized in equity. Similarly,
when a gain or a loss is recognized in income, the related
exchange rate difference is also recognized in income.
15 – Financial liabilities measured at fair value
This category is not shown, given that the Capitalia
Group does not make use of the fair value option for
liabilities.
17 – Other information
EMPLOYEE SEVERANCE PAY
The Italian employee severance pay (or “TFR”, for
Trattamento di Fine Rapporto) is recognized at an

CAPITALIA
NOTES TO THE FINANCIAL STATEMENTS
amount calculated using the actuarial methods specified
in IAS 19 for employee defined benefit plans.
Accordingly, the amount of the liability recognized on
the balance sheet is subject to actuarial valuation and
takes account of such things as future developments in
the employment relationship.
Future TFR cash flows are discounted using the
projected unit credit method. Actuarial gains and losses
are recognized through profit or loss using the “corridor”
approach: i.e. the portion of actuarial gains or losses that
exceeds 10% of the present value of the plan’s benefits,
recognized at the previous reference date and divided by
the expected average remaining working lives of the
participating employees.
The liability represents the present value of the
obligation, plus any unrecognized actuarial gains and
minus any unrecognized actuarial losses.
commissions on service revenues are recognized in
the period in which the service is provided and based on
contractual agreements;
revenues from intermediation in financial
instruments held for trading, which are calculated as the
difference between the price of the transaction and the
fair value of the instrument, are recognized as income
when recognizing the transaction if the fair value can be
measured based on recently observable transactions or
parameters in the same market on which the instrument
is traded. In the absence of such conditions, the
estimated difference with fair value is recognized
through profit or loss throughout the life of the
transaction;
revenues from the sale of non-financial assets are
recognized when the sale is finalized, unless the bank
retains the majority of the risks and rewards related to the
asset.
RECOGNITION OF REVENUES
Revenues are recognized when they are realized or, in
the case of the sale of goods or other products, when it
is likely that the future benefits will be received and these
benefits can be reliably measured. In the case of services,
revenues are recognized when the service is provided.
Specifically:
interest is recognized on a pro rata temporis basis
using the contractual interest rate, or the effective interest
rate in the case the amortized cost method is applied;
dividends are recognized as income when the
dividend distribution is approved;
TREASURY SHARES, STOCK OPTIONS, AND STOCK
GRANTING
Treasury shares are recognized posted in a specific
account as a reduction to equity. The original cost of the
shares repurchased, as well as gains or losses on the
purchase, sale, issue, or cancellation of treasury shares,
are not recognized through profit or loss, but rather are
recognized in equity in the share premium reserve
account.
Stocks and stock options granted to employees are
recognized as staff costs and in equity at their fair value
as of the date on which they are granted.

98 99
PART B – INFORMATION ON
THE BALANCE SHEET
ASSETS
Section 1 – CASH AND CASH EQUIVALENTS - ITEM 10
Item 10 “Cash and cash equivalents” is not present in the 2006 and 2005 financial statements.
Section 2 – FINANCIAL ASSETS HELD FOR TRADING - ITEM 20
2.1 FINANCIAL ASSETS HELD FOR TRADING: COMPOSITION BY TYPE
Total 2006 Total 2005
Listed Unlisted Listed Unlisted
A. Non-derivative assets
1. Debt securities 400,180 148,308 385,242 209,482
1.1 Structured securities – – – –
1.2 Other debt securities 400,180 148,308 385,242 209,482
2. Equity securities 820,956 – 1,449,755 7,325
3. Units in collective investment undertakings 67,525 614,593 86,360 626,279
4. Loans – – – –
4.1 Repurchase agreements – – – –
4.2 Other – – – –
5. Impaired assets – – – –
6. Assets assigned but not derecognized 1,125,189 1,207 4,699,872 –
Total (A) 2,413,850 764,108 6,621,229 843,086
B. Derivatives
1. Financial derivatives 326 4,379,514 1,031 3,160,581
1.1 trading 326 4,240,526 1,031 2,946,094
1.2 associated with fair value option – – – –
1.3 other – 138,988 – 214,487
2. Credit derivatives – 838 – 3,481
2.1 trading – 838 – 3,481
2.2 associated with fair value option – – – –
2.3 other – – – –
Total (B) 326 4,380,352 1,031 3,164,062
Total (A+B) 2,414,176 5,144,460 6,622,260 4,007,148

CAPITALIA
NOTES TO THE FINANCIAL STATEMENTS
2.2 FINANCIAL ASSETS HELD FOR TRADING: COMPOSITION BY DEBTOR/ISSUER
Total 2006 Total 2005
A. Non-derivative financial assets
1. Debt securities 548,488 594,724
a) Governments and central banks 96,769 19,355
b) Other government agencies 1,028 702
c) Banks 239,499 279,557
d) Other issuers 211,192 295,110
2. Equity securities 820,956 1,457,080
a) Banks 207,126 266,661
b) Other issuers 613,830 1,190,419
– insurance undertakings 240,596 –
– financial companies 29,095 37,113
– non-financial companies 344,139 –
– other – 1,153,306
3. Units in collective investment undertakings (*) 682,118 712,639
4. Loans – –
a) Governments and central banks – –
b) Other government agencies – –
c) Banks – –
d) Other – –
5. Impaired assets – –
a) Governments and central banks – –
b) Other government agencies – –
c) Banks – –
d) Other – –
6. Assets assigned but not derecognized 1,126,396 4,699,872
a) Governments and central banks 688,180 4,060,651
b) Other government agencies – –
c) Banks 16,199 –
d) Other 422,017 639,221
Total (A) 3,177,958 7,464,315
B. Derivatives
a) Banks 3,979,926 2,940,781
b) Customers 400,752 224,312
Total (B) 4,380,678 3,165,093
Total (A+B) 7,558,636 10,629,408
(*) Consisting of equity funds (€94 million), money market funds (€164 million), bond funds (€330 million), foreign funds (€66 million), hedge funds (€27 million)
and real estate funds (€1 million).

100 101
2.3 FINANCIAL ASSETS HELD FOR TRADING: DERIVATIVES
Interest Foreign Equity Loans Other Total 2006 Total 2005
rates currencies securities
and gold
A Listed
1) Financial derivatives 318 – 8 – – 326 1.031
a) with exchange
of principal 318 – 8 – – 326 1.031
– options purchased – – – – – – –
– other derivatives 318 – 8 – – 326 1.031
b) without exchange
of principal – – – – – – –
– options purchased – – – – – – –
– other derivatives – – – – – – –
2) Credit derivatives – – – – – – –
a) with exchange
of principal – – – – – – –
b) without exchange
of principal – – – – – – –
Total (A) 318 – 8 – – 326 1.031
B
Unlisted
1) Financial derivatives 2,589,188 309,316 1,414,878 – 66,132 4,379,514 3,160,581
a) with exchange
of principal 479 305,995 1,132,277 – – 1,438,751 723,627
– options purchased 468 22,245 1,125,463 – – 1,148,176 543,156
– other derivatives 11 283,750 6,814 – – 290,575 180,471
b) without exchange
of principal 2,588,709 3,321 282,601 – 66,132 2,940,763 2,436,954
– options purchased 738,268 – 282,601 – – 1,020,869 646,961
– other derivatives 1,850,441 3,321 – – 66,132 1,919,894 1,789,993
2) Credit derivatives – – – 838 – 838 3,481
a) with exchange
of principal – – – 838 – 838 3,481
b) without exchange
of principal – – – – – – –
Total (B) 2,589,188 309,316 1,414,878 838 66,132 4,380,352 3,164,062
Total (A+B) 2,589,506 309,316 1,414,886 838 66,132 4,380,678 3,165,093

CAPITALIA
NOTES TO THE FINANCIAL STATEMENTS
2.4 NON-DERIVATIVE FINANCIAL ASSETS HELD FOR TRADING OTHER THAN THOSE ASSIGNED
BUT NOT DERECOGNIZED AND IMPAIRED ASSETS: ANNUAL CHANGE
Debt Equity Units Loans Total
securities securities in collective
A. Opening balance 594,724 1,457,080 712,639 – 2,764,443
B. Increases 108,772,922 7,329,297 724,115 – 116,826,334
B.1 Purchases 104,606,612 7,209,078 702,507 – 112,518,197
B.2 Positive changes
in fair value 6,246 61,176 12,530 – 79,952
B.3 Other changes 4,160,064 59,043 9,078 – 4,228,185
C. Decreases 108,819,158 7,965,421 754,636 – 117,539,215
C.1 Sales 106,418,290 7,869,986 749,186 – 115,037,462
C.2 Redemptions 698,984 – – – 698,984
C.3 Negative changes in fair value 7,149 14,389 700 – 22,238
C.4 Other changes 1,694,735 81,046 4,750 – 1,780,531
D. Closing balance 548,488 820,956 682,118 – 2,051,562
B.3 of debt securities includes €107,104 in respect of demerger operations.
By convention, sub-items B.3 and C.4 include amounts in respect of technical overdrafts at the end and start of the period, respectively, as well as the annual change
in assets assigned but not derecognized.

102 103
Section 3 - FINANCIAL ASSETS DESIGNATED AT FAIR VALUE - ITEM 30
3.1 FINANCIAL ASSETS DESIGNATED AT FAIR VALUE: COMPOSITION
Total 2006 Total 2005
Listed Unlisted Listed Unlisted
1. Debt securities – – – –
1.1 Structured securities – – – –
1.2 Other debt securities – – – –
2. Equity securities – 43,308 – 24,822
3. Units in collective
investment undertakings (*) – – – –
4. Loans – – – –
4.1 Structured – – – –
4.2 Other – – – –
5. Impaired assets – – – –
6. Assets assigned but not derecognized – – – –
Total – 43,308 – 24,822
Cost – 43,223 – 25,861
(*) In 2006: €31,510 for Astrim S.p.A. and €11,798 for Euroclass Multimedia Holding S.A..
In 2005: €13,483 for Euroclass Multimedia Holding S.A., €10,329 for Porta di Roma srl and €1,010 for C.R.I.F. S.p.A..

CAPITALIA
NOTES TO THE FINANCIAL STATEMENTS
3.2 FINANCIAL ASSETS DESIGNATED AT FAIR VALUE: COMPOSITION BY DEBTOR/ISSUER
Total 2006 Total 2005
1. Debt securities – –
a) Governments and central banks – –
b) Other government agencies – –
c) Banks – –
d) Other issuers – –
2. Equity securities 43,308 24,822
a) Banks – –
b) Other issuers 43,308 24,822
– insurance undertakings – –
– financial companies – –
– non–financial companies 43,308 24,822
– other – –
3. Units in collective investment undertakings – –
4. Loans – –
a) Governments and central banks – –
b) Other government agencies – –
c) Banks – –
d) Other – –
5. Impaired assets – –
a) Governments and central banks – –
b) Other government agencies – –
c) Banks – –
d) Other issuers – –
6. Assets assigned but not derecognized – –
a) Governments and central banks – –
b) Other government agencies – –
c) Banks – –
d) Other issuers – –
Total 43,308 24,822

104 105
3.3 FINANCIAL ASSETS DESIGNATED AT FAIR VALUE OTHER THAN ASSIGNED BUT NOT DERECOGNIZED
AND IMPAIRED ASSETS: ANNUAL CHANGE
Debt Equity Units Loans Total
securities securities in collective
investment
undertakings
A. Opening balance – 24,822 – – 24,822
B. Increases – 32,072 – – 32,072
B.1 Purchases – 129 – – 129
B.2 Positive changes in fair value – 3,234 – – 3,234
B.3 Other changes – 28,709 28,709
C. Decreases – 13,586 – – 13,586
C.1 Sales – 11,902 – – 11,902
C.2 Redemptions – –
C.3 Negative changes in fair value – 1,684 – – 1,684
C.4 Other changes – – – – –
D. Closing balance – 43,308 – – 43,308
B.3 includes €28,705 in respect of demerger operations.
Section 4 – FINANCIAL ASSETS AVAILABLE FOR SALE - ITEM 40
4.1 FINANCIAL ASSETS AVAILABLE FOR SALE: COMPOSITION BY TYPE
Total 2006 Total 2005
Listed Unlisted Listed Unlisted
1. Debt securities 130,253 535,802 275 1,247,761
1.1 Structured securities – – – –
1.2 Other debt securities 130,253 535,802 275 1,247,761
2. Equity securities 421,922 325,390 1,973,752 241,993
2.1Measured at fair value 421,922 260,852 1,973,752 176,159
2.2 Measured at cost – 64,538 – 65,834
3. Units in collective investment undertakings 19,048 28,988 15,528 8,445
4. Loans – – – –
5. Impaired assets – – – –
6. Assets assigned but not derecognized – 1,006,551 – 463,029
Total 571,223 1,896,731 1,989,555 1,961,228

CAPITALIA
NOTES TO THE FINANCIAL STATEMENTS
4.2 FINANCIAL ASSETS AVAILABLE FOR SALE: COMPOSITION BY DEBTOR/ISSUER
Total 2006 Total 2005
1. Debt securities 666,055 1,248,036
a) Governments and central banks – –
b) Other government agencies – –
c) Banks – –
d) Other issuers 666,055 1,248,036
2. Equity securities 747,312 2,215,745
a) Banks 154,461 896,393
b) Other issuers 592,851 1,319,352
– insurance undertakings – 503,453
– financial companies 98,866 153,969
– non-financial companies 493,985 661,787
– other – 143
3. Units in collective investment undertakings (*) 48,036 23,973
4. Loans – –
a) Governments and central banks – –
b) Other government agencies – –
c) Banks – –
d) Other – –
5. Impaired assets – –
a) Governments and central banks – –
b) Other government agencies – –
c) Banks – –
d) Other – –
6. Assets assigned but not derecognized 1,006,551 463,029
a) Governments and central banks – –
b) Other government agencies – –
c) Banks – –
d) Other 1,006,551 463,029
Total 2,467,954 3,950,783
(*) Consisting of real estate funds (€27 million), hedge funds (€15 million) and equity funds (€6 million).

106 107
4.3 FINANCIAL ASSETS AVAILABLE FOR SALE: HEDGED ASSETS
None at 31 December 2006.
4.4 FINANCIAL ASSETS AVAILABLE FOR SALE: ASSETS HEDGED SPECIFICALLY
None at 31 December 2006.
4.5 FINANCIAL ASSETS AVAILABLE FOR SALE OTHER THAN THOSE ASSIGNED BUT NOT DERECOGNIZED AND
IMPAIRED ASSETS: ANNUAL CHANGE
Debt Equity Units Loans Total
securities securities in collective
investment
undertakings
A. Opening balance 1,248,036 2,215,745 23,973 – 3,487,754
B. Increases 191,549 721,182 75,391 – 988,122
B.1 Purchases 35,616 311,284 29,295 – 376,195
B.2 Positive changes in fair value 2,987 200,262 484 – 203,733
B.3. Writebacks 46,250 – – – 46,250
– taken to income statement 46,250 X – – 46,250
– taken to equity – – – – –
B.4 Transfers from other portfolios – – – – –
B.5 Other changes 106,696 209,636 45,612 – 361,944
C. Decreases 773,530 2,189,615 51,328 – 3,014,473
C.1 Sales 10,374 2,087,075 49,116 – 2,146,565
C.2 Redemptions 15,189 3,528 – – 18,717
C.3 Negative changes in fair value 132,231 72 737 – 133,040
C.4 Writedowns for impairment 51,959 4,520 – – 56,479
– taken to income statement 51,959 4,520 – – 56,479
– taken to equity – – – – –
C.5 Transfers to other portfolios – – – – –
C.6 Other changes 563,777 94,420 1,475 – 659,672
D. Closing balance 666,055 747,312 48,036 – 1,461,403
B.5 includes the following amounts in respect of demerger operations: “debt securities” (€33,084 thousand), “equity securities” (€36,842 thousand) and CIU units
(€45,164 thousand).
By convention, C.6 also includes annual changes in assets assigned but not derecognized.

CAPITALIA
NOTES TO THE FINANCIAL STATEMENTS
Section 5 – FINANCIAL ASSETS HELD TO MATURITY - ITEM 50
5.1 FINANCIAL ASSETS HELD TO MATURITY: COMPOSITION BY TYPE
Total 2006 Total 2005
Book value Fair value Book value Fair value
1. Debt securities 345,317 351,984 554,637 574,040
1.1 Structured securities – – – –
1.2 Other debt securities 345,317 351,984 554,637 574,040
2. Loans – – – –
3. Impaired assets – – – –
4. Assets assigned but not derecognized 446,674 453,737 236,498 244,771
Total 791,991 805,721 791,135 818,811
5.2 FINANCIAL ASSETS HELD TO MATURITY: COMPOSITION BY DEBTOR/ISSUER
Total 2006 Total 2005
1. Debt securities 345,317 554,637
a) Governments and central banks 101,710 264,355
b) Other government agencies 7,680 9,547
c) Banks 150,976 198,812
d) Other issuers 84,951 81,923
2. Loans – –
a) Governments and central banks – –
b) Other government agencies – –
c) Banks – –
d) Other – –
3. Impaired assets – –
a) Governments and central banks – –
b) Other government agencies – –
c) Banks – –
d) Other – –
4. Assets assigned but not derecognized 446,674 236,498
a) Governments and central banks 288,729 127,510
b) Other government agencies – –
c) Banks 144,709 94,186
d) Other 13,236 14,802
Total 791,991 791,135

108 109
5.3 FINANCIAL ASSETS HELD TO MATURITY: HEDGED ASSETS
None at 31 December 2006.
5.4 ASSETS HELD TO MATURITY OTHER THAN THOSE ASSIGNED BUT NOT DERECOGNIZED AND IMPAIRED ASSETS:
ANNUAL CHANGE
Debt securities Loans Total
A. Opening balance 554,637 – 554,637
B. Increases 37,974 – 37,974
B.1 Purchases – – –
B.2. Writebacks 1,511 – 1,511
B.3 Transfers from other portfolios – – –
B4. Other changes 36,463 – 36,463
C. Decreases 247,294 – 247,294
C1. Sales – – –
C2. Redemptions 35,943 – 35,943
C.3 Writedowns – – –
C.4 Transfers to other portfolios – – –
C5. Other changes 211,351 – 211,351
D. Closing balance 345,317 – 345,317
By convention, C.5 also includes annual changes in assets assigned but not derecognized.

CAPITALIA
NOTES TO THE FINANCIAL STATEMENTS
Section 6 – LOANS TO BANKS - ITEM 60
6.1 LOANS TO BANKS: COMPOSITION BY TYPE
Total 2006 Total 2005
A Claims on central banks 410,149 574,740
1. Tied deposits – –
2. Reserve requirement 410,074 554,728
3. Repurchase agreements – –
4. Other 75 20,012
B Loans to banks 38,747,946 36,484,801
1. Current accounts and free deposits 5,317,980 3,186,056
2. Tied deposits 28,921,424 21,753,483
3. Other financing 4,362,717 11,366,238
3.1 repurchase agreements 4,186,458 11,284,772
3.2 finance leases – –
3.3 other 176,259 81,466
4. Debt securities 126,286 179,024
4.1 Structured – –
4.2 Other debt securities 126,286 179,024
5. Impaired assets – –
6. Assets assigned but not derecognized 19,539 –
Total (book value) 39,158,095 37,059,541
Total (fair value) 39,156,822 37,059,977
6.2 LOANS TO BANKS: ASSETS HEDGED SPECIFICALLY
Total 2006 Total 2005
1. Loans covered specifically by fair value hedges 698,427 709,867
a) interest rate risk 698,427 709,867
b) exchange rate risk – –
c) credit risk – –
d) multiple risks – –
2. Loans covered specifically by fair value hedges – –
a) interest rate risk – –
b) exchange rate risk – –
c) other – –
Total 698,427 709,867
6.3 FINANCE LEASES
None at 31 December 2006.

110 111
Section 7 – LOANS TO CUSTOMERS - ITEM 70
7.1 LOANS TO CUSTOMERS: COMPOSITION BY TYPE
Total 2006 Total 2005
1. Current accounts – –
2. Repurchase agreements 563,303 919,996
3. Mortgage loans – –
4. Credit cards, personal loans and loans backed by salaries – –
5. Finance leases – –
6. Factoring – –
7. Other 656,891 820,324
8. Debt securities 1,528 20,662
8.1 structured – –
8.2 Other debt securities 1,528 20,662
9. Impaired assets 1,621,114 1,745,950
10. Assets assigned but not derecognized – –
Total (book value) 2,842,836 3,506,932
Total (fair value) 2,842,821 3,506,830

CAPITALIA
NOTES TO THE FINANCIAL STATEMENTS
7.2 LOANS TO CUSTOMERS: COMPOSITION BY TYPE OF DEBTOR/ISSUER
Total 2006 Total 2005
1. Debt securities 1,528 20,662
a) Governments – –
b) Other government agencies – –
c) Other issuers 1,528 20,662
– non-financial companies 1,528 2,642
– financial companies – 18,020
– insurance undertakings – –
– other – –
2. Loans to: 1,220,194 1,740,320
a) Governments – –
b) Other government agencies – –
c) Other 1,220,194 1,740,320
– non-financial companies 106,159 30,249
– financial companies 1,068,448 1,596,466
– insurance undertakings – –
– other 45,587 113,605
3. Impaired assets: 1,621,114 1,745,950
a) Governments – –
b) Other government agencies 18,949 21,234
c) Other 1,602,165 1,724,716
– non-financial companies 1,222,402 1,311,487
– financial companies 38,742 40,095
– insurance undertakings – –
– other 341,021 373,134
4. Assets assigned but not derecognized: – –
a) Governments – –
b) Other government agencies – –
c) Other – –
– non-financial companies – –
– financial companies – –
– insurance undertakings – –
– other – –
Total 2,842,836 3,506,932
7.3 LOANS TO CUSTOMERS: ASSETS HEDGED SPECIFICALLY
None at 31 December 2006.
7.4 FINANCE LEASES
None at 31 December 2006.

112 113
Section 8 – HEDGING DERIVATIVES - ITEM 80
8.1 HEDGING DERIVATIVES: COMPOSITION BY TYPE OF CONTRACT AND UNDERLYING
Interest Foreign Equity Loans Other Total
rates currencies securities
and gold
A Listed
1) Financial derivatives – – – – – –
a) with exchange of principal – – – – – –
– options purchased – – – – – –
– other derivatives – – – – – –
b) without exchange of principal – – – – – –
– options purchased – – – – – –
– other derivatives – – – – – –
2) Credit derivatives – – – – – –
a) with exchange of principal – – – – – –
b) without exchange of principal – – – – – –
Total (A) – – – – – –
B
Unlisted
1) Financial derivatives 270,917 14,732 – – – 285,649
a) with exchange of principal – 14,732 – – – 14,732
– options purchased – – – – – –
– other derivatives – 14,732 – – – 14,732
b) without exchange of principal 270,917 – – – – 270,917
– options purchased – – – – – –
– other derivatives 270,917 – – – – 270,917
2) Credit derivatives – – – – – –
a) with exchange of principal – – – – – –
b) without exchange of principal – – – – – –
Total (B) 270,917 14,732 – – – 285,649
Total (A+B) 270,917 14,732 – – – 285,649
Total (A+B) 2005 473,769 12,260 – – – 486,029

CAPITALIA
NOTES TO THE FINANCIAL STATEMENTS
8.2 HEDGING DERIVATIVES: COMPOSITION BY HEDGED PORTFOLIO AND TYPE OF HEDGING
Fair value
Cash flow
Specific
Interest exchange credit price multiple
Generic Specific Generic
rate risk rate risk risk risk risks
1. Financial assets available for sale – – – – – X – X
2. Loans 32.735 – – X – X – X
3. Financial assets held to maturity X – – X – X – X
4. Portfolio X X X X X – X –
Total assets 32.735 – – – – – – –
1. Financial liabilities 238.183 5.829 – X 8.902 X – X
2. Portfolio X X X X X – X –
Total liabilities 238.183 5.829 – – 8.902 – – –
Section 9 – VALUE ADJUSTMENTS OF FINANCIAL ASSETS HEDGED GENERICALLY - ITEM 90
Item 90 “Value adjustments of financial assets hedged generically” is not present in the 2006 and 2005 financial
statements.

114 115
Section 10 - EQUITY INVESTMENTS - ITEM 100
10.1 EQUITY INVESTMENTS IN SUBSIDIARIES, JOINT VENTURES AND IN COMPANIES SUBJECT TO SIGNIFICANT
INFLUENCE: INFORMATION ON INVESTMENTS
Name Registered office % holding % of votes
A.Wholly-owned subsidiaries
BANCA DI ROMA S.p.A. Rome 100,00
BANCO DI SICILIA S.p.A. Palermo 100,00
BASICA Soc.per lo Sviluppo di Sist. Informativi
Comp. Avanzati S.p.A. (in liquidation) Potenza 100,00
BdR ROMA PRIMA IRELAND LIMITED Dublin 99,90
BIPOP CARIRE S.p.A. Brescia 100,00
BOX 2004 Società per Azioni Rome 100,00
CAPITALIA ASSET MANAGEMENT S.p.A.
Società di Gestione del Risparmio Rome 100,00
CAPITALIA INFORMATICA S.p.A. Rome 100,00
CAPITALIA INVESTIMENTI ALTERNATIVI
Società di Gestione del Risparmio S.p.A. Milan 95,00
CAPITALIA INVESTMENT MANAGEMENT S.A. a) Luxembourg 0,003
CAPITALIA LUXEMBOURG S.A. Luxembourg 99,999
CAPITALIA MERCHANT S.p.A. Rome 100,00
CAPITALIA PARTECIPAZIONI S.p.A. Rome 100,00
CAPITALIA SERVICE J.V. S.r.l Rome 51,00
CAPITALIA Sofipa Società di
Gestione del Risparmio (SGR) S.p.A. Rome 100,00
CAPITALIA SOLUTIONS S.p.A. Rome 100,00
COFIRI S.p.A. Rome 100,00
CORIT Concessionaria Riscossione Tributi S.p.A. (in liquidation) Rome 60,00
EDIPASS S.p.A. (in liquidation) Potenza 55,00
ENTASI S.r.l. Rome 100,00
EUROFINANCE 2000 S.r.l. Rome 98,97
EUROPEAN TRUST Società Fiduciaria per azioni Brescia 100,00
FINECO FINANCE Limited Dublin 100,00
FINECO LEASING S.p.A. Brescia 99,99
FINECO VERWALTUNG AG Frankfurt am Main 100,00
FINECOBANK S.p.A. Milan 99,99
FONDI IMMOBILIARI ITALIANI
Società di Gestione del Risparmio S.p.A. Rome 51,55
GE.S.E.T.T. Gestione Serv.Esazione Tributi
e Tesorerie S.p.A (in liquidation) Potenza 98,45
IPSE 2000 S.p.A. Rome 50,00001

CAPITALIA
NOTES TO THE FINANCIAL STATEMENTS
Name Registered office % holding % of votes
KYNESTE S.p.A. Rome 100,00
MCC - SOFIPA INTERNATIONAL S.A.
(en liquidation) Bruxelles 100,00
MCC S.p.A. Rome 100,00
MEDIOTRADE S.p.A. (in liquidation) Rome 100,00
NITHER S.p.A. Rome 100,00
REIMMOBILIARE S.p.A. Rome 100,00
ROMAFIDES Fiduciaria e Servizi S.p.A. Rome 100,00
SANITÀ Srl (in liquidation) Rome 99,60
SERIT S.p.A. (in liquidation) Rome 100,00
SOCIETÀ AMMINISTRAZIONE
IMMOBILI S.A.IM. S.p.A. (in liquidation) Rome 60,00
SOCIETÀ ITALIANA
GESTIONE ED INCASSO CREDITI S.p.A. Rome 95,00
SOFIGERE Sociètè par Actions Simplifièe Paris 100,00
SPAGET S.p.A (in liquidation) Rome 100,00
TREVI FINANCE N. 3 S.r.l. Conegliano (TV) 60,00
TREVI FINANCE N. 2 S.p.A. Conegliano (TV) 60,00
TREVI FINANCE S.p.A. Conegliano (TV) 60,00
B. Joint ventures
C. Companies under significant influence
Agenzia per l’innovazione Tecnologica -
AGITEC S.p.A. (in liquidation) Rome 25,00
ATHENA PRIVATE EQUITY S.A. Luxembourg 23,88
CAPITALIA ASSICURAZIONI S.p.A. Milan 49,00
CNP CAPITALIA VITA S.p.A. b) Milan 16,92
CONSORTIUM S.r.l. Milan 31,24
FIDIA FONDO INTERB. D’INVESTIMENTO
AZIONARIO SGR S.p.A. Milan 25,00
G.B.S. GENERAL BROKER SERVICE S.p.A. Rome 20,00
MILANO EST S.p.A. Milan 34,63
NUOVA TEATRO ELISEO S.p.A. Rome 41,01
SOCIETÀ GESTIONE PER IL REALIZZO S.p.A c) Rome 15,74
SOCIETÀ PER L’INGEGNERIA D’IMPRESA S.r.l. d) Rome 33,33
TECNOSERVIZI MOBILI S.r.l. Rome 49,00
a) Further 99,997% is held by Capitalia Luxembourg S.A.
b) Further 21,88% is held by Fineco Verwaltung AG
c) Further 4,23% is held by Banco di Sicilia S.p.A.;
0,08% by Bipop Carire S.p.A.;
0,05% by IRFIS - Mediocredito della Sicilia S.p.A.
d) As a result of a capital increase at the start of 2007, in which Capitalia did not partecipate, Capitalia’s holding decreases to 10,786%.

116 117
10.2 EQUITY INVESTMENTS IN SUBSIDIARIES, JOINT VENTURES AND COMPANIES SUBJECT TO SIGNIFICANT
INFLUENCE: ACCOUNTING DATA
A. Wholly-owned subsidiaries
Total Total Profit Shareholders’ Book Fair
assets revenues (loss) equity value value
a) BANCA DI ROMA S.p.A. 62,223,522 5,035,794 513,730 5,092,208 4,629,211 X
a) BANCO DI SICILIA S.p.A. 25,024,924 2,001,516 256,062 1,346,963 1,658,496 X
a) BASICA Soc. per lo Sviluppo
di Sist. Informativi Comp. Avanzati
S.p.A. in (liquid.) 1,592 32 (90) (3,514) – X
a) BdR ROMA PRIMA IRELAND LIMITED 51,537 1,292 1,274 51,517 50,237 X
a) BIPOP CARIRE S.p.A. 11,222,438 770,467 73,903 1,001,266 818,835 X
b) BOX 2004 Società per Azioni 8,980 155 (1,394) 7,672 9,066 X
a) CAPITALIA ASSET MANAGEMENT S.p.A.
Società di Gestione del Risparmio 147,454 431,481 38,037 74,062 483,210 X
a) CAPITALIA INFORMATICA S.p.A. 377,914 445,828 4,838 99,729 84,986 X
a) CAPITALIA INVESTIMENTI ALTERNATIVI
Società di Gestione del Risparmio S.p.A. 7,796 4,302 148 6,199 5,642 X
b) CAPITALIA INVESTMENT
MANAGEMENT S.A. 16,909 42,519 4,278 12,126 – X
b) CAPITALIA LUXEMBOURG S.A. 1,429,865 63,934 6,414 206,193 186,901 X
b) CAPITALIA MERCHANT S.p.A. 340,811 29,510 16,608 327,447 307,002 X
a) CAPITALIA PARTECIPAZIONI S.p.A. 2,597,754 204,712 38,020 1,435,685 1,250,638 X
a) CAPITALIA SERVICE J.V. S.r.l. 25,673 49,161 11 1,062 789 X
a) CAPITALIA – SOFIPA Società di Gestione
del Risparmio (SGR) S.p.A. 11,316 7,003 706 7,181 6,688 X
a) CAPITALIA SOLUTIONS S.p.A. 146,524 330,425 308 10,289 9,109 X
b) COFIRI S.p.A. 15,612 7,860 4,139 14,287 7,717 X
b) CORIT Concessionaria Riscossione
Tributi S.p.A. (in liquid.) 3,888 182 (82) 423 459 X
a) EDIPASS S.p.A. (in liquid.) 185 2 (36) (36) – X
a) ENTASI S.r.l. 34 40 – 10 9 X
a) EUROFINANCE 2000 S.r.l. 73 52 2 42 23 X
a) EUROPEAN TRUST Società Fiduciaria
per azioni 1,534 794 29 1,267 1,454 X
a) FINECO FINANCE Limited 3,081,467 142,399 23,587 359,504 280,025 X
a) FINECO LEASING S.p.A. 6,013,107 349,050 26,670 131,464 215,069 X
a) FINECO VERWALTUNG AG 195,014 8,767 8,474 194,367 96,652 X
a) FINECOBANK S.p.A. 9,094,155 790,629 65,103 313,194 765,873 X
a) FONDI IMMOBILIARI ITALIANI Società
di Gestione del Risparmio S.p.A. 38,756 27,314 5,420 24,209 61,092 X

CAPITALIA
NOTES TO THE FINANCIAL STATEMENTS
a) GE.S.E.T.T. Gestione Serv. Esazione Tributi
Total Total Profit Shareholders’ Book Fair
assets revenues (loss) equity value value
e Tesorerie S.p.A. (in liquid.) 656 2 (61) 567 127 X
a) IPSE 2000 S.p.A. 32,384 702 (11,461) 20,545 5,351 X
a) KYNESTE S.p.A. 24,689 20,312 1,544 17,790 24,774 X
a) MCC S.p.A. 12,716,528 757,655 62,282 954,387 1,012,807 X
c) MCC – SOFIPA INTERNATIONAL S.A.
(in liquid.) 1,515 62 (124) 1,402 1,070 X
a) MEDIOTRADE S.p.A. (in liquid.) 701 190 73 657 547 X
a) NITHER S.p.A. 70,472 3,498 (1,217) 20,806 20,808 X
a) REIMMOBILIARE S.p.A. 23,544 1,158 (48) 6,594 6,594 X
b) ROMAFIDES Fiduciaria e Servizi S.p.A. 2,701 1,809 146 1,552 1,301 X
c) SANITÀ S.r.l. (in liquid.) 1,329 23,728 20,876 (5,251) – X
b) SERIT S.p.A. (in liquid.) 41,992 3 (264) 331 329 X
a) SOCIETÀ AMMINISTRAZIONE IMMOBILI
S.A.IM. S.p.A. (in liquid.) 4,194 214 149 1,525 54 X
a) SOCIETÀ ITALIANA GESTIONE ED
INCASSO CREDITI S.p.A. 7,238 10,910 88 2,757 981 X
a) SOFIGERE Société par Actions Simplifièe 20,979 2,403 175 219 40 X
b) SPAGET S.p.A (in liquid.) 1,530 38 (105) 752 1,004 X
a) TREVI FINANCE N. 3 S.r.l. 160 83 26 135 7 X
a) TREVI FINANCE N. 2 S.p.A. 191 78 4 153 63 X
a) TREVI FINANCE S.p.A. 151 78 4 112 59 X
B. Joint ventures
–
C. Companies under significant influence
c) AGENZIA PER L’INNOVAZIONE
TECNOLOGICA – AGITEC S.p.A.
(in liquid.) 440 143 (555) (204) – X
d) ATHENA PRIVATE EQUITY S.A. 150,298 22,501 13,773 147,319 28,418 X
c) CAPITALIA ASSICURAZIONI S.p.A. 39,085 16,009 468 9,379 3,977 X
c) CNP CAPITALIA VITA S.p.A. 13,943,107 3,219,943 55,881 363,379 120,060 X
e) CONSORTIUM S.r.l. 11,019 376 – 10,358 3,236 X
c) FIDIA FONDO INTERB.
D’INVESTIMENTO AZIONARIO
SGR S.p.A. 12,964 2,744 (3,646) 11,456 2,706 X
f) G.B.S. GENERAL BROKER
SERVICE S.p.A. 9,972 8.458 48 1,242 52 X

118 119
Total Total Profit Shareholders’ Book Fair
assets revenues (loss) equity value value
g) MILANO EST S.p.A. 14,938 11 (380) 6,095 2,110 X
c) NUOVA TEATRO ELISEO S.p.A. 5,626 6,720 (464) 1,216 492 X
g) SOCIETÀ GESTIONE PER IL
REALIZZO S.p.A. 61,620 41,453 31,043 55,430 2,395 X
g) SOCIETÀ PER L’INGEGNERIA
D’IMPRESA S.r.l. 55,098 316 (20,713) 7,302 2,063 X
c) TECNOSERVIZI MOBILI S.r.l. 2,341 3,908 493 1,797 51 X
a) Draft of financial statements at 31.12.2006
b) Financial statements at 31.12.2006
c) Financial statements at 31.12.2005
d) Financial statements at 30.09.2005
e) Situation at 31.12.2006
f) Financial statements at 30.06.2006
g) Situation at 30.09.2006
For fully consolidated companies, the figures are those reported for the preparation of the consolidated financial statements; for other companies, the figures are
those for the most recently available accounts/financial statements.

CAPITALIA
NOTES TO THE FINANCIAL STATEMENTS
10.3 EQUITY INVESTMENTS: CHANGE FOR THE YEAR
Total 2006 Total 2005
A. Opening balance 10,983,076 9,117,140
B. Increases 2,128,771 2,621,837
B.1 Purchases 1,925,270 206,789
B.2 Writebacks – –
B.3. Revaluations – –
B4. Other changes 203,501 2,415,048
C. Decreases 941,188 755,901
C1. Sales 60,786 112,350
C,2 Writedowns 42,704 27,993
C3. Other changes 837,698 615,558
D. Closing balance 12,170,659 10,983,076
E. Total revaluations – –
F. Total writedowns 193,196 179,017
B.4 includes 8,417 in respect of demerger operations.
10.4 COMMITMENTS IN RESPECT OF SUBSIDIARIES
At 31 December 2006 there were no commitments in respect of subsidiaries.
10.5 COMMITMENTS IN RESPECT OF JOINT VENTURES
At 31 December 2006 there were no joint ventures.
10.6 COMMITMENTS IN RESPECT OF EQUITY INVESTMENTS IN COMPANIES SUBJECT TO SIGNIFICANT
INFLUENCE
At 31 December 2006 there were no commitments in respect of companies subject to significant influence.

120 121
Section 11 – TANGIBLE ASSETS – ITEM 110
11.1 TANGIBLE ASSETS: COMPOSITION OF ASSETS MEASURED AT COST
Total 2006 Total 2005
A Assets used in operations
1.1 owned 260,582 126,880
a) land 166,222 79,305
b) buildings 84,584 39,783
c) furnitures 2,215 1,818
d) electrical plant 1,590 2,431
e) other 5,971 3,543
1.2 acquired under finance leases – –
a) land – –
b) buildings – –
c) furnitures – –
d) electrical plant – –
e) other – –
Total (A) 260,582 126,880
B Assets held for investment
2.1 owned 1,836,069 120,508
a) land 566,256 74,426
b) buildings 1,269,813 46,082
2.2 acquired under finance leases – –
a) land – –
b) buildings – –
Total (B) 1,836,069 120,508
Total (A+B) 2,096,651 247,388
11.2 TANGIBLE ASSETS: COMPOSITION OF ASSETS DESIGNATED AT FAIR VALUE VALUTATE AL FAIR VALUE OR REVALUED
None at 31 December 2006.

CAPITALIA
NOTES TO THE FINANCIAL STATEMENTS
11.3 TANGIBLE ASSETS USED IN OPERATIONS: CHANGE FOR THE YEAR
Land Buildings Furnitures Electrical Other Total
plant
A. Opening gross balance 79,305 41,415 2,771 4,228 12,822 140,541
A.1 Total net writedowns – 1,632 953 1,797 9,279 13,661
A.2 Opening net balance 79,305 39,783 1,818 2,431 3,543 126,880
B. Increases 86,917 46,544 721 – 3,115 137,297
B.1 Purchases – – 721 – 3,115 3,836
B.1.1 business combinations – – – – – –
B.2 Capitalized expenses
for improvements – 3,001 – – – 3,001
B.3. Writebacks – – – – – –
B.4 Positive changes in fair value
recognized in – – – – – –
a) equity – – – – – –
b) income statement – – – – – –
B.5 Positive exchange rate differences – – – – – –
B.6 Transfers from land and buildings
held for investment – – – – – –
B7. Other changes 86,917 43,543 – – – 130,460
C. Decreases – 1,743 324 841 687 3,595
C1. Sales – – – – – –
C.2 Depreciation – 1,743 324 841 687 3,595
C3. Writedowns for impairment
recognized in – – – – – –
– equity – – – – – –
– income statement – – – – – –
C.4 Negative changes in fair value
recognized in – – – – – –
a) equity – – – – – –
b) income statement – – – – – –
C.5 Negative exchange rate differences – – – – – –
C.6. Transfers to – – – – – –
a) tangible assets
held for investment – – – – – –
b) assets being divested – – – – – –
C7. Other changes – – – – – –
D. Closing net balance 166,222 84,584 2,215 1,590 5,971 260,582
D.1 Total net writedowns – 5,281 1,277 2,638 9,836 19,032
D.2 Closing gross balance 166,222 89,865 3,492 4,228 15,807 279,614
E. Valuation at cost 166,222 84,584 2,215 1,590 5,971 260,582
B.7 includes the following amounts in respect of demerger operations: 86,816 (land) and 43,491 (buildings).

122 123
11.4 TANGIBLE ASSETS HELD FOR INVESTMENT: CHANGE FOR THE YEAR
Land
Building
A. Opening gross balance 74,426 47,963
A.1 Total net writedowns – 1,881
A.2 Opening net balance 74,426 46,082
B. Increases 493,239 1,252,103
B.1 Purchases – 42,734
B.1.1 business combinations – –
B.2 Capitalized expenses for improvements – 29,437
B.3 Positive changes in fair value – –
B.4. Writebacks – –
B.5 Positive exchange rate differences – –
B.6 Transfers from land and buildings used in operations – –
B7. Other changes 493,239 1,179,932
C. Decreases 1,409 28,372
C.1 Sales 1,409 2,204
C.2 Depreciation – 25,841
C.3 Negative changes in fair value – –
C.4 Writedowns for impairment – –
C.5 Negative exchange rate differences – –
C.6 Transfers to other asset categories: – –
a) land and buildings used in operations – –
b) non-current assets being divested – –
C7. Other changes – 327
D. Closing net balance 566,256 1,269,813
D.1 Total net writedowns – 75,472
D.2 Closing gross balance 566,256 1,345,285
E. Valuation at fair value – –
B.7 includes the following amounts in respect of demerger operations: 492,668 (land) and 1,178,498 (buildings).
11.5 COMMITMENTS TO PURCHASE TANGIBLE ASSETS
At 31 December 2006 Capitalia S.p.A. had contractual commitments to acquire property in the amount of about €76
million, of which €67 million in respect of 29 units owned by the Banca di Roma employee pension fund, the sale of which
was completed in January 2007.

CAPITALIA
NOTES TO THE FINANCIAL STATEMENTS
Section 12 - INTANGIBLE ASSETS - ITEM 120
12.1 INTANGIBLE ASSETS: COMPOSITION BY CATEGORY
Total 2006 Total 2005
Limited life Unlimited life Limited life Unlimited life
A.1 Goodwill X 17.835 X –
A.2 Other intangible assets 4,611 – 8,614 –
A.2.1 Assets carried at cost 4,611 – 8,614 –
a) intangible assets
developed in-house – – – –
b) other assets (*) 4,611 – 8,614 –
A.2.2 Assets carried at fair value: – – – –
a) intangible assets
developed in-house – – – –
b) other assets – – – –
Total 4,611 17,835 8,614 –
(*) This includes deferred costs regarding software depreciated at a rate of 20% with a useful life of 1 year (€0.4 million), 2 years (€1.8 million), 3 years (€2 million)
and 4 years (€0.4 million)

124 125
12.2 INTANGIBLE ASSETS: CHANGE IN YEAR
Other intangible assets:
developed in-house
Other intangible assets:
other
Goodwill limited life unlimited life limited life unlimited life Total
A. Opening balance – – – 22,873 – 22,873
A.1 Total net writedowns – – – 14.260 – 14.260
A.2 Opening net balance – – – 8.613 – 8.613
B. Increases 17,835 – – – – 17,835
B.1 Purchases – – – – – –
B.1.1 business combinations – – – – – –
B.2 Increases in internal intangible assets X – – – – –
B.3. Writebacks X – – – – –
B.4 Positive changes in fair value – – – – – –
– equity X – – – – –
– income statement X – – – – –
B.5 Positive exchange rate differences – – – – – –
B6. Other changes 17,835 – – – – 17,835
C. Decreases – – – 4,002 – 4,002
C1. Sales – – – – – –
C.2 Writedowns – – – 4,002 – 4,002
– Amortization X – – 4,002 – 4,002
– Writedowns – – – – – –
+ equity X – – – – –
+ income statement – – – – – –
C.3 Negative changes in fair value – – – – – –
– equity X – – – – –
– income statement X – – – – –
C.4 Transfers to non-current assets
being divested – – – – – –
C.5 Negative exchange rate differences – – – – – –
C6. Other changes – – – – – –
D. Closing net balance 17,835 – – 4,611 – 22,446
D.1 Total net writedowns – – – 18,262 – 18,262
E. Closing gross balance 17,835 – – 22,873 – 40,708
F. Valuation at cost 17,835 – – 4,611 – 22,446
12.3 OTHER INFORMATION
There is no other material information concerning intangible assets.

CAPITALIA
NOTES TO THE FINANCIAL STATEMENTS
Section 13 – TAX ASSETS AND LIABILITIES-
ITEM 130 OF ASSETS AND ITEM 80 OF LIABILITIES
The item “tax assets”, equal to €2,608.86 million is
composed of “current tax assets” of €1,485.50 million
and “deferred tax assets” of €1,123.36 million. The item
“tax liabilities”, equal to €360.91 million, is composed of
“current tax liabilities” of €121.16 million and “deferred
tax liabilities” of €239.75 million.
Accordingly, as from 1 January 2006 the companies
participating in the consolidated taxation mechanism of
Capitalia are the following: Banca di Roma, Banco di
Sicilia, Bipop-Carire, MCC, Capitalia L&F (now merged
into MCC), Capitalia Informatica, Kyneste, Cofiri,
FinecoBank, Capitalia AM, Capitalia IA, Fineco Leasing,
IRFIS, Immobiliare Piemonte, Mediotrade in liquidazione,
Capitalia Partecipazioni, Capitalia Merchant, Nither and
Sanità in liquidazione.
The calculation of these asset and liability items also
reflects the adoption of the national consolidated
taxation mechanism and the application of IAS/IFRS.
THE NATIONAL CONSOLIDATED TAXATION MECHANISM
As the consolidating entity, Capitalia has elected to
adopt “national consolidated taxation” – introduced with
Legislative Decree 344 of 12 December 2003 for the
period from 2004 to 2006 for the following direct and
indirect subsidiaries: Banca di Roma, Banco di Sicilia,
Bipop-Carire, MCC, Capitalia L&F (merged into MCC
with accounting and tax effects as from 1 January 2006),
Capitalia Informatica, IRFIS and Immobiliare Piemonte.
As from 1 January 2005 another three subsidiaries,
Kyneste, Cofiri and Mediotrade in liquidazione (the latter
controlled indirectly through MCC), are also participating
in the mechanism for the period 2005-2007. In addition,
as from the same date the consolidated taxation
mechanism of Fineco (with the participation of
FinecoBank, Capitalia AM, Capitalia IA and Fineco
Leasing) is continuing within the consolidated taxation
mechanism of Capitalia.
As from 1 January 2006 another four subsidiaries are
also participating in the mechanism for the period
2006–2008: Akros Casa in liquidazione (now Capitalia
Partecipazioni), Fineco Merchant (now Capitalia
Merchant), Nither and Sanità in liquidazione.
The adoption of this tax regime permits:
total exemption from taxation of dividends
distributed among companies participating in the
consolidated tax mechanism in a given tax period;
the comprehensive and permanent introduction of an
offsetting mechanism for IRES credits and liabilities (IRES
is the corporate income tax) among Group companies;
immediate total or partial use of tax losses for the
period of the participating companies, reducing the
taxable income of the other Group companies.
As a result of this election:
a) Capitalia’s taxable result for the year could be fully offset
immediately against the taxable income of the consolidated
companies, giving rise to the recognition of the related
revenues under “Income taxes” in the income statement;
b) taking account of the related contractual agreements,
the item “Income taxes” also includes the charges
corresponding to the amounts transferred by the
consolidating entity to the consolidated companies against
the tax benefits deriving from the taxation mechanism.
CURRENT TAX ASSETS/LIABILITIES
“Current tax assets”, equal to €1,485.50 million, are
mainly attributable to tax credits, advances paid and

126 127
withholdings incurred. “Current tax liabilities”, equal to
€121.16 million, mainly regard the Group IRES liability
resulting from the application of the consolidated
taxation mechanism.
writedowns of securities issued as part of
securitizations in the amount of €144.45 million;
writedowns of shares, bonds and other securities in
the amount of €227.28 million;
DEFERRED TAX ASSETS AND LIABILITIES
In accordance with current legislation and regulations:
provisions for liabilities and contingencies in the
amount of €95.58 million.
deferred tax assets for IRES purposes are recognized
on the basis of the new group taxation rules, taking
account of forecast earnings performance in future years,
in line with the decisions of the competent corporate
bodies;
13.2 DEFERRED TAX LIABILITIES: COMPOSITION
The balance at 31 December 2006 of deferred tax
liabilities essentially arises in relation to the following
temporary differences:
deferred tax assets for IRAP purposes are recognized
on the basis of forecast earnings performance in future
years, taking account of developments in the relevant
regulatory framework;
deferred tax liabilities are recognized in all
appropriate circumstances, unless there is little possibility
that they will give rise to an actual tax charge.
For details on “deferred tax assets” please see sections
13.1, 13.3 and 13.5, while for details on “deferred tax
liabilities” please see points 13.2, 13.4 and 13.6.
13.1 DEFERRED TAX ASSETS: COMPOSITION
writebacks of shares, bonds and other securities in
the amount of €203.74 million;
default interest accruing but not collected during the
year in the amount of €11.45 million.
13.3 CHANGES IN DEFERRED TAX ASSETS (WITH CON-
TRA-ITEM IN INCOME STATEMENT)
The main changes in deferred tax asset recognized in the
income statement regard loan writedowns and writedowns
of equity investments deductible over more than one year,
provisions for liabilities and contingencies and related uses,
and writedowns of shares, bonds and other securities.
The balance at 31 December 2006 deferred tax assets
in respect of prepaid taxes essentially arises in relation to
the following temporary differences:
Decreases recognized in the income statement include
the reversal of deferred tax assets in respect of past tax
losses, fully offset by consolidated taxation for the year.
loan writedowns deductible over several years in the
amount of €515.96 million;
writedowns of equity investments deductible over
more than one year in the amount of €23.19;
The total decrease in deferred tax assets for the year
came to €86.65 million, nearly all in respect of IRES. The
change does not correspond to that reported at point 4
of Table 18.1 “Income tax for the period on continuing
operations: composition” since it includes:

CAPITALIA
NOTES TO THE FINANCIAL STATEMENTS
an increase of €47.40 million regarding deferred tax
assets recognized in respect of the demergers in favor of
Capitalia during the year;
a decrease of €11.05 million in respect of the use of
past tax losses to offset the tax liability for the period in
respect of balance sheet components.
CHANGES IN DEFERRED TAX ASSETS (CONTRA-ITEM IN INCOME STATEMENT)
Total 2006 Total 2005
1. Opening balance 1,155,420 716,823
2. Increases 435,000 1,031,099
2.1 Deferred tax assets arising during the year 225,019 967,444
a) in respect of previous periods – –
b) due to changes in accounting policies – 658,779
c) writebacks – –
d) other 225,019 308,665
2.2 New taxes or increases in tax rates – –
2.3 Other increases 209,981 63,655
3. Decreases 521,653 592,502
3.1 Deferred tax assets eliminated during the year 347,347 587,045
a) reversals 347,347 587,045
b) writedowns for supervening non–recoverability – –
c) due to change in accounting policies – –
3.2 Reduction in tax rates – –
3.3 Other decreases 174,306 5,457
4, Closing balance 1,068,767 1,155,420
Point 2.3 includes 47,396 in respect of demerger operations.
13.4 CHANGES IN DEFERRED TAX LIABILITIES (WITH
CONTRA-ITEM IN THE INCOME STATEMENT)
The main changes mainly regard default interest
accruing but not collected in the year, writebacks of
shares, bonds and other securities and the realization of
shares on which non-taxable writebacks had previously
been recognized.
The increase in deferred tax liabilities for the year
came to €107.23 million, nearly all of which regards
IRES. The change does not correspond to that reported
at point 5 of Table 18.1 “Income tax for the period on
continuing operations: composition” since it includes
increases of €27.67 million in respect of the demergers
in favor of Capitalia during the year.

128 129
13.4 CHANGES IN DEFERRED TAX LIABILITIES (CONTRA-ITEM IN INCOME STATEMENT)
Total 2006 Total 2005
1. Opening balance 78,021 64,261
2. Increases 165,558 157,709
2.1 Deferred tax liabilities arising during the year 88,587 152,833
a) in respect of previous periods – –
b) due to changes in accounting policies – 100,781
c) other 88,587 52,052
2.2 New taxes or increases in tax rates – –
2.3 Other increases 76,971 4,876
3. Decreases 58,325 143,949
3.1 Deferred tax liabilities eliminated during the year 27,739 133,860
a) reversals 27,739 133,860
b) due to changes in accounting policies – –
c) other – –
3.2 Reduction in tax rates – –
3.3 Other decreases 30,586 10,089
4. Closing balance 185,254 78,021
Point 2.3 includes €27,666 in respect of demerger operations.
13.5 CHANGES IN DEFERRED TAX ASSETS (WITH CONTRA-ITEM IN EQUITY)
The changes recognized in equity (€7.13 million) essentially regard writedowns of available-for-sale securities and the
realization of shares in the same category on which non-deductible writedowns had previously been recognized.

CAPITALIA
NOTES TO THE FINANCIAL STATEMENTS
CHANGES IN DEFERRED TAX ASSETS (CONTRA-ITEM IN SHAREHOLDERS’ EQUITY)
Total 2006 Total 2005
1. Opening balance 47,465 223,697
2. Increases 44,915 59,417
2.1 Deferred tax assets arising during the year 44,484 59,417
a) in respect of previous periods – –
b) due to changes in accounting policies – 42,611
c) other 44,484 16,806
2.2 New taxes or increases in tax rates – –
2.3 Other increases 431 –
3. Decreases 37,783 235,649
3.1 Deferred tax assets eliminated during the year 31,444 235,649
a) reversals 31,444 11,953
b) writedowns for supervening non-recoverability – –
c) due to change in accounting policies – 223,696
3.2 Reduction in tax rates – –
3.3 Other decreases 6,339 –
4. Closing balance 54,597 47,465
13.6 CHANGES IN DEFERRED TAX LIABILITIES (WITH CONTRA-ITEM IN EQUITY)
Deferred tax liabilities recognized in equity decreased by €3.66 million, essentially attributable to writebacks of
available-for-sale securities and the realization of shares in the same category on which non-taxable writebacks had
previously been recognized.

130 131
CHANGES IN DEFERRED TAX LIABILITIES (CONTRA-ITEM IN SHAREHOLDERS’ EQUITY)
Total 2006 Total 2005
1. Opening balance 58,152 –
2. Increases 52,136 61,377
2.1 Deferred tax liabilities arising during the year 49,978 61,377
a) in respect of previous periods – –
b) due to changes in accounting policies – 18,594
c) other 49,978 42,783
2.2 New taxes or increases in tax rates – –
2.3 Other increases 2,158 –
3. Decreases 55,796 3,225
3.1 Deferred tax liabilities eliminated during the year 38,528 3,225
a) reversals 38,528 3,225
b) due to changes in accounting policies – –
c) other – –
3.2 Reduction in tax rates – –
3.3 Other decreases 17,268 –
D. Closing balance 54,492 58,152
Point 2.3 includes 1,087 in respect of demerger operations.
13.7 OTHER INFORMATION
There is no other material information regarding tax assets and liabilities.

CAPITALIA
NOTES TO THE FINANCIAL STATEMENTS
Section 14 – NON-CURRENT ASSETS AND GROUPS OF ASSETS BEING DIVESTED AND ASSOCIATED
LIABILITIES - ITEM 140 OF ASSETS AND ITEM 90 OF LIABILITIES
14.1 NON-CURRENT ASSETS AND GROUPS OF ASSETS BEING DIVESTED: COMPOSITION BY TYPE
Total 2006 Total 2005
A. Individual assets
A.1 Equity investments – 4,108
A.2 Tangible assets – –
A.3 Intangible assets – –
A.4 Other non-current assets – –
Total A – 4,108
B. Groups of assets being divested (divested operating units)
B.1 Financial assets held for trading – –
B.2 Financial assets designated at fair value – –
B.3 Financial assets available-for-sale – –
B.4 Financial assets held to maturity – –
B.5 Loans to banks: – –
B.6 Loans to customers – –
B.7 Equity investments – –
B.8 Tangible assets – –
B.9 Intangible assets – –
B.10 Other assets – –
Total B – –
C. Liabilities in respect of individual assets being divested
C.1 Debt and payables – –
C.2 Securities – –
C.3 Other liabilities – –
Total C – –
D. Liabilities in respect of groups of assets being divested
D.1 Due to banks – –
D.2 Due to customers: – –
D.3 Securities outstanding – –
D.4 Financial liabilities held for trading – –
D.5 Financial liabilities designated at fair value – –
D.6 Provisions – –
D.7 Other liabilities – –
Total D – –

132 133
14.2 OTHER INFORMATION
None.
14.3 INFORMATION ON EQUITY INVESTMENTS IN COMPANIES SUBJECT TO SIGNIFICANT INFLUENCE
NOT ACCOUNTED FOR USING THE EQUITY METHOD
There is no material information concerning this item.
Section 15 – OTHER ASSETS - ITEM 150
15.1 OTHER ASSETS: COMPOSITION
Total 2006
Due from parent company for consolidated taxation mechanism 513,121
Amounts to be recovered from third parties 157,205
Receivables in respect of invoices 86,076
Coupons and securities traded or drawn to be settled 15,212
Tax collection services 13,823
Items involved in legal disputes not related to lending operations 20,859
Accrued income and prepaid expenses 6,859
Accrued revenues 6,531
Other 184,682
Total 1,004,368

CAPITALIA
NOTES TO THE FINANCIAL STATEMENTS
LIABILITIES
Section 1 – DUE TO BANKS - ITEM 10
1.1 DUE TO BANKS. COMPOSITION BY TYPE
Total 2006 Total 2005
1 Due to central banks 1,020,971 1,787,585
2 Due to banks 26,930,899 28,754,467
2.1 Current accounts and free deposits 4,224,377 3,514,002
2.2 Tied deposits 16,150,553 14,962,394
2.3 Loans 4,576,077 8,202,932
2.3.1 finance leases – –
2.3.2 other 4,576,077 8,202,932
2.4 Liabilities in respect of commitments to repurchase own equity instruments 235,214 237,890
2.5 Liabilities in respect of assets assigned but not derecognized 1,744,678 1,837,249
2.5.1 repurchase agreements 1,744,678 1,837,249
2.5.2 other – –
2.6 Other payables – –
Total 27,951,870 30,542,052
Fair value 27,951,870 30,542,052
1.2 BREAKDOWN OF ITEM 10 “DUE TO BANKS”: SUBORDINATED LIABILITIES
No liabilities at 31 December 2006.
1.3 BREAKDOWN OF ITEM 10 “DUE TO BANKS”: STRUCTURED LIABILITIES
No liabilities at 31 December 2006.

134 135
1.4 BREAKDOWN OF ITEM 10 “DUE TO BANKS”: LIABILITIES HEDGED SPECIFICALLY
Total 2006 Total 2005
1. Liabilities covered by specific fair value hedges 1,105,042 239,482
a) interest rate risk – –
b) exchange rate risk 1,105,042 239,482
c) multiple risks – –
2. Liabilities covered by specific cash flow hedges – –
a) interest rate risk – –
b) exchange rate risk – –
c) other – –
Total 1,105,042 239,482
1.5 LIABILITIES IN RESPECT OF FINANCE LEASES
No liabilities at 31 December 2006.

CAPITALIA
NOTES TO THE FINANCIAL STATEMENTS
Section 2 – DUE TO CUSTOMERS - ITEM 20
2.1 DUE TO CUSTOMERS: COMPOSITION BY TYPE
Total 2006 Total 2005
1. Current accounts and free deposits – –
2. Tied deposits – –
3. Third-party funds under administration – –
4. Loans 243,685 1,659,729
4.1 finance leases – 1,659,729
4.2 other 243,685 –
5. Liabilities in respect of commitments to repurchase own equity instruments – –
6. Liabilities in respect of assets assigned but not derecognized 17,241 2,295,155
6.1 repurchase agreements 17,241 2,295,155
6.2 other – –
7. Other payables – –
Total 260,926 3,954,884
Fair value 260,926 3,954,884
2.2 BREAKDOWN OF ITEM 20 “DUE TO CUSTOMERS”: SUBORDINATED LIABILITIES
No liabilities at 31 December 2006.
2.3 BREAKDOWN OF ITEM 20 “DUE TO CUSTOMERS”: STRUCTURED LIABILITIES
No liabilities at 31 December 2006.
2.4 DUE TO CUSTOMERS: LIABILITIES HEDGED SPECIFICALLY
No liabilities at 31 December 2006.
2.5 LIABILITIES IN RESPECT OF FINANCE LEASES
No liabilities at 31 December 2006.

136 137
Section 3 – DEBT SECURITIES ISSUED - ITEM 30
3.1 DEBT SECURITIES ISSUED: COMPOSITION BY TYPE
Total 2006 Total 2005
book value fair value (*) book value fair value (*)
A. Listed 12,662,272 12,459,429 8,256,740 7,398,526
1. bonds 12,662,272 12,459,429 8,256,740 7,398,526
1.1 structured 5,537,842 5,367,465 5,147,601 4,295,155
1.2 other 7,124,430 7,091,964 3,109,139 3,103,371
2. other – – – –
2.1 structured – – – –
2.2 other – – – –
B. Unlisted 15,047,490 13,434,173 14,169,881 13,300,118
1. bonds 15,047,490 13,434,173 14,169,881 13,300,118
1.1 structured 5,931,061 5,044,154 5,769,018 4,594,991
1.2 other 9,116,429 8,390,019 8,400,863 8,705,127
2. other – – – –
2.1 structured – – – –
2.2 other – – – –
Total 27,709,762 25,893,602 22,426,621 20,698,644
(*) The figure does not include the fair value of embedded derivatives (1.2 billion in 2006 and 0.65 billion in 2005)
The portfolio of structured securities breaks down as follows: 55% equity linked securities; 25% securities linked to
interest rates; 9% convertible securities; 5% fund linked securities; and 6% inflation linked securities.

CAPITALIA
NOTES TO THE FINANCIAL STATEMENTS
3.2 BREAKDOWN OF ITEM 30 “DEBT SECURITIES ISSUED”: SUBORDINATED SECURITIES
Subordinated loan (1) book value interest rate coupon maturity date early redemption
option
Eur 230,000,000 173,074 fixed rate 3.50% gross annually.
From second year: floating rate equal
to 75% of the annual 10-year swap rate
for euro annual 30 March 2016 from 30 March 2011
Eur 300,000,000 272,214 First 2 years: nom. 3% annual.
6-month euribor + 0.20% thereafter half-yearly 3 August 2014 3 August 2009
Eur 300,000,000 254,500 First year: 2.65%. From 2nd to 5th year:
0.80% + any positive change in
European consumer price index.
6-month euribor +0.20% thereafter. half-yearly 2 December 2014 2 December 2009
Eur 300,000,000 300,547 3-month euribor +0.55%.
From August 2009: 3-month
euribor +1.15%. quarterly 11 August 2014 from 11 August 2009
Eur 500,000,000 502,230 3-month euribor +0.45%.
From October 2011: 3-month
euribor +1.05%. quarterly 21 October 2016 from 21 October 2011
Eur 400,000,000 279,362 fixed rate 3% gross annually.
From second year: floating rate
equal to 75% of the annual 10-year
swap rate for euros. annual 30 June 2015 from 30 June 2010
Eur 300,000,000 294,943 To June 2010 3-month euribor +0.45%.
3-month euribor + 1.05% thereafter quarterly 23 June 2015 from 23 June 2010
Eur 170,000,000 130,833 fixed rate 4.00% gross annually.
From second year: floating rate
equal to 65% of the annual
10-year swap rate for euros annual 30 March 2016 from 30 March 2011
Eur 150,000,000 150,955 3-month euribor +0.45%.
From October 2011: 3-month
euribor +1.05%. quarterly 21 October 2016 from 21 October 2011
Eur 400,000,000 402,419 3-month euribor +0.30%.
From April 2011: 3-month
euribor +0.90%. quarterly 7 April 2016 from 7 April 2011
Eur 165,000,000 (2) 159,264 3% annual fixed annual 13 June 2007 none
Eur 177,000,000 (2) 174,160 3% annual fixed annual 30 June 2007 none
Eur 300,000,000 (2) 297,764 3-month euribor +0.23%. quarterly 30 May 2008 none
Total 3,392,265
(1) Loans reported in the original currency and issue amount.
(2) Tier 3 subordinated loan issued against market risk.
Subordinated loans can count towards supplementary regulatory capital up to a total of 2,761 million calculated on a statutory basis.
The subordination is ordinary in all cases. There are no provisions allowing the conversion of the loans into equity or other types of liabilities.

138 139
3.3 DEBT SECURITIES ISSUED: SECURITIES HEDGED SPECIFICALLY
Total 2006 Total 2005
1. Securities covered by specific fair value hedge 4,701,052 4,391,848
a) interest rate risk 4,589,993 4,391,848
b) exchange rate risk – –
c) multiple risks 111,059 –
2. Liabilities covered by specific cash flow hedges – –
a) interest rate risk – –
b) exchange rate risk – –
c) other – –
Section 4 – FINANCIAL LIABILITIES HELD FOR TRADING - ITEM 40
4.1 FINANCIAL LIABILITIES HELD FOR TRADING: COMPOSITION BY TYPE
Total 2006 Total 2005
Fair value
Fair value
NV Listed Unlisted FV* NV Listed Unlisted FV*
A. Non-derivative liabilities
1. Due to banks 799 1,078 – 1,078 – – – –
2. Due to customers 272,301 285,322 73 285,395 1,305,525 1,446,386 14,375 1,460,761
3. Debt securities – – – – – – – –
3.1 Bonds – – – – – –
3.1.1 structured – – – X – – – X
3.1.2 other bonds – – – X – – – X
3.2 Other securities – – – – – – – –
3.2.1 structured – – – X – – – X
3.2.2 other – – – X – – – X
Total A 273,100 286,400 73 286,473 1,305,525 1,446,386 14,375 1,460,761
B. Derivatives
1. Financial derivatives X 1,225 4,557,289 X X 1,089 3,373,676 X
1.1 trading X 1,225 3,256,759 X X 1,089 2,510,352 X
1.2 associated with fair value option X – – X X – – X
1.3 other X – 1,300,530 X X – 863,324 X
2. Credit derivatives X – 2,195 X X – 7,443 X
2.1 trading X – 2,195 X X – 7,443 X
2.2 associated with fair value option X – – X X – – X
2.3 other X – – X X – – X
Total B X 1,225 4,559,484 X X 1,089 3,381,119 X
Total (A+B) 273,100 287,625 4,559,557 286,473 1,305,525 1,447,475 3,395,494 1,460,761
FV* = Fair value calculated excluding changes in value due to changes in the creditworthiness of the issuer with respect to the issue date.

CAPITALIA
NOTES TO THE FINANCIAL STATEMENTS
4.2 BREAKDOWN OF ITEM 40 “FINANCIAL LIABILITIES HELD FOR TRADING”: SUBORDINATED LIABILITIES
No liabilities at 31 December 2006.
4.3 BREAKDOWN OF ITEM 40 “FINANCIAL LIABILITIES HELD FOR TRADING”: STRUCTURED LIABILITIES
No liabilities at 31 December 2006.
4.4 FINANCIAL LIABILITIES HELD FOR TRADING: DERIVATIVES
A Listed
Interest Foreign Equity Loans Other Total 2006 Total 2005
rates currencies securities
and gold
1) Financial derivatives 1,224 – 1 – – 1,225 1,089
a) with exchange
of principal 1,224 – 1 – – 1,225 1,089
– options sold – – – – – – –
– other derivatives 1,224 – 1 – – 1,225 1,089
b) without exchange
of principal – – – – – – –
– options sold – – – – – – –
– other derivatives – – – – – – –
2) Credit derivatives – – – – – – –
a) with exchange
of principal – – – – – – –
b) without exchange
of principal – – – – – – –
Total (A) 1,224 – 1 – – 1,225 1,089
B Unlisted
1) Financial derivatives 2,538,925 328,184 1,687,871 – 2,309 4,557,289 3,373,676
a) with exchange
of principal 793 327,435 1,349,522 – – 1,677,750 953,315
– options sold 791 19,573 1,347,561 – – 1,367,925 735,844
– other derivatives 2 307,862 1,961 – – 309,825 217,471
b) without exchange
of principal 2,538,132 749 338,349 – 2,309 2,879,539 2,420,361
– options sold 736,731 – 337,765 – – 1,074,496 709,985
– other derivatives 1,801,401 749 584 – 2,309 1,805,043 1,710,376
2) Credit derivatives – – – 2,195 – 2,195 7,443
a) with exchange
of principal – – – 2,195 – 2,195 7,443
b) without exchange
of principal – – – – – – –
Total (B) 2,538,925 328,184 1,687,871 2,195 2,309 4,559,484 3,381,119
Total (A+B) 2,540,149 328,184 1,687,872 2,195 2,309 4,560,709 3,382,208
4.5 FINANCIAL LIABILITIES HELD FOR TRADING (EXCLUDING TECHNICAL OVERDRAFTS): CHANGES FOR THE YEAR
No data at 31 December 2006.

140 141
Section 5 – FINANCIAL LIABILITIES MEASURED AT FAIR VALUE - ITEM 50
Item 50 “Financial liabilities measured at fair value” is not present in the financial statements for 2006 and 2005.
Section 6 – HEDGING DERIVATIVES - ITEM 60
6.1 HEDGING DERIVATIVES: COMPOSITION BY TYPE OF CONTRACT AND UNDERLYINGS
A Listed
Interest Foreign Equity Loans Other Total 2006
rates currencies securities
and gold
1) Financial derivatives – – – – – –
a) with exchange of principal – – – – – –
– options sold – – – – – –
– other derivatives – – – – – –
b) without exchange of principal – – – – – –
– options sold – – – – – –
– other derivatives – – – – – –
2) Credit derivatives – – – – – –
a) with exchange
of principal – – – – – –
b) without exchange
of principal – – – – – –
Total (A) – – – – – –
B Unlisted
1) Financial derivatives 121,203 16,938 – – – 138,141
a) with exchange
of principal – 16,938 – – – 16,938
– options sold – – – – – –
– other derivatives – 16,938 – – – 16,938
b) without exchange
of principal 121,203 – – – – 121,203
– options sold – – – – – –
– other derivatives 121,203 – – – – 121,203
2) Credit derivatives – – – – – –
a) with exchange
of principal – – – – – –
b) without exchange
of principal – – – – – –
Total (B) 121,203 16,938 – – – 138,141
Total (A+B) 121,203 16,938 – – – 138,141
Total (A+B) 2005 85,965 26 – – 1,184 87,175

CAPITALIA
NOTES TO THE FINANCIAL STATEMENTS
6.2 HEDGING DERIVATIVES: COMPOSITION BY HEDGED PORTFOLIO AND TYPE OF HEDGE
Fair value
Cash flow
Specific
Interest exchange credit price multiple
Generic Specific Generic
rate risk rate risk risk risk risks
1. Financial assets available for sale – – – – – X – X
2. Loans – – – X – X – X
3. Financial assets held to maturity X – – X – X – X
4. Portfolio X X X X X – X –
Total assets – – – – – – – –
1. Financial liabilities 87,149 26 – – – X – X
2. Portfolio X X X X X – X –
Total liabilities 87,149 26 – – – – – –
Section 7 – VALUE ADJUSTMENTS OF FINANCIAL LIABILITIES HEDGED GENERICALLY - ITEM 70
Item 70 “Value adjustments of financial liabilities hedged generically” is not present in the financial statements for
2006 and 2005.
Section 8 – TAX LIABILITIES – ITEM 80
See section 13 of assets.
Section 9 – LIABILITIES ASSOCIATED WITH GROUPS OF ASSETS BEING DIVESTED - ITEM 90
See section 14 of assets.

142 143
Section 10 – OTHER LIABILITIES – ITEM 100
10.1 OTHER LIABILITIES: COMPOSITION
Total 2006
Provision adjusting guarantees and commitments 270,780
Matured securities and coupons to be paid 24,782
Liabilities with Group companies for consolidated tax mechanism 42,060
Invoices and fees to be paid to suppliers and professionals 62,071
Tax collection services 12,812
Amounts due to employees 4,966
Amounts to credit to third parties 15,858
Accrued expenses and deferred income 579
Withholdings made as tax collection agent 5,312
Other 267,016
Total 706,236
Section 11 – STAFF SEVERANCE PAY - ITEM 110
11.1 STAFF SEVERANCE PAY: CHANGES FOR YEAR
Total 2006 Total 2005
A. Opening balance 29,446 26,071
B. Increases 6,753 11,173
B.1 Provision for the year 4,274 –
B.2 Other increases 2,479 11,173
C. Decreases 4,144 7,798
C.1 Severance payments 1,327 1,685
C.2. Other decreases 2,817 6,113
D. Closing balance 32,055 29,446
B.2 includes 799 in respect of demerger operations.
11.2 OTHER INFORMATION
None.

CAPITALIA
NOTES TO THE FINANCIAL STATEMENTS
Section 12 – PROVISIONS FOR LIABILITIES AND CONTINGENCIES - ITEM 120
12.1 PROVISIONS FOR LIABILITIES AND CONTINGENCIES: COMPOSITION
Total 2006 Total 2005
1. Ratirement and similar liabilies 91,767 90,899
2. Other provisions for liabilities and risks 269,658 220,728
2.1 litigation 186,786 168,605
2.2 charges for staff 14,536 10,549
2.3 other 68,336 41,574
Total 361,425 311,627
12.2 PROVISIONS FOR LIABILITIES AND CONTINGENCIES: CHANGES FOR YEAR
Provision Provision for Provision for Other Total 2006
for pension litigation staff costs
A. Opening balance 90,899 168,605 10,549 41,574 311,627
B. Increases 8,883 56,428 14,536 55,230 135,077
B.1 Provision for the year 4,048 51,505 14,536 54,840 124,929
B.2 Changes due to passage of time 4,159 3,951 – – 8,110
B.3 Changes due to changes
in discount rate – 213 – – 213
B.4 Other changes 676 759 – 390 1,825
C. Decreases 8,015 38,247 10,549 28,468 85,279
C.1 Use during the year 8,015 8,920 10,366 6,344 33,645
C.2 Changes due to changes
in discount rate – 1,783 – – 1,783
C.3 Other changes – 27,544 183 22,124 49,851
D. Closing balance 91,767 186,786 14,536 68,336 361,425
B.4 (“Other” column) includes 390 in respect of demerger operations.

144 145
12.3 COMPANY DEFINED-BENEFIT PENSION FUNDS
Description of funds
The pension fund for the head office employees of
the former Banco di S. Spirito, the former Banco di Roma
and the former Cassa di Risparmio di Roma is a definedbenefit
plan.
This category includes schemes where retired
employees receive a specified benefit. The financial and
demographic risk of not being able to pay the specified
level of benefit is borne by the employer.
Specifically, the scheme is a supplementary pension
fund that, on the basis of the number of years of service,
pays a specified benefit calculated as a percentage of
final compensation, supplementing the difference
between that amount and the benefit paid by the
relevant compulsory pension system (in some cases, it
also takes account of any complementary pension
benefits).
2. Change for the year Total 2006
1. Liability at the start of the year 90,899
2. Other increases 3,698
3. Service cost 350
4. Interest cost 4,159
5. (Uses) (8,015)
6. Transferred/settled 676
7. Liability at the end of the year(*) 91,767
8. Past service liability at the end of the year 99,340
9. Actuarial gain/loss 7,573
(*) Where actuarial (gains)/losses have been recognized using the corridor method.
3. Change during the year in plan assets
and other information
There are no plan assets as the funds are fully invested
in the assets of the Bank and therefore constitute a
liability of the Bank itself.
4. Reconciliation of present value of funds, present value of
plan assets and recognized assets and liabilities
The actuarial appraisal is €7.6 million lower than the
value of the fund because, as discussed in Part A of the
notes to the financial statements, actuarial gains and
losses are taken to the income statement using the
corridor method.
5. Description of main actuarial assumptions
The demographic assumptions, updated with respect
to 2005, are as follows:
for the probability of mortality for staff in service,
those reported in demographic table 48 of the State
Accountant General, broken down by gender;
for the probability of full and permanent disability,
those adopted in the INPS model for projections to
2010, broken down by gender. These rates were
constructed on the basis of the distribution by age and
gender of pensions outstanding at 1 January 1987
starting in 1984, 1985, 1986 for employees in the credit
industry;

CAPITALIA
NOTES TO THE FINANCIAL STATEMENTS
for the probability of mortality of staff retired for full
and permanent disability, those adopted in the INPS
model for projections to 2010, broken down by
gender;
6. Comparative information
Charges recognized in 2006 amounted to €8.2
million, compared with €4.5 million in 2005.
for the probability of leaving survivors, those
published in the accounts of the social security
institutions, broken down by gender;
for the probability of widows and widowers
remarrying, those deduced from Istat’s 1960/62 marriage
tables;
for the probability of mortality for retired staff on
seniority or old age pensions, those reported in
demographic table 48 of the State Accountant General,
broken down by gender.
The following financial assumptions were used
(unchanged on 2005):
Annual discount rate: 4.50%
Annual rate of increase in compensation: 3.00%
12.4 PROVISIONS FOR LIABILITIES AND CONTINGEN-
CIES – OTHER PROVISIONS
Provisions for pending litigation are recognized on
the basis of the following conditions:
an enterprise has a present obligation (legal or
constructive) as a result of a past event;
it is probable that settlement of the obligation will
require an outflow of resources embodying economic
benefits;
a reliable estimate can be made of the amount of the
obligation.
Positions for which payment of the obligation is
expected to occur at more than 18 months are
discounted and have an average residual maturity of
about 16 months.
Annual inflation rate: 2.00%
Following the 1998 and 1999 Finance Acts, the fund
and INPS pensions were increased on the basis of an
annual average rate that better approximates the
automatic equalization mechanism used for pension
increases by the relevant compulsory pension plan. The
average annual rate of increase of fund benefits was
assumed to be 1.75%.
Further information on the most significant potential
liabilities is provided in the section “Impaired loans and
contingent liabilities” in the report on operations.
Section 13 – REDEEMABLE SHARES - ITEM 140
Item 140 “Redeemable shares” is not present in the
financial statements for 2006 and 2005.

146 147
Section 14 – SHAREHOLDERS’ EQUITY - ITEMS 130, 150, 160, 170, 180, 190 AND 200
14.1 SHAREHOLDERS’ EQUITY: COMPOSITION
Total 2006 Total 2005
1. Share capital 2,595,439 2,511,134
2. Share premium account 3,382,774 3,828,187
3. Reserves 1,203,970 369,431
4. (Treasury stock) – (865)
5. Revaluation reserves 54,109 612,786
6. Capital instruments – –
7. Profit for the year 1,446,665 596,465
Total 8,682,957 7,917,138
14.2 “SHARE CAPITAL” AND “TREASURY STOCK”: COMPOSITION
At 31 December 2006 the share capital of Capitalia S.p.A, fully subscribed and paid up, amounted to €2,595,439,085,
represented by the same number of ordinary shares with a par value of €1.00 each.
At 31 December 2006 Capitalia S.p.A. did not hold treasury shares.

CAPITALIA
NOTES TO THE FINANCIAL STATEMENTS
14.3 SHARE CAPITAL - NUMBER OF SHARES: CHANGE FOR THE YEAR (units)
Ordinary
Other
A. Shares at start of year 2,511,134,376 –
– fully paid up 2,511,134,376 –
– not fully paid up – –
A.1 Treasury stock (–) (200,000) –
A2. Shares in circulation: opening balance 2,510,934,376 –
B. Increases 154,216,017 –
B.1 New issues 84,304,709 –
– for payment: 84,304,709 –
– business combinations – –
– conversion of bonds – –
– exercise of warrants 9,042,750 –
– other 75,261,959 (*) –
– bonus issues – –
– for employees – –
– for directors – –
– other – –
B.2 Sale of treasury stock 69,911,308 –
B.3 Other changes – –
C. Decreases 69,711,308 –
C.1 Cancellation – –
C.2 Purchase of own shares 69,711,308 –
C.3 Disposal of companies – –
C.4 Other changes – –
D. Shares in circulation: closing balance 2,595,439,085 –
D.1 Treasury stock (+) – –
D.2 Shares at end of the year 2,595,439,085 –
– fully paid up 2,595,439,085 –
– not fully paid up – –
(*) Regards non-proportionate demerger of MCC S.p.A..
14.4 SHARE CAPITAL: OTHER INFORMATION
There is no other material information concerning share capital.

148 149
14.5 INCOME RESERVES: OTHER INFORMATION
Total 2006 Total 2005
Income reserves: 326,045 247,393
Legal reserve 514,319 484,495
Retained earnings from prior years 3,788 6,371
Restatement reserve - pension plan – (5,583)
Reserve for commitment to purchase treasury stock (235,214) (237,890)
Fondo riserva straordinaria 39,367 –
Riserva per componenti economiche da derivati su propri strumenti patrimoniali 3,785 –
Other: 877,925 122,038
Reserve for purchase of treasury stock 390,000 90,402
Reserve pursuant to Law 266/2005 465,273 20,781
Reserve for stock options 22,616 10,855
Reserve pursuant to Law 124/93 36 –
Total 1,203,970 369,431
Income reserves are usable and distributable in accordance with the provisions of the Civil Code and, where
applicable, tax regulations.
14.6 CAPITAL INSTRUMENTS: COMPOSITION AND CHANGE FOR THE YEAR
Item not present in the financial statements for 2005 and 2006
14.7 REVALUATION RESERVES: COMPOSITION
Total 2006 Total 2005
1. Financial assets available for sale 51,319 612,786
2. Property, plant and equipment – –
3. Intangible assets – –
4. Hedging of foreign investments – –
5. Cash flow hedges – –
6. Exchange rate differences – –
7. Non-current assets being divested – –
8. Special revaluation laws 2,790 –
Total 54,109 612,786

CAPITALIA
NOTES TO THE FINANCIAL STATEMENTS
14.8 REVALUATION RESERVES: CHANGE FOR THE YEAR
Financial Tangible Intangible Hedging Cash flow Exchange Non-current Special
assets assets assets of foreign hedges rate assets being revaluation
available investments differences divested laws and
for sale
application of
deemed cost
A. Opening balance 612,787 – – – – – – –
B. Increases 315,862 – – – – – – 2,790
B.1 Increases in
fair value 203,732 – – – – – – X
B2. Other changes 112,130 – – – – – – 2,790
C. Decreases 877,330 – – – – – – –
C.1 Decreases in
fair value 133,040 – – – – – – X
C2. Other changes 744,290 – – – – – – –
D. Closing balance 51,319 – – – – – – 2,790
B.2 of financial assets available for sale includes 5,945 in respect of demerger operations; C.2 includes 2,640 in respect of demerger operations.
14.9 REVALUATION RESERVES FOR FINANCIAL ASSETS AVAILABLE FOR SALE: COMPOSITION
Total 2006 Total 2005
Positive Negative Positive Negative
reserve reserve reserve reserve
1. Debt securities 3,988 121,072 (2) 35,655 63,554
2. Equity securities 167,630 (1) 832 673,421 33,601
3. Units in collective
investment undertakings 2,367 762 1,386 521
4. Loans – – – –
Total 173,985 122,666 710,462 97,676
(1) Of which €48 million regarding Fiat S.p.A., €46 million Parmalat S.p.A. and €29 million Borsa Italiana S.p.A.; the figures for 2005 included €492 million in respect
of Mediobanca, which was sold in June 2006 to Capitalia Partecipazioni S.p.A. and €126 million in respect of the shares in Assicurazioni Generali sold in
the market in June 2006.
(2) Of which €119.1 million in respect of Trevi securities held in portfolio.

150 151
14.10 REVALUATION RESERVES FOR FINANCIAL ASSETS AVAILABLE FOR SALE: CHANGE FOR THE YEAR
Debt Equity Units in collective Loans
securities securities investment
undertakings
1. Opening balance (27,899) 639,820 865 –
2. Positive changes 47,055 262,012 6,797 –
2.1 Increases in fair value 2,987 200,262 484 –
2.2 Reversal to income statement
of negative reserves – 17,672 2,960 –
– for impairment – – – –
– for realization – 17,672 2,960 –
2.3 Other changes 44,068 44,078 3,353 –
3. Negative changes 136,240 735,034 6,057 –
3.1 Decreases in fair value 132,231 72 738 –
3.2 Reversal to income statement
of positive reserves: for realization 226 669,435 1,653 –
3.3 Other changes 3,783 65,527 3,666 –
4. Closing balance (117,084) 166,798 1,605 –
2.3 “equity securities”: 5,945 in respect of demerger operations.
3.3 “debt securities”: 1,801 in respect of demerger operations.
3.3 “units in CIUs”: 839 in respect of demerger operations.
Tax information
At first-time adoption, Capitalia (as well as Fineco,
merged into the Parent Company with accounting and
tax effects from 1 January 2005), among other things,
restated the value of land and buildings, adopting the
deemed cost option from among those envisaged by
IAS 16 and IFRS 1. This involved the recognition of
positive and negative changes in the previous cost value,
giving rise to an overall gain for this class of assets, which
was taken to equity net of the related deferred taxation.
Following the enactment of the 2006 Finance Law
(Law 266 of 23 December 2005), the Bank decided to
elect the option envisaged to recognize the increased
values of land and buildings present in the balance sheet
at 31 December 2005 for tax purposes and discharge the
tax liability with payment of a special capital gains tax.
In the light of the foregoing and in compliance with
the provisions of Law 342/2000, referred to in Law
266/2005, the amount of €20.78 million, equal to the
difference between deferred tax liabilities calculated for
the purposes of FTA on the higher values of buildings
and land and the special capital gains tax referred to in
those laws, was allocated to a specific “Law 266/2005
reserve” by reclassifying a corresponding amount from
the share premium account.
On 1 January 2006 the partial demergers of the real
estate holdings of Banca di Roma, Banco di Sicilia and
Bipop Carire, as well as a property of Capitalia Leasing &
Factoring (now MCC) took effect.
Like Capitalia, the other companies involved in the
transfers elected the option envisaged in Law 266/2005,
choosing to recognize the increased values of land and

CAPITALIA
NOTES TO THE FINANCIAL STATEMENTS
buildings for tax purposes at first time adoption by
paying the capital gains tax. In electing the option, the
companies recognized at 31 December 2005 the tax
restriction on those assets, equal to the increased value
of the land and buildings net of the capital gains tax
pursuant to Law 266/2005.
As a position specifically connected, pursuant to
Article 173 of the Uniform Tax Code, with the demerged
assets, with effect from 1 January 2006 the tax restriction
was transferred to the beneficiary of the demerger,
Capitalia, which adjusted the amount of the Law
266/2005 reserve, taking account of the instructions
issued in the meantime by the Revenue Agency
concerning the calculation of the capital gains tax.
In view of the foregoing, the Law 266/2005 reserve
was increased by €444.49 million by reclassifying a
corresponding amount from the share premium account.
Accordingly, at 31 December 2006 the Law 266/2005
reserve had a balance of €465.27 million; no deferred tax
liabilities were recognized as distribution to shareholders
is not envisaged. In addition, as a result of the
demergers, pursuant to Article 173 of the Uniform Tax
Code, Capitalia increased, in proportion to the quota of
shareholders’ equity acquired, the following taxsuspended
reserves by was of reclassifying the share
premium account:
Reserve under Leg. Decree 124 of 21 April 1993
€ 35,555.14
Reserve under Law 576 of 2 December 1975
€ 40,873.44
Reserve under Law 72 of 19 March 1983
€ 1,299,186.44
Reserve under Law 408 of 29 December 1990
€ 852,491.16
Reserve under Law 413 of 30 December 1991
€ 597,137.54
Once again no deferred tax liabilities were recognized
for these reserves as distribution to shareholders is not
envisaged.
Finally, no deferred tax liabilities were recognized in
respect of other tax-suspended reserves allocated over
time in the amount of €39,684,040 to share capital and
€22,580,466 to the share premium account as
distribution to shareholders is not envisaged.

152 153
OTHER INFORMATION
1. GUARANTEES ISSUED AND COMMITMENTS
Total 2006 Total 2005
1) Financial guarantees issued 3,258,091 2,777,105
a) Banks 2,947,180 2,543,680
b) Customers 310,911 233,425
2) Commercial guarantees issued 142,466 153,698
a) Banks – –
b) Customers 142,466 153,698
3) Irrevocable commitments to disburse funds 3,166,342 3,253,099
a) Banks 2,049,919 1,740,343
– certain utilization 1,656,985 1,740,343
– uncertain utilization 392,934 –
b) Customers 1,116,423 1,512,756
– certain utilization 447,643 703,148
– uncertain utilization 668,780 809,608
4) Commitments underlying credit derivatives: sales of protection 274,483 727,671
5) Assets pledged as collateral for third-party debts 104 104
6) Other commitments 5,811,986 3,775,873
Total 12,653,472 10,687,550
2. ASSETS PLEDGED AS COLLATERAL FOR OWN DEBTS AND COMMITMENTS
Portfolios Total 2006 Total 2005
1. Financial assets held for trading (*) 1,126,396 4,699,872
2. Financial assets designated at fair value – –
3. Available-for-sale financial assets (*) 1,006,551 463,029
4. Held-to-maturity financial assets (*) 446,674 236,498
5. Loans to banks (**) 538,851 637,811
6. Loans to customers (***) 75,605 73,571
7. Tangible assets – –
(*) Securities backing repurchase operations.
(**) The amount is made of 19,539 (securities in guarantee of repurchase agreements) and 519,312 of monetary deposits given by Capitalia to secure derivative
transactions with counterparties with which the Bank was authorized by the supervisory authorities to enter into bilateral netting arrangements (circ. 155; 3.3.18).
(***) The amount represents the security deposit paid by Capitalia to MCC in respect of the Bank surety issued in favor of the Ministry for the Economy to secure
payment in ten annual installments of the “contributions” due for the asignment of the right to use the frequencies awarded to IPSE 2000.
3. INFORMATION ON OPERATING LEASES
Breakdown not present at 31 December 2006.

CAPITALIA
NOTES TO THE FINANCIAL STATEMENTS
4. MANAGEMENT AND INTERMEDIATION SERVICES
Total 2006
1. Trading in financial instruments on behalf of third parties
a) Purchases 2,034,186
1. settled 2,030,386
2. not yet settled 3,800
b) Sales 1,981,964
1. settled 1,978,085
2. not yet settled 3,879
2. Asset management
a) individual –
b) collective –
3. Custody and administration of securities
a) third–party securities held as part of depository bank services (excluding asset management) –
1. securities issued by reporting entity –
2. other –
b) other third-party securities on deposit (excluding asset management): other 91,240,069
1. securities issued by reporting entity 15,175,907
2. other 76,064,162
c) third-party securities deposited with third parties 86,710,169
d) securities owned by bank deposited with third parties 11,698,441
4. Other –

154 155
PART C – INFORMATION
ON THE INCOME STATEMENT
Section 1 – INTEREST - ITEMS 10 AND 20
1.1 INTEREST INCOME AND SIMILAR REVENUES: COMPOSITION
Performing financial assets
Debt Loans Impaired Other Total Total
securities financial assets 2006 2005
assets
1. Financial assets held for trading 49,550 – – – 49,550 184,613
2. Financial assets available for sale 44,388 – – – 44,388 43,083
3. Financial assets held to maturity 28,326 – – – 28,326 30,883
4. Loans to banks 5,129 1,055,050 – – 1,060,179 811,557
5. Loans to customers 84 62,247 29,212 – 91,543 126,771
6. Financial assets designated
at fair value – – – – – –
7. Hedging derivatives X X X 127,370 127,370 7,725
8. Financial assets assigned
but not derecognized 81,411 – – – 81,411 127,929
9. Other assets X X X 20,112 20,112 22,415
Total 208,888 1,117,297 29,212 147,482 1,502,879 1,354,976

CAPITALIA
NOTES TO THE FINANCIAL STATEMENTS
1.2 INTEREST INCOME AND SIMILAR REVENUES: DIFFERENCES ON HEDGING TRANSACTIONS
Total 2006
A. Positive differences on:
A.1 Specific fair value hedges of assets –
A.2 Specific fair value hedges of liabilities 127,370
A.3 Generic hedges of interest rate risk –
A.4 Specific cash flow hedges of assets –
A.5 Specific cash flow hedges of liabilities –
A.6 Generic cash flow hedges –
Total positive differences (A) 127,370
B. Negatives differences on:
B.1 Specific fair value hedges of assets –
B.2 Specific fair value hedges of liabilities –
B.3 Generic hedges of interest rate risk –
B.4 Specific cash flow hedges of assets –
B.5 Specific cash flow hedges of liabilities –
B.6 Generic cash flow hedges –
Total negative differences (B) –
C. Balance (A –B) 127,370
1.3 INTEREST INCOME AND SIMILAR REVENUES: OTHER INFORMATION
Total 2006 Total 2005
1.3.1 Interest income on foreign-currency financial assets 126,881 128,795
1.3.2 Interest income on finance leases – –
1.3.3 Interest income on loans financed with third-party funds under administration – –

156 157
1.4. INTEREST EXPENSE AND SIMILAR CHARGES: COMPOSITION
Debt Securities Other Total 2006 Total 2005
liabilities
1. Due to banks (822,887) X – (822,887) (699,714)
2. Due to customers (38,459) X – (38,459) (50,218)
3. Securities in issue X (913,982) – (913,982) (810,501)
4. Financial liabilities held for trading – (25,679) – (25,679) (117,908)
5. Financial liabilities at fair value – – – – –
6. Financial liabilities in respect
of assets assigned but not derecognized (74,542) – – (74,542) (118,499)
7. Other liabilities X X – – –
8. Hedging derivatives X X – – –
Total (935,888) (939,661) – (1,875,549) (1,796,840)
1.5 INTEREST EXPENSE AND SIMILAR CHARGES: DIFFERENCES ON HEDIGING TRANSACTIONS
See table 1.2.
1.6 INTEREST EXPENSE AND SIMILAR CHARGES: OTHER INFORMATION
Total 2006 Total 2005
1.6.1 Interest expense on foreign-currency financial liabilities (177,508) (180,690)
1.6.2 Interest expense on liabilities in respect of finance leases – –
1.6.3 Interest expense on third-party funds under administration – –

CAPITALIA
NOTES TO THE FINANCIAL STATEMENTS
Section 2 - COMMISSIONS - ITEMS 40 AND 50
2.1 COMMISSION INCOME: COMPOSITION
Total 2006 Total 2005
a) guarantees issued 649 2,187
b) credit derivatives – –
c) management, intermediation and advisory services: 38,511 17,924
1) trading in financial instruments 2,413 87
2) foreign exchange 221 296
3) asset management – –
3.1 individual – –
3.2 collective – –
4) securities custody and administration – –
5) depository services – –
6) securities placement 30,163 17,541
7) order collection – –
8) advisory services 5,714 –
9) distribution of third-party services – –
9.1 asset management – –
9.1.1 individual – –
9.1.2 collective – –
9.2 insurance products – –
9.3 other – –
d) collection and payment services 6,388 6,889
e) servicing activities for securitizations 19,172 17,421
f) services for factoring transactions – –
g) tax collection services – –
h) other services 24,466 57,593
of which:
– receivables collection 5,749 36,247
– credit cards 11,904 16,600
Total 89,186 102,014

158 159
2.2 COMMISSION INCOME: DISTRIBUTION CHANNELS FOR PRODUCTS AND SERVICES
Total 2006 Total 2005
a) own branches 30,163 17,541
1) asset management – –
2) securities placement 30,163 17,541
3) third-party services and products – –
b) off-premises distribution – –
1) asset management – –
2) securities placement
3) third-party services and products – –
c) other distribution channels – –
1) asset management – –
2) securities placement – –
3) third-party services and products – –
2.3 COMMISSION EXPENSE: COMPOSITION
Total 2006 Total 2005
a) guarantees received (867) (928)
b) credit derivatives – –
c) management and intermediation services: (29,668) (8,096)
1) trading in financial instruments (3,190) (1,254)
2) foreign exchange – –
3) asset management – –
3.1 own portfolio – –
3.2 third-party portfolio – –
4) securities custody and administration (7,099) (6,152)
5) placement of financial instruments (19,379) (690)
6) off-premises distribution of securities, products and services – –
d) collection and payment services (340) (225)
e) other services (72,940) (80,321)
of which:
– receivables collection (52,009) (59,670)
– credit cards (5,577) (7,416)
Total (103,815) (89,570)

CAPITALIA
NOTES TO THE FINANCIAL STATEMENTS
Section 3 – DIVIDENDS AND SIMILAR INCOME - ITEM 70
3.1 DIVIDENDS AND SIMILAR INCOME: COMPOSITION
Total 2006 Total 2005
Dividends Income from Dividends Income from
units in collective
units in collective
investment
investment
undertakings
undertakings
A. Financial assets held for trading 24,308 198 19,930 102
B. Financial assets available-for-sale 22,710 1,310 60,427 1,883
C. Financial assets designated at fair value 341 – 55 –
D. Equity investments 1,103,529 X 906,944 X
Total 1,150,888 1,508 987,356 1,985
Section 4 – NET GAIN (LOSS) ON TRADING ACTIVITIES - ITEM 80
4.1 NET GAIN (LOSS) ON TRADING ACTIVITIES: COMPOSITION
Capital Trading Capital Trading Net gain (loss)
gains (A) profits (B) losses (C) losses (D) (a+b-c-d)
1. Financial assets held for trading 79,952 123,062 (22,238) (142,957) 37,819
1.1 Debt securities 6,246 55,243 (7,149) (64,673) (10,333)
1.2 Equity securities 61,176 58,740 (14,389) (74,799) 30,728
1.3 Units in collective
investment undertakings 12,530 9,079 (700) (3,485) 17,424
1.4 Loans – – – – –
1.5 Other – – – – –
2. Financial liabilities held for trading – – – – –
2.1 Debt securities – – – – –
2.2 Other – – – – –
3. Other financial assets and liabilities:
exchange rate differences X X X X (6,196)
4. Derivatives
4.1 Financial derivatives
– on debt securities
and interest rates 2,869,069 3,542,625 (2,190,884) (4,180,164) 40,646
– on equity securities
and equity indices 1,404,418 3,336,311 (1,346,993) (3,400,600) (6,864)
– on foreign currencies and gold X X X X 19,589
– other – – – – –
4.2 Credit derivatives 838 26,872 (1,913) (29,643) (3,846)
Total 4,354,277 7,028,870 (3,562,028) (7,753,364) 81,148

160 161
Section 5 – NET GAIN (LOSS) ON HEDGING ACTIVITIES – ITEM 90
5.1 NET GAIN (LOSS) ON HEDGING ACTIVITIES: COMPOSITION
Total 2006 Total 2005
A. Income on:
A.1 Fair value hedges 9,025 13,058
A.2 Hedged financial assets (fair value) 17,089 16,626
A.3 Hedged financial liabilities (fair value) 212,191 102,950
A.4 Cash flow hedges – –
A.5 Assets and liabilities in foreign currencies – –
Total income on hedging activities (A) 238,305 132,634
B. Expense on:
B.1 Fair value hedges (244,030) (132,634)
B.2 Hedged financial assets (fair value) – –
B.3 Hedged financial liabilities (fair value) (11,080) (12,891)
B.4 Cash flow hedges – –
B.5 Assets and liabilities in foreign currencies – –
Total expense on hedging activities (B) (255,110) (145,525)
C. Net gain (loss) on hedging activities (A-B) (16,805) (12,891)

CAPITALIA
NOTES TO THE FINANCIAL STATEMENTS
Section 6 – GAINS (LOSSES) ON DISPOSAL OR REPURCHASE - ITEM 100
6.1 GAINS (LOSSES) ON DISPOSAL OR REPURCHASE: COMPOSITION
Total 2006 Total 2005
Gains Losses Net gain (loss) Gains Losses Net gain (loss)
Financial assets
1. Loans to banks – – – – – –
2. Loans to customers – – – 1 (39) (38)
3. Financial assets
available for sale 759,911 (35,667) 724,244 36,616 (465) 36,151
3.1 Debt securities 226 – 226 – – –
3.2 Equity securities 757,583 (31,232) 726,351 36,616 (465) 36,151
3.3 Units in collective
investment
undertakings 2,102 (4,435) (2,333) – – –
3.4 Loans – – – – – –
4. Financial assets
held to maturity 97 (13) 84 73 – 73
Total assets 760,008 (35,680) 724,328 36,690 (504) 36,186
Financial liabilities
1. Due to banks – – – – – –
2. Due to customers – – – – – –
3. Securities in issue 16,741 (9,627) 7,114 12,769 (57,929) (45,160)
Total liabilities 16,741 (9,627) 7,114 12,769 (57,929) (45,160)
Balance 731,442 (8,974)

162 163
Section 7 – NET ADJUSTMENTS OF FINANCIAL ASSETS AND LIABILITIES AT FAIR VALUE - ITEM 110
7.1 NET ADJUSTMENTS OF FINANCIAL ASSETS/LIABILITIES AT FAIR VALUE: COMPOSITION
Capital Gain on Capital Loss on Net adjustments
gains (A) realization (B) losses (C) realization (D) [(A+B)–(C+D)]
1. Financial assets 3,234 5 (1,684) – 1,555
1.1 Debt securities – – – – –
1.2 Equity securities 3,234 5 (1,684) – 1,555
1.3 Units in collective
investment undertakings – – – – –
1.4 Loans – – – – –
2. Financial liabilities – – – – –
2.1 Securities in issue – – – – –
2.2 Due to banks – – – – –
2.3 Due to customers – – – – –
3. Financial assets and liabilities
in foreign currency: exchange
rate differences X X X X –
4. Derivatives
4.1 Financial derivatives
– on debt securities
and interest rates – – – – –
– on equity securities
and equity indices – – – – –
– on foreign currencies
and gold X X X X –
– other – – – – –
4.2 Credit derivatives – – – – –
Total derivatives – – – – –
Total 3,234 5 (1,684) – 1,555

CAPITALIA
NOTES TO THE FINANCIAL STATEMENTS
Section 8 – NET IMPAIRMENT ADJUSTMENTS - ITEM 130
8.1 NET IMPAIRMENT ADJUSTMENTS OF LOANS: COMPOSITION
Writedowns Writebacks Total Total
Specific Portfolio
Specific Portfolio 2006 2005
Writeoffs Other
from interest other from interest other
writebacks
writebacks
A. Loans to banks – – – – – – – – –
B. Loans to customers (47,609) (190,847) – 107,810 162,399 – – 31,753 48,220
C. Total (47,609) (190,847) – 107,810 162,399 – – 31,753 48,220
8.2 NET IMPAIRMENT ADJUSTMENTS OF AVAILABLE–FOR–SALE FINANCIAL ASSETS: COMPOSITION
Writedowns Writebacks Total Total
Specific Specific 2006 2005
Writeoffs Other from interest other
writebacks
A. Debt securities – (51,959) – 46,250 (5,709) 3,231
B. Equity securities – (4,520) X X (4,520) (36,690)
C. Units in collective investment undertakings – – X – – –
D. Loans to banks – – – – – –
E. Loans to customers – – – – – –
F. Total – (56,479) – 46,250 (10,229) (33,459)

164 165
8.3 NET IMPAIRMENT ADJUSTMENTS OF HELD–TO–MATURITY FINANCIAL ASSETS: COMPOSITION
Writedowns Writebacks Total Total
Specific Portfolio
Specific Portfolio 2006 2005
Writeoffs Other
from interest other from interest other
writebacks
writebacks
A. Debt securities – – – – – – 1,511 1,511 (36)
B. Loans to banks – – – – – – – – –
C. Loans to customers – – – – – – – – –
D. Total – – – – – – 1,511 1,511 (36)
8.4 NET IMPAIRMENT ADJUSTMENTS OF OTHER FINANCIAL TRANSACTIONS: COMPOSITION
Writedowns Writebacks Total Total
Specific Portfolio
Specific Portfolio 2006 2005
Writeoffs Other
from interest other from interest other
writebacks
writebacks
A. Guarantees issued – (47,446) 487 1,390 – – (45,569) (41,841)
B. Credit derivatives – – – – – – – – –
C. Commitments
to disburse funds – – – – – – – – –
D. Other transactions – – – – – – – – –
E. Total – (47,446) – 487 1,390 – – (45,569) (41,841)

CAPITALIA
NOTES TO THE FINANCIAL STATEMENTS
Section 9 – GENERAL AND ADMINISTRATIVE EXPENSES - ITEM 150
9.1 STAFF EXPENSES: COMPOSITION
Total 2006 Total 2005
1. Employees (142,178) (108,106)
a) wages and salaries (93,083) (71,765)
b) social security contributions (25,873) (22,078)
c) severance pay (2,141) (2,115)
d) pensions – –
e) allocation to staff severance pay provision (4,273) –
f) allocation to provision for pensions and similar liabilities (8,207) (4,509)
– defined contribution – –
– defined benefit (8,207) (4,509)
g) payments to external complementary pension funds (3,809) (3,136)
– defined contribution (1,407) –
– defined benefit (2,402) (3,136)
h) costs in respect of agreements to make payments in own equity instruments (4,895) (4,905)
i) other employee benefits (5,773) (5,107)
l) recovery of expenses for seconded employees 5,876 5,509
2. Other personnel (7,793) (9,776)
3. Board of Directors (6,438) (8,181)
Total (156,409) (126,063)

166 167
9.2 AVERAGE NUMBER OF EMPLOYEES BY CATEGORY
Total 2006
Employees 1,215
a) Senior management 139
b) Total junior management 640
– of which 3rd and 4th level 384
c) Other employees 436
Other personnel 50
Total 1,265
9.3 COMPANY DEFINED BENEFIT PENSION FUNDS: TOTAL COSTS
Total 2006
Service cost (4,048)
Interest cost (4,159)
Total (8,207)
9.4 OTHER EMPLOYEE BENEFITS
Total 2006
1) Lunch vouchers (1,139)
2) Insurance policies (943)
3) Training (589)
4) Fee expense for employee benefits (2,456)
5) Other including seniority bonus (646)
Total (5,773)

CAPITALIA
NOTES TO THE FINANCIAL STATEMENTS
9.5 OTHER ADMINISTRATIVE EXPENSES: COMPOSITION
Total 2006 Total 2005
Rental of buildings (9,321) (11,254)
Ordinary maintenance (628) (888)
Extraordinary maintenance (126) (813)
Other building expenses (149) (614)
Postal expenses (53) (75)
Telephone service (1,061) (1,037)
Electricity, heating and water (931) (366)
Leasing of machinery and software (193) (5,373)
Hardware and software maintenance (3) (77)
Outsourcing of data processing (61,012) (53,745)
IT consulting – (580)
Data transmission and charges for electronic machinery (100) (149)
Back office costs (197) (193)
Advertising (28,990) (29,357)
Marketing, development and entertainment (2,170) (2,216)
Legal expenses for debt collection (55,362) (56,846)
Other professional consulting services (16,775) (19,731)
Subscriptions (491) (581)
Transportation (2,888) (3,166)
Collection of information and preliminary enquiries (9,300) (8,678)
Insurance (1,443) (1,165)
Security (2,006) (1,291)
Cleaning services (599) (479)
Use of automobiles (210) (157)
Office supplies and printing (640) (710)
Corporate bodies (394) (638)
Sundry grants and donations (1,888) (2,306)
Medical expenses and gifts – (49)
Indirect taxes and duties (6,836) (2,260)
Stock options – Group companies (6,866) (4,951)
Other expenses (4,868) (8,109)
Total (215,500) (217,854)

168 169
Section 10 – PROVISIONS FOR LIABILITIES AND CONTINGENCIES (NET) - ITEM 160
10.1 PROVISIONS FOR LIABILITIES AND CONTINGENCIES (NET): COMPOSITION
Total 2006 Total 2005
Pending litigation (27,100) (9,924)
Covering of losses at subsidiaries (1,200) (1,150)
Other expenses (24,516) (23,400)
Total (52,816) (34,474)
Section 11 – NET ADJUSTMENTS OF TANGIBLE ASSETS - ITEM 170
11.1 NET ADJUSTMENTS OF TANGIBLE ASSETS: COMPOSITION
Depreciation (a) Writedowns Writebacks Net adjustments
for impairment (b) (c) (a+b–c)
A. Tangible assets
A.1 owned (29,436) – – (29,436)
– used in operations (3,595) – – (3,595)
– investment (25,841) – – (25,841)
A.2 acquired under finance leases – – – –
– used in operations – – – –
– investment – – – –
Total (29,436) – – (29,436)
Section 12 – NET ADJUSTMENTS OF INTANGIBLE ASSETS – ITEM 180
12.1 NET ADJUSTMENTS OF INTANGIBLE ASSETS: COMPOSITION
Amortization (a) Writedowns Writebacks Net adjustments
for impairment (b) (c ) (a+b–c)
A. Intangible assets
A.1 Owned (4,002) – – (4,002)
– developed in–house – – – –
– other (4,002) – – (4,002)
A.2 Acquired under finance leases – – – –
Total (4,002) – – (4,002)

CAPITALIA
NOTES TO THE FINANCIAL STATEMENTS
Section 13 – OTHER OPERATING INCOME (EXPENSES) - ITEM 190
13.1 OTHER OPERATING EXPENSES: COMPOSITION
Total 2006 Total 2005
Depreciation of third-party assets (934) (564)
Reimbursements and sundry repayments (54) (137)
Litigation (4,164) (5,157)
Other (2,712) (9,124)
Total (7,864) (14,982)
13.2 OTHER OPERATING INCOME: COMPOSITION
Total 2006 Total 2005
Rental income 2,947 4,668
impaired loans 53,000 42,467
Other 122,005 32,338
Total 177,952 79,473
Balance 170,088 64,491
Section 14 – INCOME (LOSS) ON EQUITY INVESTMENTS - ITEM 210
14.1 INCOME (LOSS) ON EQUITY INVESTMENTS: COMPOSITION
Total 2006 Total 2005
A. Income 66,865 328
1. Revaluations – –
2. Gains on disposals 66,865 328
3. Writebacks – –
4. Other positive changes – –
B. Charges (42,819) (32,332)
1. Writedowns – –
2. Writedowns for impairment (42,704) (27,993)
3. Losses on disposals (115) (4,339)
4. Other negative changes – –
Net gain (loss) 24,046 (32,004)

170 171
Section 15 – NET ADJUSTMENT TO FAIR VALUE OF TANGIBLE AND INTANGIBLE ASSETS - ITEM 220
Item 220 “Net adjustment to fair value of tangible and intangible assets” is not present in the financial statements for
2006 and 2005.
Section 16 – WRITEDOWNS OF GOODWILL - ITEM 230
Item 230 “Writedowns of goodwill” is not present in the financial statements for 2006 and 2005.
Section 17 – GAINS (LOSSES) ON DISPOSAL OF INVESTMENTS - ITEM 240
17.1 GAINS (LOSSES) ON DISPOSAL OF INVESTMENTS: COMPOSITION
Total 2006 Total 2005
A. Land and buildings 246 (454)
– Gains on disposal 256 –
– Losses on disposal (10) (454)
B. Other assets – 3,418
– Gains on disposal – 3,463
– Losses on disposal – (45)
Net gain (loss) 246 2.964

CAPITALIA
NOTES TO THE FINANCIAL STATEMENTS
Section 18 – INCOME TAX FOR THE YEAR ON CONTINUING OPERATIONS - ITEM 260
18.1 INCOME TAX FOR THE YEAR ON CONTINUING OPERATIONS: COMPOSITION
IRES IRAP Total 2006 Total 2005
1. Current taxes (–) 356,098 – 356,098 376,107
1.1 Revenues from consolidated
taxation mechanism 511,200 – 511,200 406,459
1.2 Expense from consolidated
taxation mechanism (33,027) – (33,027) (35,490)
1.3 Taxes from consolidated
taxation mechanism (122,075) – (122,075) –
1.4 IRAP – – – –
1.5 Other – – – 5,138
2. Changes in current taxes
from previous periods (+/–) 15,275 – 15,275 –
3. Reduction of current taxes for the year (+) – – – –
4. Change in deferred tax assets (+/–) (120,586) (2,411) (122,997) (282,352)
5. Change in deferred tax liabilities (+/–) (83,235) 3,669 (79,566) 81,897
6. Taxes for the year (–) (–1+/– 2+ 3 +/–4+/–5) 167,552 1,258 168,810 175,652
18.2 RECONCILIATION OF THEORETICAL TAX LIABILITY AND ACTUAL TAX LIABILITY RECOGNIZED
Statutory profit before taxes 1,275,857
IRES IRAP Total
Tax liability on the basis of theoretical tax rate (421,033) (66,982) (488,015)
+ Tax effects of expenses not relevant to
the calculation of taxable income (139,264) (56,978) (196,242)
– Tax effects of revenues not relevant
to the calculation of taxable income 729,107 141,809 870,916
Tax liability on the basis of actual tax rate 168,810 17,849 (*) 186,659
(*) In view of the irrelevance of the negative value of production for IRAP purposes, the actual tax liability for that tax is zero. The IRAP figures are reported for
solely for the purpose of expository consistency.

173
Section 19 – PROFIT (LOSS) AFTER TAX FROM GROUPS OF ASSETS BEING DIVESTED - ITEM 280
19.1 PROFIT (LOSS) AFTER TAX FROM GROUPS OF ASSETS BEING DIVESTED: COMPOSITION
Total 2006 Total 2005
1 Revenues 1,764 –
2 Expenses – –
3 Result of valuation of groups of assets and associated liabilities – –
4 Gains (losses) on realization – –
5 Taxes and duties (29) –
Profit (loss) 1,735 –
19.2 BREAKDOWN OF INCOME TAX IN RESPECT OF GROUPS OF ASSETS/LIABILITIES BEING DIVESTED
Total 2006 Total 2005
1. Current taxes (–) (29) –
2. Change in deferred tax assets (+/–) – –
3. Change in deferred tax liabilities (+/–) – –
4. Income taxes for the period (–1 +/– 2 +/– 3) (29) –
Section 20 – OTHER INFORMATION
There is no other material information on the income statement.

CAPITALIA
NOTES TO THE FINANCIAL STATEMENTS
Section 21 – NET INCOME PER SHARE
21.1 AVERAGE NUMBER OF DILUTED ORDINARY SHARES
The calculation of earnings per share is based on the following figures:
2006 2005
Net profit for the year euro/1000 1,446,665 596,465
Net profit allocated to ordinary shares (basic) euro/1000 1,446,665 596,465
Net profit allocated to ordinary shares (diluted) euro/1000 1,446,665 596,465
Number of ordinary shares in circulation at 1 January (*) numero/1000 2,510,934 2,206,351
New share issues during the year (average) numero/1000 81,219 298,428
Treasury stock sold during the year (average) numero/1000 100 1,900
Average number of ordinary shares in circulation (basic) numero/1000 2,592,253 2,506,679
Potential exercise of warrants and options numero/1000 15,402 42,177
Average number of ordinary shares in circulation (diluted) numero/1000 2,607,655 2,548,856
Earnings per ordinary share (basic) euro 0.56 0.24
Earnings per ordinary share (diluted) euro 0.55 0.23
(*) net of treasury stock.
21.2 OTHER INFORMATION
There is no other material information.

174 175
PART D – SEGMENT INFORMATION
Capitalia S.p.A., Parent Company of the Capitalia Banking Group, exercising the option envisaged in the Bank of Italy
circular no. 262 of 22 December 2005, reports segment information in Part D of the notes to the consolidated financial
statements.

CAPITALIA
PART E – RISKS AND THE RELATED
HEDGING POLICIES
RISKS OF THE BANK
The Parent Company is responsible for the definition
and development of risk assessment methods, the
control of risks taken on at the Group level, and the
strategic management of these risks. Group companies
retain responsibility for first-level controls, particularly
as concerns the verification that the level of risk taken
on individually is consistent with the Parent Company
instructions, capital resources and prudential
supervision rules.
In order to ensure efficiency, the risk management
process is structured consistently with the organizational
decisions made for the Capitalia Group and with
supervisory instructions governing internal controls at
banks. For more information on this process, please see
Part E, Section 1 – “Banking Group Risks” of the notes to
the consolidated financial statements.
Section 1 – CREDIT RISK
The credit risk exposures of Capitalia under these
arrangements primarily consist of the following:
the granting and management of credit lines with
Italian and foreign correspondent banks;
the granting and management of credit lines with
subsidiaries;
the management of the bad debts of the merger with
Banca di Roma on 1 July 2002, which were not
transferred in the spin-off that gave rise to the “new”
Banca di Roma.
As regards the first area of activity, lending operations
are primarily originated by the need to grant lines of
credit to Italian and foreign correspondent banks within
the scope of centralized finance activities (trading, debt
and equity capital market).
The second area mainly regards centralized and
integrated Group treasury operations (management
of liquidity, short-term treasury operations and
medium/long-term funding).
Qualitative disclosures
1. GENERAL ASPECTS
Within the governance arrangement of the Group,
Capitalia S.p.A. – which is incorporated as a bank – is
directly responsible for the central management of a
number of important Group assets and activities (finance,
interbank transactions, equity investments, large
classified loan positions).
The third area concerns debt collection activities,
both through the direct management of positions in
the portfolio, mainly those that exceed specified
amounts/levels of complexity, and indirectly by
transferring the positions to the Group’s specialized loan
recovery companies.
The system for delegating loan authorization powers
reflects these operations, giving the lead role to the
Lending Committee and, over the established ceilings,

176 177
the Executive Committee in lending operations with
Italian and foreign banks. The Executive Committee is
also responsible for establishing ceilings for country risk.
As regards problem positions, powers are divided among
the various governing bodies (including the Board of
Directors), establishing ceilings that differ in relation to
the various types of decisions to be taken. The
determination of credit ceilings for companies over which
Capitalia exercises legal or de facto control is the
exclusive responsibility of the Board of Directors.
With regard to managing the trading portfolio, the
Finance Area takes on exposures in terms of specific risk
(associated with trading in bonds and related derivatives) and
counterparty risk (associated with trading in OTC derivatives).
Concentration risk is subject to specific operational
restrictions. Credit derivative operations are limited and
carried out for trading purposes, with the use of highly liquid,
low complexity contracts. The overall exposure for each
issuer (differentiated by rating grade) is monitored daily.
As regards counterparty risk, transactions in OTC
derivatives are conducted solely with leading Italian and
foreign counterparties.
As regards counterparty risk, transactions in OTC
derivatives are conducted solely with leading Italian and
foreign counterparties. Credit exposures are monitored
on a continuous basis using IT systems that perform a
preliminary assessment of the impact of each new
transaction on credit facilities.
2. CREDIT RISK MANAGEMENT POLICIES
within the Lending Function, responsible for analysis,
assessment and processing, as well as the preparation of
proposals for the decision-making bodies;
within the Rating and Pricing Agency, responsible for
rating assignment using internal ratings models. The
outputs of the quantitative models are supplemented
with benchmark analyses and additional assessments
based on qualitative and market information.
The activity of the Lending Function originates with
the planned needs of the operating units and mainly
involves two methods of measuring risk:
establishing, for a significant number of leading
foreign banks, predetermined credit ceilings, within the
scope of annual assessments of the correspondents and
the assignment of the relating credit ceiling based on an
evaluation of creditworthiness and internal credit ratings;
the assessment and recommending overall credit
levels to the decision-making body for the Italian and
foreign correspondent banks not included within the
process above.
Capitalia’s Lending Function also manages the credit
lines that are approved, handling their assignment to the
units originating the credit demand.
Credit lines with counterparties in countries subject to
country-risk restrictions must fall under the ceilings (the
country-risk ceiling) set annually by the competent
decision-making body. Responsibility for proposed
operations and management of these positions are also
assigned to the Lending Function, which centralizes this
activity for the Group subsidiaries as well.
2.1 Organizational aspects
Lending operations with Italian and foreign
correspondent banks is carried out through a specific
organizational model in which Capitalia is:
Credit lines with correspondent banks are renewed
annually.
Positions classified as bad debts are managed as
follows:

CAPITALIA
NOTES TO THE FINANCIAL STATEMENTS
Capitalia’s Restructured Loans Function is responsible
for management and collection activities for positions
greater than €20 million and/or are highly complex;
Capitalia Service JV (a joint venture with the Archon
Group) is responsible for debt collection activities for
positions of between €55 thousand and €20 million;
the Group company SIGREC handles remaining
positions.
directly by the retail banks. The latter have established
their own rating and pricing agencies, which are
coordinated by the corresponding structure at
Capitalia.
The opinions issued by internal agencies,
complemented by spread risk adjusted indicators, are
used to back up decisions made by the Lending
Committees, and are also subjected to continuous
verification and backtesting.
The activities of Capitalia Service JV and SIGREC are
coordinated by the Lending Policy line.
Credit monitoring activities include systematic
tracking of developments in the portfolio of bad debts
and the related collection activities conducted by
Capitalia (Restructured Loans Function) and external
companies (CSJV and SIGREC) by monitoring collections
on both the Capitalia portfolio and securitized portfolios.
2.2 Management, measurement and control systems
In 2006 work continued on implementing Basle 2
regulations at the banking group level.
Within the range of rating models, we can distinguish
between corporate models and retail models. Rating
models for corporates in turn break down by customer
type. The modeling of Large Corporates, Banks and
Country Risk is handled centrally by the Internal Rating
and Pricing Agency of the Parent Company.
The outputs of the quantitative models are
supplemented with benchmark analyses and additional
assessments based on qualitative and market
information.
The Mid Corporate, Small Business and Retail
segments are managed using the related rating models
Specific backtesting is performed to assess
performance and consistency with ratings. The findings
of these analyses are reported to senior management
and serve as a basis for period revisions of the models.
The rating models are normally constructed using a
modular approach, with each module incorporating
financial information (financial statements, tax returns),
position performance information (internal and external)
and qualitative assessments of the counterparty. The
weight assigned to each model differs in relation to the
segments being assessed. For example, in rating models
for the Corporate segment, the weight of financial and
qualitative information predominates. Conversely, in the
Retail portfolios, the greatest weight is assigned to the
position performance component.
In 2006, new rating models were created specifically
for farmers, non-profit organizations, financial
companies, holding companies, consortiums and startups.
The models will be progressively incorporated into
the lending processes to increase the percentage of the
loan portfolio covered by this approach.
As regards lending processes, the phases of loan
disbursement, loan monitoring and management of
problem positions were reviewed and upgraded in order
to improve their operation in line with the Basle 2
principles. The process innovations have reached an
advanced stage of implementation in all Group

178 179
companies, with the use of internal rating models and
other information tools to support lending decisions.
For the estimation of LGD, work continued on the
collection and processing of time series, using specific
datarooms, for positions closed over the past seven
years. At the same time work is ongoing on the IT
engineering of EAD and LGD parameters for each loan
position that breaches the regulatory default threshold.
From the organizational and IT point of view, the
project focused on the structure of the database, data
input procedures, quality control and creation of the
calculation engines for the estimations.
For the EAD parameter for the Corporate and Retail
segments, the time series of past due positions required
for the IRB approach were constructed.
stage in order to optimize treatment of such customers
and the use of common information resources. AT the
governance procedures level, operational aspects are
managed through the Group master record and the
survey of corporate groups.
The introduction of lending processes differentiated
by customer segment standardized the approaches
adopted in lending to customers, with the development
of shared algorithms and assessment metrics.
Ratings and expected loss are the key elements in
evaluating lending decisions, differentiating approval
authority, pricing, management activities, and lending
policies. Lending authority has been differentiated on the
basis not only of the nominal exposure assumed but also
expected loss, which is determined in relation to the EAD
and LGD rating parameters.
The overall internal ratings system must be approved
by the supervisory authorities in order to be used for
calculating the capital requirement under the IRB
approach. The Bank of Italy’s pre-validation activities
begun in 2005 are under way.
Internal estimates of creditworthiness and the EAD
and LGD parameters served as the basis for the release
of risk-adjusted pricing systems to support risk/return
decisions in lending process. Risk-adjusted spreads
supplement the outputs from the internal pricing models
with information on developments in market spreads.
The Parent Company, within the scope of its strategic,
management and operational guidance functions,
establishes lending and loan management principles and
guidelines.
At the Group level, rules have been established for
handling customers who have dealings with more than
one Group bank with regard to both the loan approval
and rating assignment stage and the loan management
Other activities associated with the Basle 2 project
regarded the IT aspects of the implementation of the
management tools adopted at each stage of the
lending process. With the completion of the
convergence of Group IT systems, the use of the
electronic lending procedure (PEF) was extended for
the Corporate and Small Business segments to all
Group banks.
The electronic procedures supporting loan processing
also envisage assessing guarantors and guarantees
backing lending relationships. The appraisal process for
guarantees, as a secondary source of repayment in the
event of default, evaluates the following: the adequacy of
the net worth of the guarantor to the guarantee given;
the relationship between borrower and guarantor; and
the guarantor’s profile and rating, if available; and an
appraisal of any collateral.
The guarantees backing lending operations are taken
into consideration for the purposes of calculating the riskadjusted
spread.

CAPITALIA
NOTES TO THE FINANCIAL STATEMENTS
In addition Capitalia developed internal models for
measuring credit risk on both the trading and banking
books at the level of individual banking subsidiaries and
the Group as a whole.
of the banking book to aid in the definition of lending
policy guidelines.
Portfolio models: trading portfolio
Portfolio models: banking book
The second phase of the project at Capitalia to use a
portfolio model to measure the credit risk on the banking
book has been completed, with the creation of a
database that provides extensive coverage of the
Group’s banking book (all ordinary performing
customers, including positions of less than €35
thousand, and banks; only intragroup positions are
excluded). On a monthly basis, economic capital
absorbed (Credit CaR; Component Credit CaR) is
measured using different risk drivers, such as exposure at
default (EAD), loss given default (LGD), asset return
correlation, and probability of default (PD), and, where
available PD estimates using internal models.
The model estimates the distribution of portfolio
losses with a Monte Carlo methodology and importance
sampling over a one-year time horizon and with a 99.93%
confidence level, i.e. a single-factor version of a Merton
default/non-default model with stochastic LGD.
The model also allows for allocation of the portfolio’s
risk capital among the various sub-portfolios obtained
by grouping counterparties on the basis of the following
characteristics: rating, institution, macro-region, region,
line of business, industry, group (for customers
belonging to the 200 largest groups in terms of
exposure) and business unit. The sub-portfolios can also
be constructed by aggregating positions based on an
intersection of two or three of these characteristics,
which makes it possible to construct a “monitoring
panel” to track the risk level and concentration of the
various sub-portfolios. The model results have then
been used to implement the first operational
applications of the system to monitor the concentration
Credit risk taken on within the trading portfolio is
monitored by calculating exposure and expected and
unexpected loss indicators (Credit VaR), which are then
used to analyze the composition by rating class and
industry, as well as the implicit risk related to unexpected
changes in credit ratings. The indicators for exposure and
expected loss are produced daily and reported to the
heads of the various units concerned, while the indicator
for unexpected loss is produced on a monthly basis.
As regards bond trading, the structure of operational
limits approved by Capitalia’s Board of Directors set
trading limits on the basis of nominal net exposure by
type of issuer. The ceilings are monitored on a daily basis.
For OTC derivatives, the Finance Area operates only with
bank counterparties using specific credit lines established
by the Lending Policy Area.
2.3 Credit risk mitigation techniques
In view of the type of operations carried out by
Capitalia S.p.A. (lending to leading banks and Group
companies), credit granted is generally not secured.
Financial transactions with the main bank counterparties
are normally conducted on the basis of ISDA
(International Swaps and Derivatives Association) Master
Agreements with Credit Support Annexes.
As regards operations in the trading book, in line with
the goals achieved in previous years, work continued on
containing legal and counterparty risks in respect of
derivatives trading and repurchase agreements of the
Parent Company with international banks and investment
companies, also expanding Banca di Roma’s operations
with bank, financial, corporate and government

180 181
counterparties. As these operations expanded, risk
decreased thanks to the use of contracts compliant with
ISDA, EMA and ICMA standards with new counterparties.
Having obtained authorization in March and April 2006
from the Bank of Italy relating to 47 Credit Support Annexes
(CSA), Capitalia can utilize the benefits allowed by the law
relating to bilateral netting agreements for 46 derivative
contracts, as well as 7 ISDA Master Agreements which can
enjoy the benefits of netting agreements. This has
increased the benefits in terms of reducing the capital that
needs to be committed to meet regulatory requirements.
Capitalia also uses 27 Global Master Repurchase
Agreements (GMRAs) for repurchase operations.
With a view to containing legal risk and harmonizing
contracts across the Group, a further 45 ISDA contracts are
outstanding, entered into by the Parent Company on behalf
of Banca di Roma on the basis of a specific service contract.
2.4 Impaired financial assets
The procedures for classifying loans are consistent
with international accounting standards and the
instructions issued by the Bank of Italy, as described in
detail in the section “Impaired financial assets” in the
notes to the consolidated financial statements.
The impaired loans portfolio is primarily composed of
bad debts, with a marginal proportion of restructured
positions. In line with IASs/IFRSs, the loan book is
measured by individual relationship, both in terms of
recoverable amount and collection periods. For
revocatory actions in bankruptcy and guarantees, the
expected timing of the outlay/discussion is assessed.
More information is provided in the section “Impaired
financial assets” in the notes to the consolidated financial
statements.

CAPITALIA
NOTES TO THE FINANCIAL STATEMENTS
Quantitative disclosures
A. CREDIT QUALITY
A.1 IMPAIRED AND PERFORMING POSITIONS: STOCKS, WRITEDOWNS, CHANGES, DISTRIBUTION BY SECTOR AND
GEOGRAPHICAL AREA
A.1.1 DISTRIBUTION OF FINANCIAL ASSETS BY PORTFOLIO AND CREDIT QUALITY (BOOK VALUE)
Bad debts Substandard Restructured Past due Country Other Total
loans positions positions risk assets
1. Financial assets held for trading – – – – 103 7,558,533 7,558,636
2. Financial assets available for sale – – – – – 2,467,954 2,467,954
3. Financial assets held to maturity – – – – 648 791,343 791,991
4. Loans to banks – – – – 23 39,158,072 39,158,095
5. Loans to customers 1,613,974 – 7,140 – – 1,221,722 2,842,836
6. Financial assets designated at fair value – – – – – 43,308 43,308
7. Financial assets being divested – – – – – – –
8. Hedging derivatives – – – – – 285,649 285,649
Total 1,613,974 – 7,140 – 774 51,526,581 53,148,469
Total 2005 1,729,783 – 16,167 – 20,325 54,686,483 56,452,758
A.1.2 DISTRIBUTION OF FINANCIAL ASSETS BY PORTFOLIO AND CREDIT QUALITY (GROSS AND NET VALUES)
Impaired assets
Other assets
Gross Specific Portfolio Net Gross Portfolio Net Total
exposure adjustments adjustments exposure exposure adjustments exposure
1. Financial assets held for trading – – – – X X 7,558,636 7,558,636
2. Financial assets available for sale – – – – 2,467,954 – 2,467,954 2,467,954
3. Financial assets held to maturity – – – – 792,271 280 791,991 791,991
4. Loans to banks – – – – 39,158,095 – 39,158,095 39,158,095
5. Loans to customers 4,728,238 3,107,124 – 1,621,114 1,221,722 – 1,221,722 2,842,836
6. Financial assets designated at fair value – – – – X X 43,308 43,308
7. Financial assets being divested – – – – – – – –
8. Hedging derivatives – – – – X X 285,649 285,649
Total 4,728,238 3,107,124 – 1,621,114 43,640,042 280 51,527,355 53,148,469
Total 2005 4,969,273 3,223,323 – 1,745,950 43,568,429 1,880 54,706,808 56,452,758

182 183
A.1.3 CASH AND OFF-BALANCE-SHEET EXPOSURE TO BANKS: GROSS AND NET VALUES
Gross Specific Portfolio Net
exposure writedowns writedowns exposure
A. CASH EXPOSURES
a) Bad debts – – – –
b) Substandard loans – – – –
c) Restructured positions – – – –
d) Past due positions – – – –
e) Country risk 23 X – 23
f) Other assets 40,071,042 X – 40,071,042
TOTAL A 40,071,065 – – 40,071,065
B. OFF-BALANCE-SHEET EXPOSURES
a) Impaired – – – –
b) Other 6,241,568 X – 6,241,568
TOTAL B 6,241,568 – – 6,241,568
A.1.4 CASH EXPOSURES TO BANKS: CHANGES IN GROSS IMPAIRED POSITIONS EXPOSED TO COUNTRY RISK
Bad debts Substandard Restructured Past due Country
loans positions positions risk
A. Opening gross exposure – – – – 4,176
– of which: exposures assigned
but not derecognized – – – – –
B. Increases – – – – 10
B.1 from performing positions – – – – –
B.2 transfers from other
categories of impaired positions – – – –
B.3 other increases – – – – 10
C.Decreases – – – – 4,163
C.1 to performing positions – – – – 4,163
C.2. writeoffs – – – – –
C.3. collections – – – – –
C.4. assignments – – – – –
C.5. transfers to other
categories of impaired positions – – – –
C.6. other decreases – – – – –
D. Closing gross exposure – – – – 23
– of which: exposures assigned
but not derecognized – – – – –

CAPITALIA
NOTES TO THE FINANCIAL STATEMENTS
A.1.5 CASH EXPOSURES TO BANKS: CHANGES IN TOTAL ADJUSTMENTS
No data at 31 December 2006.
A.1.6 CASH AND OFF-BALANCE-SHEET EXPOSURES TO CUSTOMERS: GROSS AND NET VALUES
Gross Specific Portfolio Net
exposure writedowns writedowns exposure
A. CASH EXPOSURES
a) Bad debts 4,718,998 3,105,024 – 1,613,974
b) Substandard loans – – – –
c) Restructured positions 9,239 2,099 – 7,140
d) Past due positions – – – –
e) Country risk 1,031 X 280 751
f) Other assets 6,789,212 X – 6,789,212
TOTAL A 11,518,480 3,107,123 280 8,411,077
B. OFF-BALANCE-SHEET EXPOSURES
a) Impaired 161,745 18,073 – 143,672
b) Other 1,584,554 X – 1,584,554
TOTAL B 1,746,299 18,073 – 1,728,226

184 185
A.1.7 CASH EXPOSURES TO CUSTOMERS: CHANGES IN GROSS IMPAIRED POSITIONS EXPOSED TO COUNTRY RISK
Bad debts Substandard Restructured Past due Country
loans positions positions risk
A. Opening gross exposure 4,950,246 – 19,027 – 18,029
– of which: exposures assigned
but not derecognized – – – – –
B. Increases 221,525 – 624 – 90
B.1. from performing loans – – – – –
B.2 transfers from
other categories
of impaired positions 8,496 – – – –
B.3 other increases 213,029 – 624 – 90
C. Decreases 452,773 – 10,412 – 17,088
C.1. to performing loans – – – – 15,899
C.2. writeoffs 202,792 – – – –
C.3. collections 236,776 – 1,766 – 894
C.4. assignments 22 – – – –
C.5.
transfers to
other categories
of impaired positions – – 8,496 – –
C.6. other decreases 13,183 – 150 – 295
D. Closing gross exposure 4,718,998 – 9,239 – 1,031
– of which: exposures assigned
but not derecognized – – – – –

CAPITALIA
NOTES TO THE FINANCIAL STATEMENTS
A.1.8 CASH EXPOSURES TO CUSTOMERS: CHANGES IN TOTAL ADJUSTMENTS
Bad debts Substandard Restructured Past due Country
loans positions positions risk
A. Total opening adjustments 3,220,463 – 2,860 – 1,880
– of which: exposures
assigned
but not derecognized – – – – –
B. Increases 339,368 – 15 – –
B.1 writedowns 339,368 – 15 – –
B.2 transfers from other
categories of impaired
positions – – – – –
B.3 other increases – – – – –
C. Decreases 454,807 – 776 – 1,600
C.1. writebacks
from valuations 144,459 – 599 – 1,511
C.2. writebacks from
collections 107,556 – 177 – –
C.3. writeoffs 202,792 – – – –
C.4. transfers to other
categories of impaired
positions – – – – –
C.5. other decreases – – – – 89
D. Total closing adjustments 3,105,024 – 2,099 – 280
– of which: exposures
assigned but not
derecognized – – – – –
A.2 CLASSIFICATION OF EXPOSURES ON THE BASIS OF EXTERNAL AND INTERNAL RATINGS
A.2.1 DISTRIBUTION OF CASH EXPOSURES AND OFF BALANCE SHEET EXPOSURES BY EXTERNAL RATING GRADES
(BOOK VALUE)
External rating grades
Default
AAA/AA- A+/A- BBB+/BBB- BB+/BB- B+/B- Lower (bad debts, Not Total
than B substandard rated
loans, past
due,restructured
loans)
A. Cash exposures 7,588,257 31,967,231 499,811 116,055 11,492 648 1,621,114 6,677,534 48,482,142
B. Derivatiaves 894,803 695,762 506 2,229 – – – 856,443 2,449,743
B.1 Financial derivatives 894.393 695,377 506 2,229 – – – 581,917 2,174,422
B.2 Credit derivatives 410 385 – – – – – 274,526 275,321
C. Guarantees issued – 2,425,760 – – – – 143,673 831,124 3,400,557
D. Commitments to disburse funds 15,000 820,390 – 2,380 – – – 1,281,724 2,119,494
Total 8,498,060 35,909,143 500,317 120,664 11,492 648 1,764,787 9,646,825 56,451,936

186 187
A.2.2 DISTRIBUTION OF CASH AND OFF BALANCE SHEET EXPOSURES BY INTERNAL RATING GRADES (BOOK VALUE)
Internal rating grades
Default
Low Medium Medium High (bad debts, not Total
risk low high risk substandard rated
risk risk loans, past
due loans,
restructured
loans)
A. Cash exposures 11,575,850 11,347 6,301 835 1,621,114 35,266,695 48,482,142
B. Derivatives 1,393,348 2,229 – – – 1,054,166 2,449,743
B.1 Financial derivatives 1,377,549 2,229 – – – 794,644 2,174,422
B.2 Credit derivatives 15,799 – – – – 259,522 275,321
C. Guarantees issued – – – – 143,673 3,256,884 3,400,557
D. Commitments to disburse
funds 114,999 – – – – 2,004,495 2,119,494
Total 13,084,197 13,576 6,301 835 1,764,787 41,582,240 56,451,936
The credit exposures of Capitalia S.p.A. essentially
regard bank counterparties and country risk. Most of
these eposures are to investment grade counterparties.
The percentage coverage is normal, given the
characteristics of the credit portfolio
As regards the internal ratings assigned, the
percentage coverage reflects the state of
implementation of the internal rating models for bank
counterparties (OECD banks model and EM banks
model) and for country risk (OECD countries model and
EM countries model), taking account of unrated
exposures with Group companies totaling €33.3 million,
of which 29.2 million in actual lending. The internal
models were developed using a shadow rating approach
and do not incorporate the evolution under way in the
Moody’s methodology for joint default analysis (JDA).
The master scale used by Capitalia envisages 22 rating
grades. and the trend in the probability of default is
exponential with respect to the rating grade.
The rating grades have been grouped in these notes
to facilitate understanding of the level of risk presented
by the portfolio. Specifically, as noted, given the
exponential nature of the relationship between the
probability of default and rating grades, the latter have
been grouped as followed:
low risk: grades 1–10;
medium-low risk: grades 11 – 14;
medium-high risk: grades 15 – 18;
high risk: grades 19 – 22.
The percentage of the low–risk portfolio with internal
ratings with respect to total internally rated
counterparties is in line with the percentage of
investment grade positions with external ratings with
respect to total externally rated counterparties. The
percentage coverage with internal models will increase
rapidly as procedures for lending to banks are renewed
and the models for estimating probability of default for
financial counterparties are implemented.

CAPITALIA
NOTES TO THE FINANCIAL STATEMENTS
A.3 DISTRIBUTION OF SECURED EXPOSURES BY TYPE OF GUARANTEE
A.3.1 SECURED CASH EXPOSURES TO BANKS AND CUSTOMERS
Value of exposure Collateral (1)
Land and buildings Securities Other assets Governments
1. Secured exposures to banks
1.1 fully secured – – – –
1.2 partially secured – – – –
2. Secured exposures to customers
2.1 fully secured 697,840 317,803 11,554 4,294 –
2.2 partially secured 155,566 45,443 3,472 259 –
A.3.2 SECURED OFF-BALANCE-SHEET EXPOSURES TO BANKS AND CUSTOMERS
Value of exposure Collateral (1)
Land and buildings Securities Other assets Governments
1. Secured exposures to banks
1.1 fully secured 553,519 – – 553,519 –
1.2 partially secured 341,662 – 32,464 252,012 –
2. Secured exposures to customers
2.1 fully secured – – – – –
2.2 partially secured – – – – –

188 189
Credit derivatives
Unsecured guarantees (2)
Guarantees
Other government Banks Other Governments Other government Banks Other
agencies agencies Total (1)+(2)
– – – – – – – –
– – – – – – – –
– – – – 40 1,672 352,500 687,863
– – – – 24 698 83,216 133,112
Credit derivatives
Unsecured guarantees (2)
Guarantees
Other government Banks Other Governments Other government Banks Other
agencies agencies Total (1)+(2)
– – – – – – – 553,519
– – – – – – – 284,476
– – – – – – – –
– – – – – – – –

CAPITALIA
NOTES TO THE FINANCIAL STATEMENTS
A.3.3 IMPAIRED SECURED CASH EXPOSURES TO BANKS AND CUSTOMERS
Value of
exposure
Amount
secured
Collateral
Unsecured guarantees
Credit derivatives
Land and Securities Other Governments Other Banks Financial
buildings assets and central government companies
bank agencies
1. Secured exposures to banks
1.1 more than 150% – – – – – – – – –
1.2 from 100% to 150% – – – – – – – – –
1.3 from 50% and 100% – – – – – – – – –
1.4 up to 50% – – – – – – – – –
2. Secured exposures to customers
2.1 more than 150% 274,249 274,249 201,257 9,602 1,906 – – – –
2.2 from 100% to 150% 139,981 139,981 104,199 691 57 – – – –
2.3 from 50% and 100% 379,646 377,294 46,268 3,077 2,487 – – – –
2.4 up to 50% 50,290 33,182 2,282 1,657 101 – – – –
A.3.4 IMPAIRED SECURED OFF BALANCE SHEET EXPOSURES TO BANKS AND CUSTOMERS
No data at 31 December 2006.

190 191
Guarantees (fair value) Total Excess
fair value
Unsecured guarantees
of guarantee
Guarantees
Insurance Non-financial Other Governments Other Banks Financial Insurance Non-financial Other
undertakings companies and central governments companies undertakings companies
bank agencies
– – – – – – – – – – – –
– – – – – – – – – – – –
– – – – – – – – – – – –
– – – – – – – – – – – –
– – – – 9 198 3,598 – 13,916 41,989 272,475 12,139,122
– – – – 20 16 49 – 6,123 20,623 131,778 319,195
– – – – 36 2,129 11,506 – 178,733 132,709 376,945 380,824
– – – – – 27 3,480 – 6,217 16,772 30,536 4,974

CAPITALIA
NOTES TO THE FINANCIAL STATEMENTS
B. DISTRIBUTION AND CONCENTRATION OF LENDING
B.1 CASH AND OFF-BALANCE-SHEET EXPOSURES TO CUSTOMERS BY SECTOR
A. Cash exposures
Governments and central banks Other government agencies Financial companies
Gross Specific Portfolio Net Gross Specific Portfolio Net Gross Specific Portfolio Net
exposure writedowns writedowns exposure exposure writedowns writedowns exposure exposure writedowns writedowns exposure
A.1 Bad debts – – – – 32,171 13,221 – 18,950 182,165 143,423 – 38,742
A.2 Substandard
loans – – – – – – – – – – – –
A.3 Restructured
positions – – – – – – – – – – – –
A.4 Past due
positions – – – – – – – – – – – –
A.5 Other 1,175,388 X – 1,175,388 8,988 X 280 8,708 4,250,775 X – 4,250,775
Total A 1,175,388 – – 1,175,388 41,159 13,221 280 27,658 4,432,940 143,423 – 4,289,517
B. Off -balance--sheet
exposures
B.1 Bad debts – – – – – – – – 82 – – 82
B.2 Substandard loans – – – – – – – – – – – –
B.3 Other impaired assets – – – – – – – – – – – –
B.4 Other – X – – – X – – 1,292,003 X – 1,292,003
Total B – – – – – – – – 1,292,085 – – 1,292,085
Total (A+B) 1,175,388 – – 1,175,388 41,159 13,221 280 27,658 5,725,025 143,423 – 5,581,602

192 193
Insurance undertakings Non-financial companies Other
Gross Specific Portfolio Net Gross Specific Portfolio Net Gross Specific Portfolio Net
exposure writedowns writedowns exposure exposure writedowns writedowns exposure exposure writedowns writedowns exposure
– – – – 3,688,001 2,472,740 – 1,215,261 816,661 475,640 – 341,021
– – – – – – – – – – – –
– – – – 9,239 2,099 7,140 – – – –
– – – – – – – – – – – –
241,200 X – 241,200 1,068,306 X – 1,068,306 45,586 X – 45,586
241,200 – – 241,200 4,765,546 2,474,839 – 2,290,707 862,247 475,640 – 386,607
– – – – 161,433 18,073 – 143,360 230 – – 230
– – – – – – – – – – – –
– – – – – – – – – – – –
6,814 X – 6,814 66,114 X – 66,114 219,623 X – 219,623
6,814 – – 6,814 227,547 18,073 – 209,474 219,853 – – 219,853
248,014 – – 248,014 4,993,093 2,492,912 – 2,500,181 1,082,100 475,640 – 606,460

CAPITALIA
NOTES TO THE FINANCIAL STATEMENTS
B.2 DISTRIBUTION OF LOANS TO RESIDENT NON-FINANCIAL COMPANIES
Total 2006
a) Building and public works 517,782
b) Trade, recovery and repair services 222,705
c) Other market services 148,292
d) Food products, beverages and tobacco products 55,520
e) Agriculture, forestry and fishing 39,079
f) Other sectors 231,578
B.3 CASH AND OFF-BALANCE-SHEET EXPOSURES TO CUSTOMERS BY GEOGRAPHICAL AREA
A. Cash exposures
Italy Other European countries America Asia Rest of world
Gross Net Gross Net Gross Net Gross Net Gross Net
exposure exposure exposure exposure exposure exposure exposure exposure exposure exposure
A.1 Bad debts 4,654,290 1,603,322 4,515 2,846 60,182 7,799 – – 11 7
A,2 Substandard loans – – – – – – – – – –
A.3 Restructured positions 9,239 7,140 – – – – – – – –
A.4 Past due positions – – – – – – – – – –
A.5 Other 4,656,225 4,656,225 2,034,401 2,034,401 98,478 98,198 – – 1,139 1,139
Total A 9,319,754 6,266,687 2,038,916 2,037,247 158,660 105,997 – – 1,150 1,146
B. Off– balance– sheet
exposures
B.1 Bad debts 161,745 143,672 – – – – – – – –
B.2 Substandard loans – – – – – – – – – –
B.3 Other impaired assets – – – – – – – – – –
B.4 Other 1,538,860 1,538,860 45,691 45,691 3 3 – – – –
Total B 1,700,605 1,682,532 45,691 45,691 3 3 – – – –
Total (A+B) 11,020,359 7,949,219 2,084,607 2,082,938 158,663 106,000 – – 1,150 1,146

194 195
B.4 CASH AND OFF-BALANCE-SHEET EXPOSURE TO BANKS BY GEOGRAPHICAL AREA
A. Cash exposures
Italy Other European countries America Asia Rest of world
Gross Net Gross Net Gross Net Gross Net Gross Net
exposure exposure exposure exposure exposure exposure exposure exposure exposure exposure
A.1 Bad debts – – – – – – – – – –
A.2 Substandard loans – – – – – – – – – –
A.3 Restructured positions – – – – – – – – – –
A.4 Past due positions – – – – – – – – – –
A.5 Other 32,527,310 32,527,310 7,075,721 7,075,721 375,411 375,411 22,182 22,182 70,441 70,441
Total A 32,527,310 32,527,310 7,075,721 7,075,721 375,411 375,411 22,182 22,182 70,441 70,441
B. Off-balance-sheet
exposures
B.1 Bad debts – – – – – – – – – –
B.2 Substandard loans – – – – – – – – – –
B.3 Other impaired assets – – – – – – – – – –
B.4 Other 1,711,693 1,711,693 4,308,574 4,308,574 221,297 221,297 4 4 – –
Total B 1,711,693 1,711,693 4,308,574 4,308,574 221,297 221,297 4 4 – –
Total (A+B) 34,239,003 34,239,003 11,384,295 11,384,295 596,708 596,708 22,186 22,186 70,441 70,441
B.5 LARGE EXPOSURES
Total 2006 Total 2005
a) amount – –
b) number – –
At 31 December 2006 (as at end-2005) Capitalia S.p.A. reported no large exposures.
C. SECURITIZATIONS AND ASSET DISPOSALS
C.1 SECURITIZATIONS
Qualitative disclosures
The Bank carried out three securitizations between
1999 and 2001.
Debt collection for the securitizations carried out by
the sub-servicer Capitalia Service JV through the special
purpose vehicles Trevi Finance, Trevi Finance 2 e Trevi
Finance 3 showed an increase in 2006 of 11.5% on 2005,
which in turn had posted an improvement of 31.7% on
2004. The cumulative collections amounted to €508.2
million, compared with €455.6 million in 2005. The key
figures for 2005 are as follows:
Trevi Finance posted collections of €137.4 million
(+5.5% on 2005);
Trevi Finance 2 posted collections of €207.6 million
(+12.7%);

CAPITALIA
NOTES TO THE FINANCIAL STATEMENTS
Trevi Finance 3 posted collections of €163.2 million
(+15.7%).
A total of 1,916 discounted pay –off agreements were
entered into, an increase of 6%. The real estate trading
vehicles took part in 451 court-ordered auctions, with an
amount awarded totaling €100.8 million, a 5% increase
over 2005. The profitability of collections (as a
percentage of the gross value at the securitization date)
was 61%, in line with 2005 and above the historic
average of 58%.
* * *
In the first securitization operation, the special
purpose vehicle (Trevi Finance) acquired bad debts
with a total nominal value of €2,689 million for a
price of €1,441 million and other claims for the
purpose of acquiring zero-coupon securities issued
by leading supranational and government bodies
amounting to €94 million, against which it issued the
following securities with a total value of €1,535
million:
TYPE OF SECURITY Issue Maturity Characteristics of issue Nominal value
value
of outstanding securities
(amounts in euros) al 31.12.2006 (*)
CLASS A (SENIOR) 620,000,000 16-8-2009 euribor 6 m +140 b,p. –
CLASS B (SENIOR) 155,000,000 16-8-2009 euribor 6 m +240 b.p. 56,254,150
CLASS C1 (MEZZANINE) 206,500,000 16-8-2009 euribor 6 m +40 b.p. 206,500,000
CLASS C2 (MEZZANINE ZERO COUPON) 210,700,000 16-8-2014 zero coupon issued at 43%
of maturity value (490,000,000) 319,717,499
CLASS D (JUNIOR) 343,200,000 16-8-2025 2,75% annual 343,200,000
Total 1,535,400,000 925,671,649
(*) The Class A senior notes have been fully redeemed; the figure for the Senior B security refers to 16 February 2007, after the payment date.
Repayment of principle and payment of interest on the C1, C2 and D classes are subordinated to payment of principal and interest on the immediately higher
class, while all are subordinate to Classes A and B. The principal of Class D is secured by the claim linked to the zero-coupon securities. Class B is only
subordinate to Class A for the repayment of principal, not interest.
At 31 December 2006 the Class B security had ratings of A2/A-/AAA from Moody’s Investors Service, Duff & Phelps Credit Rating and Fitch Ratings Limited,
respectively.
The Bank has also granted the special purpose
vehicle two credit facilities with an original value of
€318.5 million. The first, the servicer’s advance facility
(SAF), amounts to €310 million and is intended to
provide additional liquidity if receipts are lower than the
established minimum amounts. Reimbursement of the
servicer’s advance facility is subordinate to redemption
of the principal and interest on the Class A and B
securities. Drawings on the SAF pay an interest rate of 6-
month euribor + 20 basis points.
The Bank has also sold an interest rate cap to the
special purpose vehicle to hedge the interest rate risk of
the issuer for the Class A and B securities and the
amount of the SAF drawn.
In December 2002 Capitalia amended the interest
rate cap and servicer’s advance facility agreements
between Trevi Finance S.p.A. and Capitalia S.p.A.,
subject to approval by the Note Trustee and the Security
Trustee. The amendments envisage:
an increase of €20 million in the liquidity available to
Trevi Finance;
the novation of the interest rate cap agreement with
the elimination of the liquidity facilities from the principal
protected by the interest rate cap.

196 197
At the start of 2004, the SAF was increased by €15
million to €345 million. At 31 December 2006, the
utilization of the SAF, inclusive of interest, was €203.9
million. At the payment date of 16 February 2007, €35.2
million was repaid.
The second (Class C1) liquidity facility originally
amounted to €8.5 million, to be increased each year in
line with the accrual of interest on the Class C1 securities.
It is used to make advance payment of interest on Class
C1 while waiting for collections on the portfolio to
become available for that class (only after repayment of
Classes A and B). The Class C1 liquidity facility bears an
interest rate of euribor at the payment date + 40 basis
points. At 31 December 2006, utilization amounted to
€59 million, including interest. At the payment date of 16
February 2007, a further €4 million had been drawn on
the credit facility.
As regards the Class D securities subscribed by the
Bank, repayment of the principal is guaranteed at
maturity by zero-coupon securities issued by leading
international and/or government bodies (the value of the
guarantees at 31 December 2006 was €137.9 million).
The guarantees given to the subscribers of Classes C1
and C2, the lines of credit and the interest rate cap were
valued appropriately.
At 31 December 2006, the Bank had a total of €362.9
million of Trevi Finance securities in its portfolio of
available-for-sale securities, as follows:
Securities Nominal Book
value
value
Class B 10.3 10.4
Class C1 176.5 181.6
Class C2 490.0 10.8
Class D 343.2 160.1
Total 362.9
Collections in the period and the value of remaining
claims are set out in the following table:
Value of receivables
Period Ordinary loans Real estate Total attributable
(amounts in euros) loans to Capitalia
at end-period (*)
2 nd half 1999 40,820,295 10,786,190 51,606,485 1,539,469,853
2000 58,759,143 34,392,664 93,151,807 1,412,477,814
2001 48,535,426 28,335,882 76,871,308 1,313,239,898
2002 45,890,552 26,147,943 72,038,495 1,191,003,958
2003 47,960,792 31,328,204 79,288,996 1,070,712,900
2004 78,053,948 50,378,646 128,432,594 914,714,204
2005 70,238,195 60,049,854 130,288,049 784,889,070
2006 71,263,786 66,127,007 137,390,793 661,275,129
Total 461,522,137 307,546,390 769,068,527
(*) Estimated realizable value. The figures do not include default interest considered recoverable amounting to €52.4 million at 31 December 2006.

CAPITALIA
NOTES TO THE FINANCIAL STATEMENTS
A total of 39.8% of positions assigned by the Bank
had been closed since the start of the operation.
In the second securitization, the special purpose
vehicle (Trevi Finance 2) acquired bad debts (from Banca
di Roma and Mediocredito di Roma, subsequently
merged into MCC) for a total nominal value of €2,425
million for a price of €1,520 million (of which Capitalia
€1,365 million and MCC €155 million) and other claims
for the purpose of acquiring zero-coupon securities
issued by leading supranational and government bodies
amounting to €98 million at the time of the purchase,
against which it issued the following securities with a total
value of €1,620 million:
TYPE OF SECURITY Issue Maturity Characteristics of issue Nominal value
value
of outstanding securities
(amounts in euros) al 31.12.2006 (*)
CLASS A (SENIOR) 650,000,000 16-8-2010 euribor 6 m +110 b.p. –
CLASS B (SENIOR) 200,000,000 16-8-2010 euribor 6 m +210 b.p. 21,906,000
CLASS C (MEZZANINE ZERO COUPON) 355,000,000 16-8-2015 zero coupon issued at 35,50%
of maturity value (1,000,000,000) 558,300,275
CLASS D (JUNIOR) 414,378,178 16-8-2026 3,00% annual 414,378,178
Total 1,619,378,178 994,584,453
(*) Senior A security has been completely repaid. The figure for Class B securities relates to 16 February 2007, after the payment date.
Repayment of principal and payment of interest on the C and D classes are subordinated to payment of principal and interest on the immediately higher class, while
both are subordinated to Classes A and B. The principal of Class D is secured by the claim linked to the zero-coupon securities. Class B is only subordinate to Class
A for the repayment of principal, not interest. At 31 December 2006 the Class B security had ratings of A2/A-/AAA from Moody’s Investors Service, Duff & Phelps
Credit Rating and Fitch Ratings Limited, respectively.
The Bank has granted the special purpose vehicle a
credit facility of €380 million (at 31 December 2006
utilization amounted to €219.5 million) to provide
liquidity if collections are lower than the established
minimum amounts. The credit facility is guaranteed by
ABN AMRO for €250 million. At the payment date of 16
February 2007, €63.1 million was repaid.
The interest rate risk is hedged by a swap with ABN
AMRO, which in turn hedged the exposure with a similar
contract with the bank. In other words, the interest rate
risk of the special purpose vehicle is ultimately borne by
the Bank.
As regards the tranche D securities (which the Parent
Company acquired in their entirety with the partial nonproportional
demerger of MCC to Capitalia), the
principal is secured at maturity by the zero-coupon
securities issued by leading international and
government bodies (the value of the securities pledged
as collateral was equal to €143.7 million at 31 December
2006). The guarantees given to the subscribers of Class C
and the credit facility have been valued appropriately. At
31 December 2006 the Bank had a total of €877.1 million
of these securities in its portfolio of available-for-sale
assets, divided as follows:
Securities Nominal Book
value
value
Class B 2.1 2.1
Class C 1,000.0 599.3
Class D 414.4 275.7
Total 877.1
Collections relating to the portfolios assigned by
Capitalia are shown in the following table:

198 199
Value of receivables
Period Ordinary loans Real estate Total attributable
(amounts in euros) loans to Capitalia
at end-period (*)
2000 24,569,537 53,291,312 77,860,849 1,452,886,491
2001 25,216,115 59,954,814 85,170,929 1,354,940,711
2002 16,996,377 75,260,499 92,256,876 1,247,791,919
2003 16,601,507 73,915,462 90,516,969 1,117,722,749
2004 37,564,312 174,093,390 211,657,702 936,038,098
2005 13,830,706 142,661,513 156,492,219 784,056,915
2006 13,807,209 175,314,913 189,122,122 589,442,019
Total 148,585,763 754,491,903 903,077,666
(*) Estimated realizable value. The figures do not include default interest considered recoverable amounting to €160.9 million at 31 December 2006.
The residual estimated realizable value of the loans in
the portfolio of the special purpose vehicle at 31
December 2006 was equal to €660.1 million, of which
Capitalia €589.5 million and MCC €70.6 million. A total
of 45.2% of positions assigned have been closed since
the start of the operation.
In the third securitization, carried out in May 2001, the
special purpose vehicle (Trevi Finance 3) acquired bad
debts (from Banca di Roma, Mediocredito Centrale and
LeasingRoma) with a total nominal value of €2,745
million for a price of €1,416 million (of which Capitalia
€1,306 million, MCC €73 million and LeasingRoma €37
million) and other claims for the purpose of acquiring
zero-coupon securities issued by leading supranational
and government bodies amounting to €102 million at
the time of the purchase, against which it issued the
following securities with a total value of €1,518 million:
TYPE OF SECURITY Issue Maturity Characteristics of issue Nominal value
value
of outstanding securities
(amounts in euros) al 31.12.2006 (*)
CLASS A (SENIOR) 600,000,000 16-8-2011 euribor 6 m +95 b.p. 140,454,000
CLASS B (SENIOR) 150,000,000 16-8-2011 euribor 6 m +210 b.p. 150,000,000
CLASS C1 (MEZZANINE ZERO COUPON) 160,000,000 16-8-2016 zero coupon issued at 31.20%
of maturity value (512,821,000) 245,616,739
CLASS C2 (MEZZANINE ZERO COUPON) 160,000,000 16-8-2016 zero coupon issued at 32%
of maturity value (500,000,000) 243,338,322
CLASSE D (JUNIOR) 448,166,000 16-8-2026 2.75% annual 448,166,000
Total 1,518,166,000 1,227,575,061
(*) The figure for the Senior A Security refers to 16 February 2007, after the payment date.
Repayment of principal and payment of interest on the C1, C2 and D classes are subordinated to payment of principal and interest on the immediately higher
class, while all are subordinate to Classes A and B. The principal of Class D is secured by the claim linked to the zero-coupon securities. Class B is only subordinate
to Class A for the repayment of principal, not interest.
At 31 December 2006 the Class A security had ratings of Aa1/AA/AA from Moody’s Investors Service, Standard & Poor’s and Fitch Ratings Limited, respectively.
At 31 December 2006 the Class B security had ratings of A2/A-/A from Moody’s Investors Service, Standard & Poor’s and Fitch Ratings Limited, respectively.

CAPITALIA
NOTES TO THE FINANCIAL STATEMENTS
Classes C1 and C2 were fully subscribed by the bank
and subsequently restructured for disposal. Classes C1
and C2 represent the special purpose vehicle’s
mezzanine debt and as such were structured as 15-year
zero-coupon securities to optimize the vehicle’s cash
flow. The difference between the two tranches is that only
the first may be repaid early in relation to the actual
performance of the underlying credit recoveries. Both are
guaranteed by the bank, but to render them more
attractive to investors, they required restructuring, which
entailed their transformation into securities with floatingrate
coupons. To this end, the securities were assigned to
a specially-established vehicle, Entasi S.r.l., which
financed the purchase by issuing floating-rate notes
paying a semiannual coupon (totaling a nominal €320
million) underwritten by Banca di Roma’s London branch
and subsequently placed with investors (with a current
nominal value of €210.5 million).
Entasi S.r.l. was able to correlate the fixed rate paid on
the C1 and C2 securities with the floating rate on the new
securities by means of a zero-coupon interest rate swap
with the bank. In 2003 it transferred the contract to ABN
AMRO, guaranteeing the latter that it would replace
Entasi in the contract should a trigger event occur.
The Bank has granted a credit facility of €355 million
(at 31 December 2006 utilization, including interest,
amounted to €65.2 million) to Trevi Finance 3 to provide
liquidity if collections are lower than established
minimum amounts. The credit facility is in turn
guaranteed by ABN AMRO for €275 million. At the
payment date of 16 February 2007, €11.8 million was
repaid.
As regards the Class D securities subscribed by the
Bank, the principal is secured at maturity by the zerocoupon
securities issued by leading international and
government bodies (the value of the securities pledged
as collateral was equal to €142.6 million at 31 December
2006). The guarantees given to the subscribers of Classes
C1 and C2 and the credit facility have been valued
appropriately. In this regard, at 31 December 2006,
€236.2 million was allocated to provisions for guarantees
and commitments.
At 31 December 2006, the Bank had a total of €310.8
million of these securities in its AFS portfolio, divided as
follows:
Securities Nominal Book
value
value
Entasi Securities 109.5 115.1
Class D 448.2 195.7
Total 310.8
Collections are shown in the following table:
Value of receivables
Period Ordinary loans Real estate Total attributable
(amounts in euros) loans to Capitalia
at end-period (*)
2 nd half 2001 51,716,552 20,117,883 71,834,435 1,470,172,512
2002 58,782,600 31,683,036 90,465,636 1,311,632,786
2003 51,006,467 25,380,507 76,386,974 1,191,890,736
2004 56,925,525 52,205,976 109,131,501 1,036,885,076
2005 66,451,847 66,551,230 133,003,077 910,036,130
2006 76,410,689 67,700,404 144,111,093 759,019,693
Total 361,293,680 263,639,036 624,932,716
(*) Estimated realizable value. The figures do not include default interest considered recoverable amounting to €38.2 million at 31 December 2006.

200 201
The residual estimated realizable value of the loans in
the portfolio of the special purpose vehicle at 31
December 2006 was €813.2 million, of which Capitalia
€759 million and MCC €54.2 million.
* * *
The application of IAS/IFRS as of 2005 necessitated a
review of the methodology used until 31 December 2004
for the recognition of the securities in the three Trevi
finance operations under first-time adoption and the
results at 31 December 2005.
As from 2002, these securities have been
measured in accordance with a model that takes
account of their estimated realizable value over time,
which is based on the expected collections on the
portfolio of claims that back the operation. After the
remodulation of the cash flows, the model also
establishes the procedures and timing of the use of
the available funds, in line with the contractuallyagreed
order of priority, for the repayment of the
principal on the various classes of Trevi securities and
for the payment of the relevant interest, the
repayment of expenses, the repayment of the liquidity
facilities used and the related interest. At the date of
the last collection, the shortfall of liabilities not
covered by available resources are determined. The
negative balance is discounted on the basis of market
yield curve at the date of valuation. The amount thus
obtained, net of writedowns of the principal already
carried out (as well as the value of the zero-coupon
bonds held to cover Class D securities valued at
market rates), determines the value of any further
writedowns of securities to be made in the period.
This methodology uses market parameters to
measure the total loss of each of the three Trevi
Finance operations.
In the light of the application of IAS/IFRS, it was
deemed appropriate, in relation to the methodology
used hitherto, to make valuations not only of the total
shortfall for each securitization (and the successive
allocation of the shortfall to individual securities), but also
of the estimated repayment capacity (with a view to
determining the maximum recoverable amount) relating
to each class of securities held by Capitalia.
To this end, without departing from the procedures
mentioned above for the remodulation of the cash flows
and the utilization of available funds in accordance with
the contractually-agreed order of priority, the securities
are valued by:
the quantification of the amounts payable in respect
of principal and interest (on the basis of maximum
recoverable amount) of the securities themselves - as
determined from the valuation model;
the subsequent discounting of the amounts
themselves at the valuation date using market rates.
Amortized cost was determined at the date of
valuation on the basis of the original rates (the expected
internal rate of return for each security at the moment the
security was added to the portfolio).
For the three Trevi operations, Capitalia’s income
statement for 2006 recognizes net writebacks of AFS
securities in the amount of €5.7 million and writedowns
of other financial transactions of €46.6 million.
* * *
At 31 December 2006, Capitalia S.p.A.’s portfolio
included €455.4 million in securities deriving from
securitization operations carried out by third parties, as
shown in the table below:

CAPITALIA
NOTES TO THE FINANCIAL STATEMENTS
Issuer Type of Originator of Quality of Book
(amounts in euros) security the securitization underlying assets value
Islandf2-ICR7 S.p.A. Senior Banco di Sicilia bad debts 21,022
Islandf2-ICR7 S.p.A. Mezzanine Banco di Sicilia bad debts 152,185
Islandf2-ICR7 S.p.A. Mezzanine Banco di Sicilia bad debts 29,833,469
Heliconus s.r.l. Senior FinecoBank performing loans-mortgage loans 15,120,148
F-E Personal loans Mezzanine FinecoBank performing loans-loans backed by salary 1,014,314
Scic Senior Minstries of Productive
Activities and University research receivables-public entities 23,187,074
Vela lease srl Senior Locafit S.p.A. performing loans-leasing receivables 100,244
NPF VI Senior US companies performing loans 83,705
Stanfield CLO Ltd Senior US companies performing loans 37,965
Scip Senior Italian public entities public property 21,698,389
Scip Mezzanine Italian public entities public property 7,732,084
Credico Funding 2 Senior Banche Credito Coop cbo securitization bank bonds 30,088
Pharma Finance srl Senior Comifin S.p.A. performing loans - leasing
and loans to pharmacies 54,158
Intesa BCI Sec N P Senior Banca Intesa performing loans-mortgage loans 16,403
Asset backed european Senior US companies performing loans 504,911
Cordusio Rmbs srl Senior Unicredito Banca S.p.A. performing loans-mortgage loans 200,032
PMI 2 Finance srl Senior Unicredit Banca d’Impresa performing loans - real estate loans 1,265,684
SCCI 08 Senior INPS INPS receivables 12,703,135
SCCI 08 Senior INPS INPS receivables 106,383,832
SCCI 09 Senior INPS INPS receivables 61,998,755
SCCI 10 Senior INPS INPS receivables 106,043,906
SCCI 11 Senior INPS INPS receivables 67,241,198
Total 455,422,701
COLLATERALIZED BOND OBLIGATION
In November 1999 the Bank carried out a
collateralized bond obligation (CBO) operation, which
consisted in the assignment of €360.3 million in
securities held in its own portfolio to Caesar Finance S.A.,
a Luxembourg special purpose vehicle. The vehicle
issued senior Class A and junior Class B notes amounting
to €360.3 million, whose characteristics are reported
below:

202 203
CAESAR FINANCE
TYPE OF SECURITY Issue Maturity Characteristics of issue Nominal value
value
of outstanding securities
(amounts in euros) al 31.12.2006 (*)
CLASS A (SENIOR) 270,000,000 15-11-2018 euribor 3m + 43 b.p. 17,911,800
CLASS B (JUNIOR) 90,329,000 15-11-2018 euribor 3m + 25 b.p. 90,329,000
Total 360,329,000 108,240,800
(*) The figures for the senior A security are at 15 February 2007, after the payment date.
At 31 December the Bank’s portfolio included €78 million in Caesar Finance securities, as follows:
Portfolio Nominal value Book value
Class A senior HFT 1,389,002 1,389,002
Class B junior AFS 90,329,000 76,590,545
Total 77,979,547
The residual value of securities held by the vehicle
amounted to €94.3 million at 31 December 2006.
In May 2000, the Bank carried out a second CBO
operation, which consisted in the assignment of €500
million in securities to Caesar Finance 2000 S.A., a
Luxembourg special purpose vehicle. The vehicle issued
senior Class A and junior Class B notes amounting to
€500 million, whose characteristics are reported below.
CAESAR FINANCE 2000
TYPE OF SECURITY Issue Maturity Characteristics of issue Nominal value
value
of outstanding securities
(amounts in euros) al 31.12.2006 (*)
CLASS A (SENIOR) 410,000,000 2-3-2010 euribor 3m + 40 b.p. –
CLASS B (MEZZANINE) 39,000,000 2-3-2010 euribor 3m + 85 b.p. 38,376,000
CLASS C (JUNIOR) 51,000,000 2-3-2010 euribor 3m + 150 b.p. 51,000,000
Total 500,000,000 89,376,000
(*) The Senior A security hs been repaid in full; The figures for the B security are at 2 March 2007, after the payment date.
At 31 December 2006 the €16.1 million of Caesar Finance 2000 securities in the bank’s portfolio were divided as
follows
Portfolio Nominal value Book value
Class B mezzanine HFT 5,800,000 5,723,829
Class C junior HFT 46,000,000 10,400,600
Total 16,124,429
The value of the securities remaining in the portfolio of the vehicle came to €58.4 million at 31 December 2006.

CAPITALIA
NOTES TO THE FINANCIAL STATEMENTS
Quantitative disclosures
C.1.1 EXPOSURES IN RESPECT OF SECURITIZATIONS BY QUALITY OF SECURITIZED ASSETS
A. With own underlying assets:
Cash exposures
Senior Mezzanine Junior
Gross Net Gross Net Gross Net
exposure exposure exposure exposure exposure exposure
a) impaired – – 1,263,103 1,263,103 588,228 588,228
b) other 1,389 1,389 120,898 120,898 86,991 86,991
B, With third-party underlying assets:
a) impaired 21 21 118,687 118,687 43,293 43,293
b) other 416,670 416,670 8,746 8,746 – –
(*) Available margins.
C.1.2 EXPOSURES IN RESPECT OF MAIN OWN SECURITIZATIONS BY TYPE OF SECURITIZED ASSETS AND TYPE OF EXPOSURE
Cash exposures
Senior Mezzanine Junior
Book Writedowns/ Book Writedowns/ Book Writedowns/
value writebacks value writebacks value writebacks
A. Fully derecognized
Trevi Finance SpA/ bad debts – – 465,673 – 160,106 –
Trevi Finance 2 SpA/ bad debts – – 737,296 – 247,616 –
Trevi Finance 3 Srl/ bad debts – – 60,134 – 180,506 –
Caesar Finance S.A./ securities 1,389 – – – 76,590 –
Caesar Finance 2000/ securities – – 5,724 – 10,401 –
Entasi srl / securities – – 115,174 – – –
(*) Available margins.

204 205
Guarantees issued Credit lines (*)
Senior Mezzanine Junior Senior Mezzanine Junior
Gross Net Gross Net Gross Net Gross Net Gross Net Gross Net
exposure exposure exposure exposure exposure exposure exposure exposure exposure exposure exposure exposure
– – 485,413 267,609 – – – – 551,594 551,594 – –
– – – – – – – – – – – –
– – 38,360 20,014 – – – – 38,868 38,868 – –
– – 511,420 511,420 – – – – – – – –
Guarantees issued Credit lines (*)
Senior Mezzanine Junior Senior Mezzanine Junior
Book Writedowns/ Book Writedowns/ Book Writedowns/ Book Writedowns/ Book Writedowns/ Book Writedowns/
value writebacks value writebacks value writebacks value writebacks value writebacks value writebacks
– – 30,000 – – – – – 140,143 – – –
– – – – – – – – 144,165 – – –
– – 237,609 (43,004) – – – – 267,286 – – –
– – – – – – – – – – – –
– – – – – – – – – – – –
– – – – – – – – – – – –

CAPITALIA
NOTES TO THE FINANCIAL STATEMENTS
C.1.3 EXPOSURES IN RESPECT OF MAIN THIRD-PARTY SECURITIZATIONS BY TYPE OF
ECURITIZED ASSETS AND TYPE OF EXPOSURE
Cash exposures
Senior Mezzanine Junior
Book Writedowns/ Book Writedowns/ Book Writedowns/
value writebacks value writebacks value writebacks
Trevi Finance 2 SpA/bad debts – – 83,636 – 28,089 –
Trevi Finance 3 Srl/ bad debts – – 5,065 – 15,204 –
Island Finance 2 ICR7/ bad debts 21 – 29,986 – – –
Heliconus / loans 15,120 – – – – –
SCIC srl /research receivables
public entities 23,187 – – – – –
NPF VI / other 84 – – – – –
Stanfield clo ltd./ other 38 – – – – –
Credito Funding 2 srl/ other 30 – – – – –
SCIP srl / property 21,699 – 7,732 – – –
Pharma Finance srl/leasing and loans 54 – – – – –
Intesa BCI SEC NPL S/loans 16 – – – – –
Asset Backed Europea/other assets 505 – – – – –
Cordusio rmbs srl/loans 200 – – – – –
Vela Lease srl/leasing 100 – – – – –
PMI 2 FINANCE srl/loans to SMEs 1,266 – – – – –
SCCI08/INPS receivables 12,703 – – – – –
SCCI08/INPS receivables 106,384 – – – – –
SCCI09/INPS receivables 61,999 – – – – –
SCCI10/INPS receivables 106,044 – – – – –
SCCI11/INPS receivables 67,241 – – – – –
F-E Gold srl/leasing – – – – – –
F-E Personal loans/loans
backed by salaries – – 1,014 – – –
F-E Mortgages/loans – – – – – –
F-E Green/leasing – – – – – –
F-E Blue/leasing – – – – – –
Velites/loans – – – – – –
Garda 1/loans – – – – – –

206 207
Guarantees issued
Credit lines
Senior Mezzanine Junior Senior Mezzanine Junior
Book Writedowns/ Book Writedowns/ Book Writedowns/ Book Writedowns/ Book Writedowns/ Book Writedowns/
value writebacks value writebacks value writebacks value writebacks value writebacks value writebacks
– – – – – – – – 16,354 – – –
– – 20,014 (3,622) – – – – 22,514 – – –
– – – – – – – – – – – –
– – 22,220 – – – – – – – – –
– – – – – – – – – – – –
– – – – – – – – – – – –
– – – – – – – – – – – –
– – – – – – – – – – – –
– – – – – – – – – – – –
– – – – – – – – – – – –
– – – – – – – – – – – –
– – – – – – – – – – – –
– – – – – – – – – – – –
– – – – – – – – – – – –
– – – – – – – – – – – –
– – – – – – – – – – – –
– – – – – – – – – – – –
– – – – – – – – – – – –
– – – – – – – – – – – –
– – – – – – – – – – – –
– – 210,000 – – – – – – – – –
– – 55,000 – – – – – – – – –
– – 115,000 – – – – – – – – –
– – 58,500 – – – – – – – – –
– – 30,700 – – – – – – – – –
– – 5,000 – – – – – – – – –
– – 15,000 – – – – – – – – –

CAPITALIA
NOTES TO THE FINANCIAL STATEMENTS
C.1.4 EXPOSURES IN RESPECT OF SECURITIZATIONS BY PORTFOLIO OF FINANCIAL ASSETS AND TYPE
Financial Financial Available- Held-to- Loans Total 2006 Total 2005
assets held assets for-sale maturity
for trading at fair value financial financial
assets
assets
1. Cash exposure 427,852 – 1,672,594 – 547,580 2,648,026 2,490,500
senior 402,922 – 15,158 – – 418,080 160,569
mezzanine 14,529 – 949,325 – 547,580 1,511,434 1,568,055
junior 10,401 – 708,111 – – 718,512 761,876
2. Off-balance-sheet
exposure – – – – – 1,389,505 875,765
senior – – – – – – –
mezzanine – – – – – 1,389,505 875,765
junior – – – – – – –

208 209
C.1.5 TOTAL AMOUNT OF SECURITIZED ASSETS UNDERLYING JUNIOR SECURITIES OR OTHER FORMS
OF CREDIT SUPPORT
traditional securitizations
synthetic securitizations
A. Own underlying assets 2,150,999 –
A.1 Fully derecognized 2,150,999 –
1 Bad debts 2,004,118 x
2 Substandard loans – x
3 Restructured positions – x
4 Past due positions –
5 Other assets 146,881 x
A.2 Partially derecognized – –
1 Bad debts – x
2 Substandard loans – x
3 Restructured positions – x
4 Past due positions – x
5 Other assets – x
A.3 Not derecognized – –
1 Bad debts – –
2 Substandard loans – –
3 Restructured positions – –
4 Past due positions – –
5 Other assets – –
B. Third-party underlying assets 130,423 –
B.1 Bad debts 130,423 –
B.2 Substandard loans – –
B.3 Restructured positions – –
B.4 Past due positions – –
B.5 Other assets – –
C.1.6 HOLDINGS IN SPECIAL PURPOSE VEHICLES
Name Registered office % holding
Trevi Finance S.p.A. Conegliano (Treviso) 60,00
Trevi Finance n. 2 S.p.A. Conegliano (Treviso) 60,00
Trevi Finance n. 3 Srl Conegliano (Treviso) 60,00
Entasi Srl Rome 100,00
Eurofinance 2000 Srl Rome 98,97

CAPITALIA
NOTES TO THE FINANCIAL STATEMENTS
C.1.7 SERVICER ACTIVITIES - COLLECTIONS ON SECURITIZED ASSETS AND REDEMPTION
OF SECURITIES ISSUED BY VEHICLE
Securitized assets (end-period figure)
Collections in the year
Vehicle Impaired Performing Impaired Performing
Trevi Finance S.p.A. 661,275 – 137,391 –
Trevi Finance 2 S.p.A. 660,057 – 207,561 –
Trevi Finance 3 S.r.l. 813,209 – 163,241 –
C.2 ASSIGNMENTS
C.2.1 FINANCIAL ASSETS ASSIGNED BUT NOT DERECOGNIZED
Financial assets Financial assets Financial assets
held for trading designated at fair value available for sale
A B C A B C A B C
a. Non-derivative assets 1,126,396 – – – – – 1,006,551 – –
1. Debt securities 1,126,396 – – – – – 1,006,551 – –
2. Equity securities – – – – – – – – –
3. Units in collective
investment undertakings – – – – – – – – –
4. Loans – – – – – – – – –
5. Impaired assets – – – – – – – – –
b. Derivatives – – – X X X X X X
Total 1,126,396 – – – – – 1,006,551 – –
Total 2005 4,699,872 – – – – – 463,029 – –
A = Assigned financial assets fully recognized (book value);
B = Assigned financial assets partially recognized (book value);
C = Assigned financial assets partially recognized (full value).

210 211
% of securities redeemed (end-period figure)
Senior Mezzanine Junior
impaired assets Performing assets impaired assets Performing assets impaired assets Performing assets
100% 0% 17,3% 0% 0% 0%
100% 0% 32,1% 0% 0% 0%
76,6% 0% 0,0% 0% 0% 0%
Held-to-maturity Loans to banks Loans to customers
financial assets Total Total
A B C A B C A B C 2006 2005
446,674 – – 19,539 – – – – – 2,599,160 5,399,399
446,674 – – 19,539 – – – – – 2,599,160 5,399,399
X X X X X X X X X – –
X X X X X X X X X – –
– – – – – – – – – – –
– – – – – – – – – – –
X X X X X X X X X – –
446,674 – – 19,539 – – – – – 2,599,160 5,399,399
236,498 – – – – – – – – 5,399,399

CAPITALIA
NOTES TO THE FINANCIAL STATEMENTS
C.2.2 FINANCIAL LIABILITIES IN RESPECT OF FINANCIAL ASSETS ASSIGNED BUT NOT DERECOGNIZED
Financial Financial assets Financial assets Financial assets Loans Loans Total
assets held designated available held to to banks to customers
for trading at fair value for sale maturity
1. Due to customers 17,241 – – – – – 17,241
a) in respect of assets
fully recognized 17,241 – – – – – 17,241
b) in respect of assets
partially recognized –
2. Due to banks 1,109,155 – 1,006,551 446,674 19,539 – 2,581,919
a) in respect of assets
fully recognized 1,109,155 – 1,006,551 446,674 19,539 – 2,581,919
b) in respect of assets
partially recognized – – – – – –
Total 1,126,396 – 1,006,551 446,674 19,539 – 2,599,160

212 213
D. MODELS FOR MEASURING CREDIT RISK
D.1. CREDIT RISK MEASUREMENT – TRADING PORTFOLIO
To measure and monitor the risk implicit in the
management of the portfolio of assets held for trading,
Capitalia has developed a portfolio credit risk engine
with which it can gauge economic capital absorbed
(Credit VaR). Default probabilities are taken from external
sources.
The exposure and loss indicators produced by the
model (present value, actual exposure, total exposure,
mean loss, annual credit VaR, marginal VaR, marginal VaR %)
are described in detail in the relevant section of the notes
to the financial statements.
At 31 December 2006, the Credit VaR of the trading
portfolio amounted to around €20 million on an annual
basis, equal to about 0.85% of the average exposure,
sharply down with respect to the value registered at 31
December 2005 (around €70 million on an annual
basis).
D.2. CREDIT RISK MEASUREMENT – BANKING BOOK
The Group’s portfolio model for measuring credit risk
considers only performing loans: since the customer
segment of Capitalia S.p.A.’s banking book is primarily
composed of bad debts, the use of the model is not
considered significant.
Section 2 – MARKET RISKS
Finance activities are largely centralized at the Parent
Company. One of the main objectives of these activities,
as described in the relevant section of the notes to the
consolidated financial statements, is the management of
its own portfolio, trading in financial instruments and
value creation through the structuring, pricing and
management of products for the Group’s customers.
The main instruments used to manage the trading
book are securities (equities and bonds) and derivatives
on interest rates, indices and individual underlyings and
exchange rates.
In accordance with the guidelines on risk, the
management of Capitalia’s proprietary securities
portfolio takes an integrated approach, not only on the
basis of careful analysis of the risks associated with
individual strategies but also from an overall portfolio
standpoint: special attention is devoted to the correlation
between the markets in which operations are
concentrated (the government and corporate bond
markets and equity markets). From an operational point
of view, risk is contained by optimizing the risk/return
profile of directional positions.
In line with the current structure of trading limits,
market risks are measured and monitored for the entire
trading book handled by the Finance Area, which
includes positions in the proprietary trading book and
those taken on as part of intermediation activity.
Market risks are measured daily using VaR
methodologies. The computational method uses Monte
Carlo simulation, in which the maximum potential loss for
each risk factor and the aggregate is determined (VaR) for
a holding period of one year and a 99% confidence level.
In order to assess the impact of extreme events, VaR has
been supplemented by expected shortfall, which assesses
losses in the case of events whose probability of
occurrence is less than 1%. The performance of the model
is evaluated by means of regular back-testing. The impact
of extreme movements in risk factors on the Bank’s
portfolios is simulated by means of daily stress-testing.
As part of the measurement and monitoring of risks
carried out on the Finance Area’s activity, risk indicators

CAPITALIA
NOTES TO THE FINANCIAL STATEMENTS
are calculated and reported to the heads of the various
units concerned on a daily basis and used to mange risks.
Since 2003, operational ceilings for VaR have been used
for the Finance Area’s trading book. Compliance with the
limits is monitored daily.
The net VaR of Capitalia’s trading book at 31
December 2006 amounted to around €6.5 million, down
with respect to 31 December 2005 (€9 million). The
average daily VaR for 2006 was about €10 million. The
following chart shows developments in VaR in 2006:
DEVELOPMENTS IN NET VAR FOR THE TRADING BOOK
20
15
10
5
–
Dec-05 Jan-06 Feb-06 Mar-06 Apr-06 May-06 Jun-06 Jul-06 Aug-06 Sep-06 Oct-06 Nov-06 Dec-06
The risk factor making the largest contribution to VaR
is the performance of equity markets.
The following table summarizes VaR in 2006 for
Capitalia’s trading portfolio:
HOLDING PERIOD 1 DAY, CONFIDENCE LEVEL 99% (MILLIONS OF EUROS)
VaR Min VaR Max Average VaR
Held for trading portfolio 6.4 15 10
(on 30-11-2006) on 13-03-2006)
To assess the impact of extreme movements of risk
factors, the portfolio is subjected to daily revaluation
based partly on historical events (Russia 1998, USA 1987,
11 September 2001) and partly on sensitivity scenarios.
More specifically, with reference to the historical
scenarios, at 31 December 2006 a crisis such as that in
the US markets in 1987 and 1998 or at the time of the
attacks on the World Trade Center would have produced
losses of €55 million, €44 million and €40 million
respectively. Again with reference to 31 December 2006,
the most significant sensitivity scenarios regard rapid and
substantial changes in equity risk factors. Specifically, a
10% variation in the value of the equities to which the
portfolio is exposed and no corresponding change in the
indices used as hedges would be accompanied by a loss
of about €49 million. As regards sensitivity scenarios
involving interest rate risk, in the most significant scenario

214 215
at 31 December 2006 a parallel negative shift of 100
basis points in all the swap nodes of the euro yield curve
at maturities beyond one year would have resulted in a
loss of about €36 million.
2.1 INTEREST RATE RISK – SUPERVISORY TRADING
PORTFOLIO
An interest rate VaR indicator is generated daily to
measure the maximum potential loss that could be
caused by adverse changes in the yield curve and the
related volatility. In order to determine this indicator, in
line with the Finance Area’s current operations, the yield
curves where the portfolio’s exposure is concentrated
have been identified.
Qualitative disclosures
A. OVERVIEW
Investment guidelines are primarily established on the
basis of assessments of macroeconomic variables or
fundamentals. This is reflected in risk positions that take
account of:
the steepening or flattening of the yield curve in
relation to the various phases of the business cycle and
the monetary policy cycle;
the widening or narrowing of interest rate spreads
between countries in relation to non-synchronous phases
of the business cycle;
the changes in inflation expectations.
Risk management is optimized through the use of
derivatives.
Interest rate risk is subject to specific operational
limits, which are monitored on a daily basis.
B. MANAGEMENT AND MEASUREMENT OF INTEREST
RATE RISK
As noted, Capitalia measures and monitors the
market risks taken on in the management of the trading
portfolio by applying an internal VaR model.
Using market prices for the curve notes, the volatility
and correlation parameters for each risk factor are
estimated. The process then generates scenarios on the
basis of the selected model (for example, the form of the
distribution of risk factors). In particular, it is assumed that
the various risk factors have a normal Gaussian distribution
and, using this assumption, new values for each risk factor
are generated for each of the scenarios that are generated.
For each scenario, the values of the financial
instruments in the portfolio are adjusted using specific
pricing formulas, which produces the frequency distribution
of yields. The value of the risk indicator is generated by
ordering the values thus obtained from worst to best and
truncating the distribution at the desired percentile.
The impact of extreme movements in risk factors is
assessed by using sensitivity scenarios that on a daily
basis estimate the effect of rapid and substantial changes
in interest rate risk factors monitored within the risk
management system developed by the Bank.
Quantitative disclosures
1 SUPERVISORY TRADING BOOK: DISTRIBUTION BY
RESIDUAL MATURITY (REPRICING DATE) OF ON-BALANCE-
SHEET FINANCIAL ASSETS AND LIABILITIES AND
FINANCIAL DERIVATIVES
As permitted by Bank of Italy Circular 262 of 22
December 2005, this table is not prepared as an analysis
of sensitivity to interest rate risk is provided in point 2
below.

CAPITALIA
NOTES TO THE FINANCIAL STATEMENTS
2. SUPERVISORY TRADING BOOK: INTERNAL MODELS AND OTHER SENSITIVITY ANALYSIS METHODOLOGIES
In 2006 the average daily Interest Rate VaR of the trading book was about €1 million.
The following table summarizes Interest Rate VaR in 2006 for Capitalia’s trading book:
HOLDING PERIOD 1 DAY, CONFIDENCE LEVEL 99% (MILLIONS OF EUROS)
IR VaR Min IR VaR Max Average IR VaR
Held for trading portfolio 0.3 2 1
(on 29-9-2006) (on 10-01-2006)
The following chart shows developments in Interest Rate VaR in 2006 for the trading book.
DEVELOPMENTS IN INTEREST RATE VAR
6.00
5.00
4.00
3.00
2.00
1.00
–
Jan-06 Feb-06 Mar-06 Apr-06 May-06 Jun-06 Jul-06 Aug-06 Sep-06 Oct-06 Nov-06 Dec-06
2.2 INTEREST RATE RISK – BANKING BOOK
Qualitative disclosures
For a description of the model, please see the notes
to the consolidated financial statements.
A. OVERVIEW, MANAGEMENT AND MEASUREMENT OF
INTEREST RATE RISK
To measure and monitor the interest rate risk at both
an individual and consolidated level, Capitalia, working in
cooperation with the main companies of the Group,
developed an ALM system that can deliver monthly
assessments of the impact that changes in the yield curve
have on the entire balance sheet, in terms of the value of
capital and net interest income.
B. FAIR VALUE HEDGES
In compliance with IASs/IFRSs, fair value hedges are
used to cover interest rate risk on specific exposures.
In particular, at 31 December 2006 the Bank held
interest rate swaps and cross currency interest rate
swaps as hedges for individual bond issues in euros and
other currencies, respectively. A specific hedge using
another interest rate swap is also in place for a loan
position.

216 217
The hedges therefore refer to the risk of changes in
fair value caused by changes in the yield curve for eurodenominated
bonds and changes in interest and
exchange rates for bonds in other currencies.
Quantitative disclosures
1 BANKING BOOK: DISTRIBUTION BY RESIDUAL
MATURITY (REPRICING DATE) OF FINANCIAL ASSETS
AND LIABILITIES S
C. CASH FLOW HEDGES
There are currently no cash flow hedges in place.
As permitted by Bank of Italy Circular 262 of 22
December 2005, this table is not prepared as an analysis of
sensitivity to interest rate risk is provided in point 2 below.
2. BANKING BOOK: INTERNAL MODELS AND OTHER SENSITIVITY ANALYSIS METHODOLOGIES
The following table reports the outcome of the analyses performed for 31 December 2006.
INTEREST RATE RISK INDICATORS
Impact Impact on net IR VaR EaR VaR
Values at 31 December 2006 on value interest income
in millions of euros (Shock + 1%) (Shock + 1%)
Capitalia S.p.A. 103 –21 30 13
An analysis of the sensitivity of net interest income to
a shift of 100 basis points in the euro yield curve shows
an impact of -€21 million at 31 December 2006.
Assuming stochastic variations in the yield curve EaR
(earnings at risk) came to +13 million.
2.3 PRICE RISK – SUPERVISORY TRADING PORTFOLIO
Qualitative disclosures
A. OVERVIEW
An analysis of the sensitivity of shareholders’ equity to
a shift of 100 basis points in the euro interest rate curve
shows an impact of €103 million at 31 December 2006,
equal to 0.98% of the individual shareholders’ equity of
Capitalia.
The interest rate VaR for Capitalia amounts to around
€30 million, equal to around 0.28% of shareholders’
equity.
The structure of the equity component of the trading
portfolio changed over the course of 2006 in relation to
developments in the management of a number of
strategic positions.
In order to optimize and limit the risk profile, the
sectoral allocation of the portfolio remained substantially
diversified on the basis of the composition of the main
benchmark indices.

CAPITALIA
NOTES TO THE FINANCIAL STATEMENTS
In general, primarily long cash positions or options on
individual stocks are covered by short positions on
indices.
B. MANAGEMENT AND MEASUREMENT OF PRICE RISK
As noted above, a VaR model developed by the Bank
is used to measure and monitor the market risks taken on
in the management of the Bank’s trading portfolio.
An equity VaR is generated daily to measure the
maximum potential loss that could result from adverse
shifts in stock prices/indices and the related volatility. In
order to determine this indicator, in line with the Finance
Area’s current operations, the yield curves where the
portfolio’s exposure is concentrated have been
identified.
Using market prices for the risk factors, the
volatility and correlation parameters are estimated.
The process then generates scenarios on the basis of
the selected model (for example, the form of the
distribution of risk factors). In particular, it is assumed
that the various risk factors have a normal Gaussian
distribution and, using this assumption, new values for
each risk factor are generated for each of the scenarios
that are generated.
For each scenario, the values of the financial
instruments in the portfolio are adjusted using specific
pricing formulas, which produces the frequency
distribution of yields. The value of the risk indicator is
generated by ordering the values thus obtained from
worst to best and truncating the distribution at the
desired percentile.
The impact of extreme movements in risk factors is
assessed by using sensitivity scenarios that on a daily
basis estimate the effect of rapid and substantial changes
in interest rate risk factors monitored within the risk
management system developed by the Bank.

218 219
Quantitative disclosures
1. SUPERVISORY TRADING BOOK: CASH EXPOSURES IN EQUITY INSTRUMENTS AND UNITS OF COLLECTIVE
INVESTMENT UNDERTAKINGS
Book value
Listed
Unlisted
A. Equity securities 820,956 –
A.1 Shares 820,956 –
A.2 Innovative capital instruments – –
A.3 Other equities – –
B. Units in collective investment undertakings 67,525 614,593
B.1 Italian 1,437 614,593
– harmonized open – 579,219
– non harmonized open – –
– closed 1,437 –
– restricted – –
– speculative – 35,374
B.2 Other EU 66,088 –
– harmonized 66,088 –
– non harmonized open – –
– non harmonized closed – –
B.3 Non–EU – –
– open – –
– closed – –
Total 888,481 614,593

CAPITALIA
NOTES TO THE FINANCIAL STATEMENTS
2. SUPERVISORY TRADING BOOK: DISTRIBUTION OF
EXPOSURES IN EQUITIES AND EQUITY INDICES BY MAIN
COUNTRY OF LISTING
As permitted by Bank of Italy Circular 262 of 22
December 2005, this table is not prepared as an analysis
of sensitivity to interest rate risk is provided in point 3
below.
3. SUPERVISORY TRADING BOOK: INTERNAL
MODELS AND OTHER SENSITIVITY ANALYSIS
METHODOLOGIES
The average daily Equity VaR of the supervisory trading
book at 31 December 2006 was about €9.5 million.
The following table summarizes Equity VaR in 2006 for
Capitalia’s trading book:
HOLDING PERIOD 1 DAY, CONFIDENCE LEVEL 99% (MILLIONS OF EUROS)
EQ VaR Min EQ VaR Max Average EQ VaR
Held for trading portfolio 6.1 15 9.5
(on 05-12-2006) (on 10-03-2006)
The following chart shows developments in Equity VaR in 2006 for the trading book:
DEVELOPMENTS IN EQUITY VAR
20,000,000
15,000,000
10,000,000
5,000,000
0
Jan-06 Feb-06 Mar-06 Apr-06 May-06 Jun-06 Jul-06 Aug-06 Sep-06 Oct-06 Nov-06 Dec-06

220 221
2.4 PRICE RISK – BANKING BOOK
Qualitative disclosures
A. OVERVIEW, MANAGEMENT AND MEASUREMENT OF
PRICE RISK
As described in the notes to the consolidated
financial statements, price risk for the Group’s banking
portfolio is mainly concentrated within the available-forsale
portfolio.
The measurement and monitoring of the risk
absorbed by the portfolio is done using the same
instruments that were developed for the trading
portfolio.
The resulting VaR and sensitivity measurements are
periodically reported to Capitalia’s Risk and ALM
Committee.
B. PRICE RISK HEDGES
In 2006, no hedges were made against price risk in
the banking book.
Quantitative disclosures
1. BANKING BOOK: CASH EXPOSURES IN EQUITY SECURITIES AND UNITS OF COLLECTIVE INVESTMENT UNDERTAKING
Book value
Listed
Unlisted
A. Equity securities 421,922 12,539,357
A.1 Shares 421,922 12,498,944
A.2 Innovative capital instruments – 625
A.3 Other equities – 39,788
B. Units in collective investment undertakings 19,048 28,988
B.1 Italian 19,048 28,988
– harmonized open – –
– non harmonized open – –
– closed 19,048 13,758
– restricted – –
– speculative – 15,230
B.2 Other EU – –
– harmonized – –
– non harmonized open – –
– non harmonized closed – –
B.2 Non-EU – –
– open – –
– closed – –
Total 440,970 12,568,345

CAPITALIA
NOTES TO THE FINANCIAL STATEMENTS
2. BANKING BOOK: INTERNAL MODELS AND OTHER
SENSITIVITY ANALYSIS METHODOLOGIES
At 31 December 2006, the daily Equity VaR of the
available-for-sale portfolio was about €10 million.
Exchange rate hedging activities are conducted with
a view to ensuring that the positions at the Group level
essentially balance out.
Exchange rate risk is subject to specific operational
limits, which are monitored on a daily basis.
2.5 EXCHANGE RATE RISK
Qualitative disclosures
A. OVERVIEW, MANAGEMENT AND MEASUREMENT OF
EXCHANGE RATE RISK
The Parent Company’s Market Making Unit exercises
centralized control over exchange rate risk management
for the entire Group with real time visibility of all the
exchange rate risk positions of Group banks. It can
respond to overall imbalances by managing exchange
rate risk through appropriate hedging activities in
international markets.
In order to measure and monitor the exchange rate
risk profile at the individual and consolidated levels,
Capitalia Holding developed an internal measurement
model that enables monthly calculation of the impact of
changes in exchange rates on the entire balance sheet,
expressed in terms of changes the economic value of
capital. An estimate is made of the impact on balance
sheet items using the FX VaR obtained with a Monte
Carlo method with 1-month time horizon. The project
was completed for the positions of Capitalia S.p.A. Banca
di Roma (except for foreign branches), Banco di Sicilia,
Bipop Carire, FinecoBank, Fineco Finance and MCC.
B. EXCHANGE RATE HEDGES
The Finance Area carries out market-making activities
not only for exchange rates (spot and forward) but also
for exchange rate derivatives on behalf of Group
customers. The level of risk associated with these
operations was kept very low through 2006.
Hedging of exchange rate risks is carried out
specifically, in compliance with the IAS/IFRS rules
governing fair value hedges. At 31 December 2006, the
Parent Company had foreign currency swaps hedging
individual foreign currency deposits (USD).

222 223
Quantitative disclosures
1. DISTRIBUTION BY CURRENCY OF ASSETS AND LIABILITIES AND DERIVATIVES
US dollar Pound sterling Yen Canadian dollar Swiss francs Other
A. Financial assets 1,973,231 181,751 134,166 17,902 176,057 191,141
A.1 Debt securities 1.914 4 – – 13 16
A.2 Equity securities 56,912 91 – – – 139,002
A.3 Loans to banks 1,914,405 181,656 134,166 17,902 176,044 52,123
A.4 Loans to customers – – – – – –
A.5 Other financial
assets – – – – – –
B. Other assets 943 463 – 8 – 396
C. Financial liabilities 3,178,554 200,598 96,481 19,218 – 106,981
C.1 Due to banks 2,901,520 141,035 96,481 19,218 159,711 51,914
C.2 Due to customers 254 – – – 799
C.3 Debt securities 276,780 59,563 – – – 54,268
D. Other liabilities 23,536 1,149 31 41 320 367
E. Financial derivatives
– Options 554,598 81,943 14,707 – 23 36,698
+ long positions 151,530 8,880 659 – – 18,349
+ short positions 403,068 73,063 14,048 – 23 18,349
– Other derivatives 24,469,492 502,437 505,195 43,738 67,366 118,849
+ long positions 12,982,752 261,750 240,763 28,116 28,656 86,636
+ short positions 11,486,740 240,687 264,432 15,622 38,710 32,213
Total assets 15,108,456 452,844 375,588 46,026 204,713 296,522
Total liabilities 15,091,898 515,497 374,992 34,881 198,764 157,910
Difference (+/– ) 16,558 (62,653) 596 11,145 5,949 138,612
2. INTERNAL MODELS AND OTHER SENSITIVITY ANALYSIS METHODOLOGIES
The exchange rate risk profile of Capitalia S.p.A. is limited. At 31 December 2006 the monthly FX VaR was about €7
million.

CAPITALIA
NOTES TO THE FINANCIAL STATEMENTS
2.6 DERIVATIVES
A. FINANCIAL DERIVATIVES
A.1 SUPERVISORY TRADING BOOK: END-PERIOD AND AVERAGE NOTIONAL AMOUNTS
Debt securities and interest rates
Equity securities and equity indices
Listed Unlisted Listed Unlisted
1. Forward rate agreement – 1,259,667 – –
2. Interest rate swaps – 209,433,461 – –
3. Domestic currency swaps – – – –
4. Currency IRS – – – –
5. Basis swap – 3,035,268 – –
6. Equity index swaps – – – –
7. Real index swaps – – – –
8. Futures 188,300 – 342,831 –
9. Cap options – 28,763,040 – –
– purchased – 11,986,398 – –
– issued – 16,776,642 – –
10. Floor options – 10,161,155 – –
– purchased – 3,407,952 – –
– issued – 6,753,203 – –
11. Other options – 1,965,222 1,597,770 31,815,029
– purchased – 1,068,534 1,086,822 15,782,755
– plain vanilla – 1,068,534 1,086,822 15,782,755
– exotic – – – –
– issued – 896,688 510,948 16,032,274
– plain vanilla – 896,688 510,948 16,032,274
– exotic – – – –
12. Forward contracts 2,293,461 4,226 3,448 –
– purchases 1,042,418 3,544 887 –
– sales 1,251,043 682 2,561 –
– foreign currency vs.
foreign currency – – – –
13. Other derivatives contracts – 1,105,865 – 875,998
Total 2,481,761 255,727,904 1,944,049 32,691,027
Average amounts 2,665,603 226,613,568 2,491,811 26,696,645
The trading book includes options embedded in bonds as they are treated for management purposes as trading derivatives.
In 2005 these options were classified as other derivatives banking book (tab. A.2.2).

224 225
Exchange rates and gold Other assets Total 2006 Total 2005
Listed Unlisted Listed Unlisted Listed Unlisted Listed Unlisted
– – – – – 1,259,667 – 1,200,000
– – – – – 209,433,461 – 126,740,144
– 121,043 – – – 121,043 – 128,557
– 123,522 – – – 123,522 – 92,931
– – – – – 3,035,268 – 3,155,487
– – – – – – – –
– – – – – – – –
– – – – 531,131 – 1,018,333 –
– – – – – 28,763,040 – 21,864,315
– – – – – 11,986,398 – 11,233,478
– – – – – 16,776,642 – 10,630,837
– – – – – 10,161,155 – 9,355,268
– – – – – 3,407,952 – 4,500,503
– – – – – 6,753,203 – 4,854,765
– 1,570,220 – – 1,597,770 35,350,471 3,507,438 14,106,063
– 672,538 – – 1,086,822 17,523,827 2,770,374 7,383,941
– 672,538 – – 1,086,822 17,523,827 2,770,374 7,383,941
– – – – – – – –
– 897,682 – – 510,948 17,826,644 737,064 6,722,122
– 897,682 – – 510,948 17,826,644 737,064 6,722,122
– – – – – – – –
– 23,792,650 – – 2,296,909 23,796,876 1,465,571 14,256,232
– 11,731,866 – – 1,043,305 11,735,410 606,175 7,359,318
– 11,311,732 – – 1,253,604 11,312,414 859,396 6,649,705
– 749,052 – – – 749,052 – 247,209
– 15,000 – 149,667 – 2,146,530 – 339,000
– 25,622,435 – 149,667 4,425,810 314,191,033 5,991,342 191,237,997
– 21,770,869 – 197,000 5,157,414 275,278,082

CAPITALIA
NOTES TO THE FINANCIAL STATEMENTS
A.2 BANKING PORTFOLIO: END–PERIOD AND AVERAGE NOTIONAL AMOUNTS
A.2.1 HEDGING
Debt securities and interest rates
Equity securities and equity indices
Listed Unlisted Listed Unlisted
1. Forward rate agreement – – – –
2. Interest rate swaps – 4,031,484 – –
3. Domestic currency swaps – – – –
4. Currency IRS – – – –
5. Basis swaps – 1,568,940 – –
6. Equity index swaps – – – –
7. Real index swaps – – – –
8. Futures – – – –
9. Cap options – – – –
– purchased – – – –
– issued – – – –
10. Floor options – – – –
– purchased – – – –
– issued – – – –
11. Other options – – – –
– purchased – – – –
– plain vanilla – – – –
– exotic – – – –
– issued – – – –
– plain vanilla – – – –
– exotic – – – –
12.Forward contracts – – – –
– purchases – – – –
– sales – – – –
– foreign currency vs.
foreign currency – – – –
13.Other derivatives contracts – – – –
Total – 5,600,424 – –
Average amounts – 4,957,346 – –

226 227
Exchange rates and gold Other assets Total 2006 Total 2005
Listed Unlisted Listed Unlisted Listed Unlisted Listed Unlisted
– – – – – – – –
– – – – – 4,031,484 – 3,654,356
– – – – – – – –
– 96,424 – – – 96,424 – 96,424
– – – – – 1,568,940 – 1,048,071
– – – – – – – –
– – – – – – – –
– – – – – – – –
– – – – – – – –
– – – – – – – –
– – – – – – – –
– – – – – – – –
– – – – – – – –
– – – – – – – –
– – – – – – – –
– – – – – – – –
– – – – – – – –
– – – – – – – –
– – – – – – – –
– – – – – – – –
– – – – – – – –
– 1,191,911 – – – 1,191,911 – 35,820
– 1,191,911 – – – 1,191,911 – 35,820
– – – – – – – –
– – – – – – – –
– – – – – – – 100,000
– 1,288,335 – – – 6,888,759 – 4,934,671
– 791,528 – 25,000 – 5,773,874

CAPITALIA
NOTES TO THE FINANCIAL STATEMENTS
A.2.2 OTHER DERIVATIVES
Debt securities and interest rates
Equity securities and equity indices
Listed Unlisted Listed Unlisted
1. Forward rate agreements – – – –
2. Interest rate swaps – – – –
3. Domestic currency swaps – – – –
4. Currency IRS – – – –
5. Basis swaps – – – –
6. Equity index swaps – – – –
7. Real index swaps – – – –
8. Futures – – – –
9. Cap options – – – –
– purchased – – – –
– issued – – – –
10. Floor options – – – –
– purchased – – – –
– issued – – – –
11. Other options – – – –
– purchased – – – –
– plain vanilla – – – –
– exotic – – – –
– issued – – – –
– plain vanilla – – – –
– exotic – – – –
12. Forward contracts – – – –
– purchases – – – –
– sales – – – –
– foreign currency vs.
foreign currency – – – –
13. Other derivatives contracts – – – –
Total – – – –
Average amounts – – – –

228 229
Exchange rates and gold Other assets Total 2006 Total 2005
Listed Unlisted Listed Unlisted Listed Unlisted Listed Unlisted
– – – – – – – –
– – – – – – – –
– – – – – – – –
– – – – – – – –
– – – – – – – –
– – – – – – – –
– – – – – – – –
– – – – – – – –
– – – – – – – 3,693,050
– – – – – – – 329,380
– – – – – – – 3,363,670
– – – – – – – 113,774
– – – – – – – –
– – – – – – – 113,774
– – – – – – – 7,846,756
– – – – – – – 2,699,818
– – – – – – – 2,699,818
– – – – – – – –
– – – – – – – 5,146,938
– – – – – – – 5,146,938
– – – – – – – –
– – – – – – – –
– – – – – – – –
– – – – – – – –
– – – – – – – –
– – – – – – – –
– – – – – – – 11,653,580
– _ – – – –

CAPITALIA
NOTES TO THE FINANCIAL STATEMENTS
A.3 FINANCIAL DERIVATIVES: PURCHASE AND SALE OF UNDERLYINGS
Debt securities and interest rates
Equity securities and equity indices
Listed Unlisted Listed Unlisted
A. Supervisory trading book 2,481,761 252,692,635 1,944,049 32,691,028
1. Transactions with exchange
of principal 2,481,761 202,000 3,448 23,770,725
– purchases 1,102,618 192,624 887 12,106,845
– sales 1,379,143 9,376 2,561 11,663,880
– foreign currency vs.
foreign currency – – – –
2. Transactions without
exchange of principal – 252,490,635 1,940,601 8,920,303
– purchases – 127,763,556 427,735 4,626,618
– sales – 124,727,079 1,512,866 4,293,685
– foreign currency
vs. foreign currency – – – –
B. Banking book – 4,031,484 – –
B.1 Hedging – 4,031,484 – –
1. Transactions with
exchange of principal – – – –
– purchases – – – –
– sales – – – –
– foreign currency
vs. foreign currency – – – –
2. Transactions without
exchange of principal – 4,031,484 – –
– purchases – 3,485,773 – –
– sales – 545,711 – –
– foreign currency
vs. foreign currency – – – –
B.2 Other derivatives – – – –
1. Transactions with
exchange of principal – – – –
– purchases – – – –
– sales – – – –
– foreign currency vs.
foreign currency – – – –
2. Transactions without
exchange of principal – – – –
– purchases – – – –
– sales – – – –
– foreign currency vs.
foreign currency – – – –

230 231
Exchange rates and gold Other assets Total 2006 Total 2005
Listed Unlisted Listed Unlisted Listed Unlisted Listed Unlisted
– 25,622,435 – 149,667 4,425,810 311,155,765 5,991,342 188,082,509
– 25,501,392 – – 2,485,209 49,474,117 2,019,171 24,771,734
– 12,214,938 – – 1,103,505 24,514,407 606,175 14,146,776
– 12,537,402 – – 1,381,704 24,210,658 1,412,996 10,360,484
– 749,052 – – – 749,052 – 264,474
– 121,043 – 149,667 1,940,601 261,681,648 3,972,171 163,310,775
– 23,540 – – 427,735 132,413,714 865,077 81,490,646
– 97,503 – 149,667 1,512,866 129,267,934 3,107,094 81,820,129
– – – – – – – –
– 1,288,335 – – – 5,319,819 – 15,540,179
– 1,288,335 – – – 5,319,819 – 3,886,600
– 1,288,335 – – – 1,288,335 – 132,244
– 1,288,335 – – – 1,288,335 – 132,244
– – – – – – – –
– – – – – – – –
– – – – – 4,031,484 – 3,754,356
– – – – – 3,485,773 – 3,208,211
– – – – – 545,711 – 546,145
– – – – – – – –
– – – – – – – 11,653,579
– – – – – – – 5,364,228
– – – – – – – 471,864
– – – – – – – 4,892,364
– – – – – – – –
– – – – – – – 6,289,351
– – – – – – – 3,363,670
– – – – – – – 2,925,681
– – – – – – – –

CAPITALIA
NOTES TO THE FINANCIAL STATEMENTS
A.4 OVER-THE-COUNTER FINANCIAL DERIVATIVES: POSITIVE FAIR VALUE - COUNTERPARTY RISK
Debt securities and interest rates
Equity securities and equity indices
Gross not Gross Future Gross not Gross Future
netted netted exposure netted netted exposure
A. Supervisory trading book
A.1 Governments
and central banks – – – – – –
A.2 Government agencies – – – – – –
A.3 Banks 424,829 2,136,977 98,439 75,854 965,120 159,807
A.4 Financial companies 6,547 – 3,825 194,439 41,822 63,243
A.5 Insurance undertakings – – – 6,814 – –
A.6 Non-financial companies – – – – – –
A.7 Other 20,859 – 1,317 130,218 – 169,613
Total A 452,235 2,136,977 103,581 407,325 1,006,942 392,663
Total 2005 833,981 1,427,009 371,960 160,430 322,560 470,627
B. Banking book
B.1 Governments
and central banks – – – – – –
B.2 Government agencies – – – – – –
B.3 Banks 171,479 95,878 6,215 – – –
B.4 Financial companies 3,560 – – – – –
B.5 Insurance undertakings – – – – – –
B.6 Non-financial companies – – – – – –
B.7 Other – – – – – –
Total B 175,039 95,878 6,215 – – –
Total 2005 477,868 6,683 14,867 203,705 – 181,835

232 233
Exchange rates and gold Other assets Different underlyings
Gross not Gross Future Gross not Gross Future Netted Future
netted netted exposure netted netted exposure exposure
– – – – – – – –
– – – – – – – –
143,355 164,698 66,777 63,456 2,676 7,780 876,708 762,733
– – – – – – 39,549 34,087
– – – – – – – –
– – – – – – – –
– – – – – – 2,555 1,990
143,355 164,698 66,777 63,456 2,676 7,780 918,812 798,810
153,606 48,644 85,300 1,815 709 19,740 473,795 380,093
– – – – – – – –
– – – – – – – –
12,023 2,709 8,984 – – – – –
– – – – – – – –
– – – – – – – –
– – – – – – – –
– – – – – – – –
12,023 2,709 8,984 – – – – –
4,425 5,174 5,179 – – – – –

CAPITALIA
NOTES TO THE FINANCIAL STATEMENTS
A.5 OVER-THE-COUNTER FINANCIAL DERIVATIVES: NEGATIVE FAIR VALUE - FINANCIAL RISK
A. Supervisory trading book
Debt securities and interest rates
Equity securities and equity indices
Gross not Gross Future Gross not Gross Future
netted netted exposure netted netted exposure
A.1 Governments and central banks – – – – – –
A.2 Government agencies – – – – – –
A.3 Banks 215,272 1,779,481 32,695 44,578 819,432 16,200
A.4 Financial companies 426 – 66 56,836 2,273 –
A.5 Insurance undertakings – – – – – –
A.6 Non-financial companies – – – – – –
A.7 Other 543,753 – – 765,364 – –
Total A 759,451 1,779,481 32,761 866,778 821,705 16,200
Total 2005 394,984 1,461,244 255,226 258,393 156,937 11,167
B. Banking book
B.1 Governments and central banks – – – – – –
B.2 Government agencies – – – – – –
B.3 Banks 7,652 113,552 348 – – –
B.4 Financial companies – – – – – –
B.5 Insurance undertakings – – – – – –
B.6 Non-financial companies – – – – – –
B.7 Other – – – – – –
Total B 7,652 113,552 348 – – –
Total 2005 386,885 29,415 5,636 518,791 – –

234 235
Exchange rates and gold Other assets Different underlyings
Gross not Gross Future Gross not Gross Future Netted Future
netted netted exposure netted netted exposure exposure
– – – – – – – –
– – – – – – – –
117,119 206,392 48,885 2,309 – 800 384,159 81,207
– – – – – – – –
– – – – – – – –
55 – – – – – – –
4,311 – – – – – – –
121,485 206,392 48,885 2,309 – 800 384,159 81,207
190,977 46,486 64,816 1,355 – 800 367,274 43,269
– – – – – – – –
– – – – – – – –
9,365 7,573 2,384 – – – – –
– – – – – – – –
– – – – – – – –
– – – – – – – –
– – – – – – – –
9,365 7,573 2,384 – – – – –
14,199 – – 1,184 – 6,000 – –

CAPITALIA
NOTES TO THE FINANCIAL STATEMENTS
A.6 RESIDUAL MATURITY OF OVER-THE-COUNTER DERIVATIVES: NOTIONAL VALUES
Up to 1 year From 1 to 5 years Over 5 years Total
A. Supervisory trading book 173,698,246 107,317,581 37,601,016 318,616,843
A.1 Debt securities and interest rates 141,863,301 82,496,059 33,850,304 258,209,664
A.2 Equity securities and equity indices 6,676,692 24,272,966 3,685,420 34,635,078
A.3 Exchange rates and gold 25,018,586 538,556 65,292 25,622,434
A.4 Other assets 139,667 10,000 – 149,667
B. Banking book 3,382,289 2,747,020 759,450 6,888,759
B.1 Debt securities and interest rates 2,190,378 2,650,596 759,450 5,600,424
B.2 Equity securities and equity indices – – – –
B.3 Exchange rates and gold 1,191,911 96,424 – 1,288,335
B.4 Other assets – – – –
Total 177,080,535 110,064,601 38,360,466 325,505,602

236 237
B. CREDIT DERIVATIVES
B.1 CREDIT DERIVATIVES: END-PERIOD AND AVERAGE NOTIONAL AMOUNTS
Supervisory trading book
Other
individual party more than one individual party more than one
party (basket)
party (basket)
1. Purchases of protection
1.1 With exchange of principal
(with specific indication of
the contract forms) 153,093 – – –
1.2 Without exchange of principal
(with specific indication
of the contract forms) – 50,000 – –
Total 153,093 50,000 – –
Total 2005 448,755 103,907 – -
Average amounts 350,633 59,636 – –
2. Sales of protection:
2.1 With exchange of principal
(with specific indication
of the contract forms) 64,000 – 210,483
2 .2 Without exchange of principal
(with specific indication
of the contract forms) – – – –
Total 64,000 – 210,483 –
Total 2005 407,291 74,390 245,990 –
Average amounts 247,058 34,797 225,278 –

CAPITALIA
NOTES TO THE FINANCIAL STATEMENTS
B.2 CREDIT DERIVATIVES: POSITIVE FAIR VALUE - COUNTERPARTY RISK
A. SUPERVISORY TRADING BOOK
A.1 Purchases of protection
Notional amount Positive fair value Future exposure
with counterparties 60,000 448 750
1. Governments and
central banks – – –
2. Other government agencies – – –
3. Banks 60,000 448 750
4. Financial companies – – –
5. Insurance undertakings – – –
6. Non-financial companies – – –
7. Other – – –
A.2 Sales of protection
with counterparties 50,500 390 252
1. Governments and central banks – – –
2. Other government agencies – – –
3. Banks 50,500 390 252
4. Financial companies – – –
5. Insurance undertakings – – –
6. Non-financial companies – – –
7. Other – – –
B. BANKING BOOK
B.1 Purchases of protection
with counterparties – – –
1. Governments and central banks – – –
2. Other government agencies – – –
3. Banks – – –
4. Financial companies – – –
5. Insurance undertakings – – –
6. Non-financial companies – – –
7. Other – – –
B.2 Sales of protection with counterparties – – –
1 Governments and central banks – – –
2 Other government agencies – – –
3 Banks – – –
4 Financial companies – – –
5 Insurance undertakings – – –
6 Non-financial companies – – –
7 Other – – –
Total 110,500 838 1,002
Total 2005 481,985 3,482 2,905

238 239
B.3 CREDIT DERIVATIVES: NEGATIVE FAIR VALUE - FINANCIAL RISK
Notional amount
Negative fair value
SUPERVISORY TRADING BOOK
1 Purchases of protection with counterparties
1.1 Governments and central banks – –
1.2 Other government agencies – –
1.3 Banks 143,093 2,178
1.4 Financial companies – –
1.5 Insurance undertakings – –
1.6 Non-financial companies – –
1.7 Other – –
Total 143,093 2,178
Total 2005 362,258 2,558
B.4 RESIDUAL MATURITY OF CREDIT DERIVATIVES: NOTIONAL VALUES
Up to 1 year From 1 to 5 years Beyond 5 years Total
A. Supervisory trading book
A.1 Credit derivatives with qualifying
reference obligation 15,000 86,593 38,000 139,593
A.2 Credit derivatives with
non-qualifying reference obligation 5,000 50,000 72,500 127,500
B. Banking book
B.1 Credit derivatives with qualifying
reference obligation – – 210,483 210,483
B.2 Credit derivatives with
non-qualifying reference obligation – – – –
Total 20,000 136,593 320,983 477,576

CAPITALIA
NOTES TO THE FINANCIAL STATEMENTS
Section 3 – LIQUIDITY RISK
Qualitative disclosures
credit available on an ongoing basis. The desks make use
of electronic platforms (e-Mid), infoproviders (Reuters
Dealing) and brokers.
A. OVERVIEW, MANAGEMENT AND MEASUREMENT OF
LIQUIDITY RISK
The Parent Company’s treasury operations have
centralized control over liquidity risk management for the
entire Group, The maintenance of balanced liquidity
conditions is conducted on an intraday basis.
The Groups liquidity profile is monitored by four
different units with the treasury that interact constantly in
order to ensure prompt and cost-effective action in
handling any daily liquidity deficit or surplus.
The desks that operate in the markets, in both euros
and foreign exchange, diversify the sources of liquidity
while monitoring the degree of concentration on the
interbank market and, indirectly, the potential maximum
The repo desk works to meet the Group’s primary
liquidity requirements, ensuring the end-of-day
availability of the eligible assets needed for any
refinancing with the ECB.
The payment systems desk monitors in/out flows,
ensuring compliance with the daily cutoff times of the
various clearing subsystems. It uses interactive
procedures to match forecasts of liquidity needs with the
instantaneous liquidity available on the management
account and, where necessary, carry out intersystem
swaps between the Target and EBA systems.
Reporting is comprehensive, with data on flows and
balances at both the Parent Company and the network
banks, enabling strategic and detailed management of
liquidity.

240 241
Quantitative disclosures
1. DISTRIBUTION OF FINANCIAL ASSETS AND LIABILITIES ASSETS BY RESIDUAL MATURITY Currency: euro
on demand more than more than more than more than more than more than more than More than
1 day to 7 days 15 days 1 month to 3 months 6 months 1 year to 5 years
7 days to 15 days to 1 month 3 months to 6 months to 1 year 5 years
On-balance-sheet
assets 30,946,568 4,310,514 1,943,065 1,131,057 1,470,265 296,112 386,796 1,097,185 2,790,990
A.1 Government
securities – – – – 50,851 – 343,346 599,249 181,927
A.2 Listed debt
securities 931 1,152 – 166 5,377 8,048 9,771 145,422 1,100,268
A.3 Other debt
securities 105 – – – 9,032 17,298 5,177 330,643 1,445,831
A.4 Units in collective
investment
undertakings 729,052 – – – – – – – –
A.5 Loans 30,216,480 4,309,362 1,943,065 1,130,891 1,405,005 270,766 28,502 21,871 62,964
– banks 28,556,376 4,054,229 1,820,399 1,097,661 705,150 269,764 28,295 14,745 978
– customers 1,660,104 255,133 122,666 33,230 699,855 1,002 207 7,126 61,986
On-balance-sheet
liabilities 3,518,668 3,218,139 1,982,730 4,819,624 2,772,417 3,345,668 2,490,840 22,284,118 8,054,102
B.1 Deposits 3,518,627 1,646,176 610,412 2,368,890 1,635,549 2,302,569 1,684,203 1,793,560 1,788,126
– banks 3,518,627 1,646,176 610,412 2,368,890 1,635,549 2,302,569 1,684,203 1,793,560 1,788,126
– customers – – – – – – – – –
B.2 Debt securities
in circulation 41 16,090 38,288 10,066 46,936 834,281 763,335 19,602,540 6,046,392
B.3 Other
liabilities – 1,555,873 1,334,030 2,440,668 1,089,932 208,818 43,302 888,018 219,584
Off-balance-sheet
transactions
C.1 Financial derivatives
with exchange
of principal
– long positions 179 2,065,278 1,141,262 1,686,768 2,773,396 3,400,812 3,525,793 6,872,116 539,074
– short positions 153 1,710,436 1,271,060 1,346,154 4,518,722 3,880,480 3,258,556 5,391,776 525,268
C.2 Deposits and loans
to receive/grant
– long positions – 287,358 – 47,365 – – – – –
– short positions 94,723 – 239,000 – 1,000 – – – –
C.3 Irrevocable
commitments
to disburse funds
– long positions 203,703 – 409,620 – 30,296 100,154 56,539 625,589 213,000
– short positions 651,859 773,261 – 2,637 – 5,000 5,000 44,256 220,483

CAPITALIA
NOTES TO THE FINANCIAL STATEMENTS
Currency: dollar
on demand more than more than more than more than more than more than more than More than
1 day to 7 days 15 days 1 month to 3 months 6 months 1 year to 5 years
7 days to 15 days to 1 month 3 months to 6 months to 1 year 5 years
On-balance-sheet
assets 1,757,012 104,287 1,624 29,855 17,939 4,425 – 536 1,744
A.1 Government
securities – – – – – – – – 2
A.2 Listed debt
securities – – – 39 – 84 – 142 803
A.3 Other debt
securities – – – – – – – 394 451
A.4 Units in collective
investment
undertakings 1,102 – – – – – – – –
A.5 Loans 1,755,910 104,287 1,624 29,816 17,939 4,341 – – 488
– banks 1,755,910 104,287 1,624 29,816 17,939 4,341 – – 488
– customers – – – – – – – – –
On-balance-sheet
liabilities 539,955 61,735 234,558 345,217 1,280,810 437,506 76,396 218,624 186
B.1 Deposits 539,955 55,272 234,136 343,437 1,280,416 437,506 17,418 – –
– banks 539,955 55,272 234,136 343,437 1,280,416 437,506 17,418 – –
– customers – – – – – – – – –
B.2 Debt securities
in circulation – – – – – – 58,978 218,557 –
B.3 Other liabilities – 6,463 422 1,780 394 – – 67 186
Off-balance-sheet
transactions
C.1 Financial derivatives
with exchange
of principal
– long positions 111 635,255 1,197,937 1,080,669 4,043,603 3,020,663 3,023,779 113,550 3,739
– short positions 100 808,385 1,029,965 1,462,031 2,424,286 2,661,047 3,314,466 144,721 320
C.2 Deposits and loans
to receive/grant
– long positions – 9,256 – – – – – – –
– short positions 9,256 – – – – – – – –
C.3 Irrevocable
commitments to
disburse funds
– long positions – 128,664 – – – – – – –
– short positions – 128,664 – – – – – – –

242 243
Currency: pound sterling
on demand more than more than more than more than more than more than more than More than
1 day to 7 days 15 days 1 month to 3 months 6 months 1 year to 5 years
7 days to 15 days to 1 month 3 months to 6 months to 1 year 5 years
On-balance-sheet
ssets 137,629 43,954 – 72 – – – 4 –
A.1 Government
securities – – – – – – – – –
A.2 Listed debt
securities – – – – – – – 4 –
A.3 Other debt
securities – – – – – – – – –
A.4 Units in collective
investment
undertakings – – – – – – – – –
A.5 Loans 137,629 43,954 – 72 – – – – –
– banks 137,629 43,954 – 72 – – – – –
– customers – – – – – – – – –
On-balance-sheet
liabilities 54,399 9,075 1,560 75,236 616 6,860 – 52,457 –
B.1 Deposits 54,399 9,075 1,560 75,236 616 149 – – –
– banks 54,399 9,075 1,560 75,236 616 149 – – –
– customers – – – – – – – – –
B.2 Debt securities
in circulation – – – – – 6,711 – 52,457 –
B.3 Other liabilities – – – – – – – – –
Off-balance-sheet
transactions
C.1 Financial derivatives
with exchange
of principal
– long positions 14 25,640 – 3,500 15,881 157,755 – 104,399 48
– short positions 12 4,897 28,138 6,919 11,936 215,545 177 50,396 48
C.2 Deposits and loans
to receive/grant
– long positions – 255 – – – – – – –
– short positions 255 – – – – – – – –
C.3 Irrevocable
commitments
to disburse funds
– long positions – 57,642 130 – – – – – –
– short positions 130 57,642 – – – – – – –

CAPITALIA
NOTES TO THE FINANCIAL STATEMENTS
Currency: Yen
on demand more than more than more than more than more than more than more than More than
1 day to 7 days 15 days 1 month to 3 months 6 months 1 year to 5 years
7 days to 15 days to 1 month 3 months to 6 months to 1 year 5 years
On-balance-sheet
assets 48,076 86,028 62 – – – – – –
A.1 Government
securities – – – – – – – – –
A.2 Listed debt
securities – – – – – – – – –
A.3 Other debt
securities – – – – – – – – –
A.4 Units in collective
investment
undertakings – – – – – – – – –
A.4 Loans 48,076 86,028 62 – – – – – –
– banks 48,076 86,028 62 – – – – – –
– customers
On-balance-sheet
liabilities 64,548 – 304 18,938 6,300 6,392 – – –
B.1 Deposits 64,548 – 304 18,938 6,300 6,392 – – –
– banks 64,548 – 304 18,938 6,300 6,392 – – –
– customers – – – – – – – – –
B.2 Debt securities
in circulation – – – – – – – – –
B.3 Other liabilities – – – – – – – – –
Off-balance-sheet
transactions
C.1 Financial derivatives
with exchange
of principal
– long positions – 16,268 – 7,265 93,460 8,535 114,938 – –
– short positions – 17,276 5,735 5,235 111,391 13,709 120,253 4,880 –
C.2 Deposits and loans
to receive/grant
– long positions – 777 – – – – – – –
– short positions 777 – – – – – – – –
C.3 Irrevocable
commitments
to disburse funds
– long positions – 38,364 – – – – – – –
– short positions – 38,364 – – – – – – –

244 245
Currency: Swiss franc
on demand more than more than more than more than more than more than more than More than
1 day to 7 days 15 days 1 month to 3 months 6 months 1 year to 5 years
7 days to 15 days to 1 month 3 months to 6 months to 1 year 5 years
On-balance-sheet
assets 160,685 15,063 297 – – – – 13 –
A.1 Government
securities – – – – – – – 13 –
A.2 Listed debt
securities – – – – – – – – –
A.3 Other debt
securities – – – – – – – – –
A.4 Units in collective
investment
undertakings – – – – – – – – –
A.4 Loans 160,685 15,063 297 – – – – – –
– banks 160,685 15,063 297 – – – – – –
– customers – – – – – – – – –
On-balance-sheet
liabilities 982 1,893 16,764 106,424 361 33,287 – – –
B.1 Deposits 982 1,893 16,764 106,424 361 33,287 – – –
– banks 982 1,893 16,764 106,424 361 33,287 – – –
– customers – – – – – – – – –
B.2 Debt securities
in circulation – – – – – – – – –
B.3 Other liabilities – – – – – – – – –
Off-balance-sheet
transactions
C.1 Financial derivatives
with exchange
of principal
– long positions 1 2,062 – – – – – – 24,725
– short positions 1 1,660 – 3,065 327 8,954 – – 24,725
C.2 Deposits and loans
to receive/grant
– long positions – 72 – – – – – – –
– short positions 72 – – – – – – – –
C.3 Irrevocable
commitments
to disburse funds
– long positions – 125 138 – – – – – –
– short positions 138 125 – – – – – – –

CAPITALIA
NOTES TO THE FINANCIAL STATEMENTS
Currency: other
on demand more than more than more than more than more than more than more than More than
1 day to 7 days 15 days 1 month to 3 months 6 months 1 year to 5 years
7 days to 15 days to 1 month 3 months to 6 months to 1 year 5 years
On-balance-sheet
assets 31,235 38,756 – 35 – – – 16 –
A.1 Government
securities – – – – – – – – –
A.2 Listed debt
securities – – – – – – – 16 –
A.3 Other debt
securities – – – – – – – – –
A.4 Units in collective
investment
undertakings – – – – – – – – –
A.4 Loans 31,235 38,756 – 35 – – – – –
– banks 31,235 38,756 – 35 – – – – –
– customers – – – – – – – – –
On-balance-sheet
liabilities 53,449 8,664 46 732 7,370 655 210 55,067 6
B.1 Deposits 53,449 8,664 46 732 7,370 655 210 – –
– banks 53,449 8,664 46 732 7,370 655 210 – –
– customers – – – – – – – – –
B.2 Debt securities
in circulation – – – – – – – 54,268 –
B.3 Other liabilities – – – – – – – 799 6
Off-balance-sheet
transactions
C.1 Financial derivatives
with exchange
of principal
– long positions 23 8,007 – 11,602 93,685 – 20,217 54,169 41
– short positions 58 2,725 1 15,254 30,188 38 18,356 362 40
C.2 Deposits and loans
to receive/grant
– long positions – 109 – – – – – – –
– short positions 109 – – – – – – – –
C.3 Irrevocable
commitments
to disburse funds
– long positions – 30,124 58 – – – – – –
– short positions 58 30,124 – – – – – – –

246 247
2. SECTORAL DISTRIBUTION OF FINANCIAL LIABILITIES
Governments Other government Financial Insurance Non-financial Other
and central agencies companies undertakings companies
banks
1 Due to customers – – 260,926 – – –
2 Debt securities issued – 5,928 148,686 64,914 2,878,467 2,684,377
3 Financial liabilities
held for trading 241,014 185 75,312 98 29,271 1,313,432
4 Financial liabilities
carried at fair value – – – – – –
Total 241,014 6,113 484,924 65,012 2,907,738 3,997,809
3. GEOGRAPHICAL DISTRIBUTION OF FINANCIAL LIABILITIES
Italy Other America Asia Rest of world
European
countries
1 Due to customers 140,416 120,510 – – –
2 Due to banks 20,670,481 5,864,689 588,132 506,274 322,294
3 Debt securities issued 18,496,736 9,213,026 – – –
4 Financial liabilities held for trading 1,809,155 2,660,065 377,557 4 401
5 Financial liabilities carried at fair value – – – – –
Total 41,116,788 17,858,290 965,689 506,278 322,695
Section 4 – OPERATIONAL RISKS
Qualitative disclosures
A. OVERVIEW, MANAGEMENT AND MEASUREMENT OF
OPERATIONAL RISK
Capitalia has implemented all governance mechanisms
in terms of structures, processes, strategies and
policies for measuring and managing operational risks,
with the aim of creating an advanced measurement model
that meets the regulatory standards envisaged by the
new Basle Capital Accord.
Capitalia is integrating information about operational
losses classified by specified loss events (loss event
model) and risk factors (model for classifying types of
risk). The information includes:
material internal data on operational losses (loss data
collection);
data on potential losses (self-assessment, scenario
analyses);
factors that are representative of the company
context and internal control system;
system loss data (external data).

CAPITALIA
NOTES TO THE FINANCIAL STATEMENTS
The main activities carried out at Capitalia are loss data
collection, with the definition of roles and responsibilities,
and the methods for the collection and validation of data.
The collection of material loss data is fully operational. In
June 2006, having obtained a complete set of loss data,
the goal of becoming a member of ABI’s consortium
database on operational losses (DIPO) was achieved. In
addition, analysis of statistical models of operational risk
measurement that use the qualitative and quantitative
data gathered to generate an assessment of operational
VaR also continued.
Quantitative disclosures
The Capitalia Group’s capital requirement for
operational risk, calculated using the standardized
approach, stood at around €249 million at 31
December 2006.
OPERATIONAL RISKS
Capital
Business line
requirement
Corporate finance 3,036
Trading & sales 89,036
Retail banking –
Commercial banking 157,604
Payment & settlement 41
Agency services –
Asset management –
Retail brokerage –
Total 249,717

248 249
PART F – INFORMATION ON
SHAREHOLDERS’ EQUITY
Section 1 – SHAREHOLDERS’ EQUITY OF THE BANK
A. Qualitative disclosures
In managing its overall risk profile, Capitalia uses an
internal definition of “economic capital” measured,
under a “building blocks” approach, with internal
models: the models cover credit risk, market risk, interest
rate risk, exchange rate risk and operational risk.
As regards calculating risk-adjusted yield for the
purposes of capital allocation, an absorbed regulatory
capital concept is employed, supplemented with
measures of interest rate risk and operational risk, taking
account of the Tier 1 targets set out in the Group
Business Plan.
B. Quantitative disclosures
The Bank is required to meet the minimum capital
requirements set by the supervisory authorities.
Compliance with requirements is monitored constantly
and the Parent Company is also responsible for
monitoring them at the consolidated level.
Section 2 – REGULATORY CAPITAL AND CAPITAL
RATIOS
update of 3 April 2006, in which the supervisory authority
introduced new rules on the prudential filters to be
applied, in accordance with the Bank of Italy note of 8
February 2006, starting with the individual financial
statements at 30 June 2006.
A. Qualitative disclosures
1. TIER 1 CAPITAL
The positive Tier 1 capital elements are composed of
share capital (€2,595 million), share premium (€3,383
million) and reserves (€1,174 million) and of income for
the period net of the portion designated for dividends
and donations to charity (€585 million) for a total of €861
million. Tier 1 capital does not comprise any innovative
capital instruments.
The negative elements, amounting to €22 million,
include goodwill (€18 million) and other intangible assets
(€4 million).
The application of the new prudential filters rules to
Tier 1 capital reduced the latter by €310 million, due, in
the amount of €193 million, to the recognition of the
contingent risk associated with derivatives on own
shares, and in the amount of €117 million to the negative
reserve for AFS debt securities.
2.1 REGULATORY CAPITAL
Regulatory capital was calculated in accordance with
the instructions contained in Circular no. 155, 11th
2. TIER 2 CAPITAL
Tier 2 capital amounts to €2,872 million and is

CAPITALIA
NOTES TO THE FINANCIAL STATEMENTS
essentially composed of subordinated liabilities (€2,761
million).
The application of the prudential filter rules to Tier 2
capital reduced the latter by €79 million, equal to 50% of
the positive valuation reserve for available-for-sale
equities and units/shares in CIUs that cannot be included
in the calculation of regulatory capital.
3. TIER 3 CAPITAL
Tier 3 subordinated loans, equal to €631 million,
were used up to the level of market risks in the amount of
€558 million.
Subordinated liabilities were computed in regulatory
capital net of repurchases, including those not yet settled.
The following tables detail the main features of the
issues.
ISSUES WHOSE AMOUNT EXCEEDS 10% OF TOTAL SUBORDINATED LIABILITIES
(thousands of euros)
Subordinated loan amount type interest rate issue date maturity date early Condition
reported in the calculated of capital redemption
original currency for regulatory option
and issue
capital
amount
purposes
Eur 400,000,000 402.419 TIER 2 3-month euribor + 0.30: 07 April 2006 07 April 2016 from 7 April 2011 “step up” with rate of
After April 2011:
3-month euribor
3-month-euribor + 0.90%
+ 0.30% for first 5 years and
3-month euribor + 0.90%
thereafter; ”trigger events”
give subscriber right to early
redemption in event of
issuer default.
Eur 500,000,000 502.230 TIER 2 3-month euribor +0.45%. 21 October 2004 21 October 2016 from 21 October 2011 “step up” with rate of
From October 2011:
3-month euribor + 0.45% for
3-month euribor +1.05%.
first 7 years and 3-month
euribor + 1.05% thereafter;
“trigger events” give subscriber
right to early redemption in
event of issuer default.

250 251
OTHER ISSUES:
(thousands of euros)
Subordinated loan amount type interest rate issue date maturity date early
reported in the calculated of capital redemption
original currency for regulatory option
and issue
capital
amount
purposes
Eur 300,000,000 272.214 TIER 2 First 2 years: nom. 3 August 2004 3 August 2014 3 August 2009
3% annual. 6-month euribor
+ 0.20% thereafter
Eur 300,000,000 254.500 TIER 2 First year: 2.65%. 2 December 2004 2 December 2014 2 December 2009
From 2 nd to 5 th year: 0.80%
+ any positive change in European
consumer price index.
6-month euribor +0.20% thereafter.
Eur 400,000,000 279.290 TIER 2 fixed rate 3% gross annually. 30 June 2005 30 June 2015 from 30 June 2010
From second year: floating rate
equal to 75% of the annual 10-year
swap rate for euro.
Eur 300,000,000 300.547 TIER 2 3-month euribor +0.55%. 11 August 2004 11 August 2014 from 11 August 2009
From August 2009: 3-month
euribor +1.15%.
Eur 300,000,000 294.943 TIER 2 3-month euribor +0.45%.
From June 2010 3-month
euribor + 1.05% 23 June 2005 23 June 2015 from 23 June 2010
Eur 150,000,000 150.955 TIER 2 3-month euribor +0.45%.
From October 2011: 3-month
euribor +1.05%. 16 December 2005 21 October 2016 from 21 October 2011
Eur 230,000,000 173.074 TIER 2 fixed rate 3.50% gross annually.
From second year: floating rate
equal to 75% of the annual
10-year swap rate for euro 30 March 2006 30 March 2016 from 30 March 2011
Eur 170,000,000 130.833 TIER 2 fixed rate 4% gross annually.
From second year: floating rate
equal to 65% of the annual
10-year swap rate for euro 30 March 2006 30 March 2016 from 30 March 2011
Subordinated loan amount type interest rate issue date maturity date early
reported in the calculated of capital redemption
original currency for regulatory option
and issue
capital
amount
purposes
Eur 165,000,000 159.264 TIER 3 3% annual fixed 13 June 2003 13 June 2007 none
Eur 177,000,000 174.160 TIER 3 3% annual fixed 30 June 2003 30 June 2007 none
Eur 300,000,000 297.764 TIER 3 3-month euribor +0.23% 30 November 2005 30 May 2008 none

CAPITALIA
NOTES TO THE FINANCIAL STATEMENTS
B. Quantitative disclosures
(millions of euros) Total 2006 Total 2005
A. Tier 1 capital before prudential filters 7,991 6,872
Tier 1 capital prudential filters:
– positive IAS/IFRS prudential filters – –
– negative IAS/IFRS prudential filters (310) –
B. Tier 1 capital after prudential filters 7,681 6,872
C. Tier 2 capital before prudential filters 2,951 2,966
Tier 2 prudential filters:
– positive IAS/IFRS prudential filters – –
– negative IAS/IFRS prudential filters (79) –
D. Tier 2 capital after prudential filters 2,872 2,966
E. Total Tier 1 and Tier 2 capital after prudential filters 10,553 9,838
Elements to deduct from total Tier 1 and Tier 2 capital (324) (250)
F. Regulatory capital 10,229 9,588
2.2 CAPITAL ADEQUACY
A. Qualitative disclosures
The Tier 1 capital ratio was 21.96% and the total capital ratio was 30.84%, above the minimum supervisory
requirements.

252 253
B. Quantitative disclosures
(millions of euros) Total 2006 Total 2005
Unweighted Weighted amounts/ Unweighted Weighted amounts/
amounts* requirements amounts* requirements
A. RISK ASSETS 58,180 24,919 49,915 23,074
A.1 CREDIT RISK
STANDARD METHODOLOGY
BALANCE-SHEET ASSETS 56,293 24,209 46,854 21,803
1. Exposures (other than capital
instruments and other subordinated
assets) to (or guaranteed by):
1.1 Governments and central banks 4,071 15 4,739 24
1.2 Other government agencies 39 8 55 11
1.3 Banks 34,901 6,978 25,496 5,097
1.4 Other (other than mortgage
loans on residential
and non-residential buildings) 2,274 2,270 2,967 2,964
2. Mortgage loans on residential
buildings – – – –
3. Mortgage loans on non-residential
buildings 7 7 10 10
4. Shares, equity participations
and subordinated assets 12,722 12,765 12,960 13,326
5. Other balance-sheet assets 2,279 2,166 626 371
OFF-BALANCE-SHEET ASSETS 1,887 710 3,061 1,270
1. Guarantees and commitments to
(or guaranteed by):
1.1 Governments and central banks 204 – 380 –
1.2 Other government agencies – – – –
1.3 Banks 975 195 918 184
1.4 Other 465 465 914 914
2. Derivatives contracts with (or guaranteed by):
2.1 Governments and central banks – – – –
2.2 Other government agencies – – – –
2.3 Banks 239 48 841 168
2.4 Other 4 2 8 4
B. CAPITAL REQUIREMENTS
B.1 CREDIT RISK X 1.744 X 1,615
B.2 MARKET RISKS X 558 X 513
1. STANDARD METHODOLOGY X 558 X 513
of which:
+ position risk on debt securities X 192 X 146
+ position risk on equity securities X 192 X 207
+ exchange rate risk X – X –
+ other risks X 174 X 161

CAPITALIA
NOTES TO THE FINANCIAL STATEMENTS
(millions of euros) Total 2006 Total 2005
Unweighted Weighted amounts/ Unweighted Weighted amounts/
amounts* requirements amounts* requirements
2. INTERNAL MODELS X – X –
of which:
+ position risk on debt securities X – X
+ position risk on equity securities X – X
+ exchange rate risk X – X
B.3 OTHER PRUDENTIAL
REQUIREMENTS X 147 X 177
B.4 TOTAL PRUDENTIAL
REQUIREMENTS (B1+B2+B3) X 2,449 X 2,305
C. RISK ASSETS AND CAPITAL RATIOS
C.1 Risk weighted assets X 34,980 X 32,930
C.2 Tier 1 capital ratio X 21,96% X 20.87%
C.3 Total capital ratio X 30,84% X 30.67%
(*) The unweighted amounts correspond to nominal value for balance-sheet risk assets and to credit equivalent value for off-balance sheet assets.

254 255
PART G – BUSINESS COMBINATIONS
Section 1 – OPERATIONS CARRIED OUT DURING
THE YEAR
BUSINESS COMBINATIONS
In 2006 Capitalia acquired control of Ipse 2000 S.p.A..
The acquisition was achieved first with the subscription of
a capital increase and then the purchase from another
shareholder of shares representing more than 12% of
share capital (for greater details see the section “Equity
investments and shareholdings”).
Control of Ipse 2000 was acquired on 29 December
2006, when the investment was raised to 6,250,001
shares, equal to 50.00001% of share capital.
In 2006 Ipse 2000 did not generate revenues from its
primary business and posted a loss of €11.5 million. At
end-2006 shareholders’ equity was €20.5 million.
1.2.2 OTHER
Ipse 2000, a company that was awarded a UMTS
license in 2000, is carried by Capitalia S.p.A. at a book
value of €5.3 million (€4.7 million in share capital and
€0.6 million in class A equity instruments). Negative
goodwill of €1 million has been recognized in the
consolidated financial statements, recognized under
“Other operating income” in the income statement.
Ipse 2000 S.p.A. reports assets of €32.4 million;
shareholders’ equity, including €8.7 million in equity
instruments, amounts to €20.5 million. The assets are
largely accounted for by liquidity.
The figures for Ipse 2000 S.p.A. are reflected in the
balance sheet. The company’s result for the year is also
reflected in the balance sheet as it was included in the
purchase cost
1.2 OTHER INFORMATION ON BUSINESS
COMBINATIONS
There is no other material information.
Section 2 – TRANSACTIONS CARRIED OUT AFTER
THE CLOSE OF THE YEAR
1.2.1 CHANGE FOR THE YEAR IN GOODWILL
BUSINESS COMBINATIONS
None.
None.

CAPITALIA
PART H – TRANSACTIONS WITH
RELATED PARTIES
1. INFORMATION ON THE COMPENSATION OF DIRECTORS AND MANAGEMENT
REMUNERATION OF DIRECTORS, STATUTORY AUDITORS AND THE GENERAL MANAGER
(ART.78 OF CONSOB RESOLUTION NO. 11971 OF 14.5.99 AS AMENDED)
(amounts in euros)
Description of position
Compensation
Name Position Term Expiry Gross Non-monetary Bonuses Other
of office of term remuneration benefits and other remuneration
incentives
GERONZI Cesare (A) Chairman 1.1-31.12.2006 apr-09 2,310,000 477 (2) 1,500,000
SAVONA Paolo ( C) Deputy Chairman 5.12-31.12.2006 apr-09 10,685 35 (2)
CUCCIA Paolo ( C) Deputy Chairman 5.12-31.12.2006 apr-09 10,685 35 (2)
COLLEE Coenraad Deputy Chairman 1.1-4.12.2006 dic-06 46,301 (1) 442 (2) – 3,000 (3)
Hendrik Adolph
FEDERICI Mario (B) Deputy Chairman 1.1-4.12.2006 dic-06 69,452 442 (2) – 3,000 (4)
ARPE Matteo (A) Managing Director 1.1-31.12.2006 apr-09 1,070,548 9,399 2,902,884 2,207,119 (15)
ANGELUCCI Giampaolo Director (D) 1.1-20.6.2006 dic-06 18,740 224 (2) – –
BELLONI Antonio Director (E) 1.1-10.2.2006 dic-06 4,493 (1) – – –
BIANCHI MARTINI Silvio Director 5.12-31.12.2006 apr-09 6,658 35 (2) 4,603 (5)
CANNATELLI Pasquale Director (F) 20.3-31.12.2006 apr-09 35,151 375 (2)
COLAIACOVO Carlo Director 1.1-31.12.2006 apr-09 43,699 (1) – – 74,082 (6)
COLANINNO Roberto Director 1.1-31.12.2006 apr-09 37,534 444 (2) – –
CUFFARO Salvatore Director 1.1-4.12.2006 dic-06 37,041 442 (2) – –
FRESCO Paolo Director 1.1-31.12.2006 apr-09 43,699 477 (2) – 3,000 (4)
LIGRESTI Jonella Director 1.1-4.12.2006 dic-06 37,041 442 (2) – –
MANCUSO Salvatore Director 5.12-31.12.2006 apr-09 6,658 35 (2)
MARCHINI Alfio (B) Director 1.1-31.12.2006 apr-09 66,849 477 (2) – –
MARINO Gabriel M (B) Director 1.1-31.12.2006 apr-09 66,849 (1) 477 (2) – -
MARIOTTI Paolo Director 1.1-31.12.2006 apr-09 43,699 477 (2) – –
MENESI Ahmed A. Director 1.1-31.12.2006 apr-09 43,699 477 (2) – 8,985 (7)
MONTI Ernesto ( C) Director (G) 7.9-31.12.2006 apr-09 14,301 135 (2)
PINI Massimo ( C) Director 5.12-31.12.2006 apr-09 9,534 35 (2)
PURI NEGRI Carlo Director 1.1-4.12.2006 dic-06 60,192 442 (2) – –
Alessandro(B)

256 257
Description of position
Compensation
Name Position Term Expiry Gross Non-monetary Bonuses Other
of office of term remuneration benefits and other remuneration
incentives
ROSSETTI Alberto Director 1.1-31.12.2006 apr-09 43,699 477 (2) – 120,000 (8)
SAGGIO Carlo Director 1.1-31.12.2006 apr-09 43,699 477 (2) – 4,603 (5)
TAGLIAVINI Giuliano Director 1.1-4.12.2006 dic-06 37,041 442 (2) – 74,082 (9)
TOTI Pierluigi (A) Director 1.1-31.12.2006 apr-09 70,548 477 (2) – -
VEZZOSI Walter Director 5.12-31.12.2006 apr-09 6,658 35 (2)
BERTINI Umberto Chairman 1.1-31.12.2006 apr-07 124,000 477 (2) – 106,340 (11)
Board of Auditors
TUTINO Franco Luciano Auditor 1.1-31.12.2006 apr-07 82,700 477 (2) – 3,327 (10)
100,575 (12)
GALEOTTI Michele Auditor 1.1-31.12.2006 apr-07 82,700 477 (2) – 55,575 (13)
MINGRONE Marcello Alternate – apr-07 – – – 4,958 (14)
LAMANDA Carmine General Manager 1.1-31.12.2006 – 477 (2) 252.884 913,582 (15)
N.B. The remuneration indicated above does not include tax and social security obligations, where due.
The Shareholders’ Meeting of 5 December 2006 appointed the Board of Directors for the coming three years, until the approval of the financial statements
for 2008.
(A) Members of Executive Committee
(B) Members of Executive Committee until 4.12.2006
(C) Members of Executive Committee since 11.12.2006
(D) Resigned on 20.6.2006
(E) Resigned on 10.2.2006
(F) Appointed on 20 March 2006 and confirmed in position on 20 April 2006 and 5 December 2006
(G) Appointed on 7 September 2006 and confirmed on 5 December 2006
(1) Remuneration paid directly to employer
(2) Insurance policy against non-work related accidents.
(3) Remuneration as member of Compensation Committee paid directly to employer
(4) Remuneration as member of Compensation Committee
(5) Remuneration as member of Compensation Committee for the period 11.12/31.12.2006
(6) Remuneration as member of Compensation Committee - paid directly to employer - for the period 1.1/4.12.2006
(7) Lump-sum reimbursement of expenses
(8) Remuneration as chairman of Internal Control Committee
(9) Remuneration as member of Internal Control Committee for the period 1.1/4.12.2006
(10) 4% social security contribution pursuant to Art. 1, paragraph 212, Law 662/96
(11) Of which: 90,000 as chairman of board of auditors of Banca di Roma, 477 for directors and officers insurance and 15,863 as
Chairman of the board of auditors of Capitalia Partecipazioni.
(12) Of which 90,000 as chariman of the board of auditors of Banco di Sicilia and 10,575 as auditor of Capitalia Partecipazioni.
(13) Of which 45,000 as chairman of the board of auditors of Capitalia Informatica and 10,575 as auditor of Capitalia Partecipazioni.
(14) As auditor of Sigrec.
(15) Employee compensation.

CAPITALIA
NOTES TO THE FINANCIAL STATEMENTS
STOCK OPTIONS GRANTED TO DIRECTORS AND GENERAL MANAGER
Options held Options granted Options exercised Options lapsed Options held
at start of year during year during year during year at the end of the year
Name Position Number of Average Average Number of Average Average Number of Average Average Number of Number of Average Average
options strike expiry options strike expiry options strike market options options strike expiry
price price price price at price
exercise
Arpe Matteo Managing Director 1,800,000 1.214 31/3/07 – – – 1,800,000 1.214 6.0943 – – – –
5,000,000 4.1599 9/11/09 – – – – – – – 5,000,000 4.1599 09/11/2009
Lamanda Carmine General Manager 400,000 4.1599 9//11/09 – – – – – – – 400,000 4.1599 9//11/09
200,000 2.4743 3/2/09 – – – – – – – 200,000 2.4743 3/2/09
STOCK OPTIONS GRANTED TO MANAGERS WITH STRATEGIC RESPONSIBILITIES (NO.13)
Options held Options granted Options exercised Options lapsed Options held
at start of year during year during year during year at the end of the year
Position Number Number of Average Average Number of Average Average Number of Average Average Number of Number of Average Average
options strike expiry options strike expiry options strike market options options strike expiry
price price price price at price
exercise
Ruoli strategici 13 7,220,000 2.9262 20-1-10 – – – 2,400,000 1.2140 6.3836 – 4,820,000 3.7787 15-9-10
The following aggregate figures are provided regarding the compensation of managers with strategic responsibilities
(a total of 13 persons):
Short-term benefits: €11,528 thousand
Post-employment benefits € 729 “
Total €12,257 “
2. INFORMATION ON TRANSACTIONS WITH RELATED PARTIES
The following table contains information on the balance sheet and the income statement with regard to transactions
with related parties:
(millions of euros)
Lending Funding Guarantees Interest Interest Other
and commitments income expense net income
1,542.9 739.1 45.7 5.3 0.1 –

258 259
In addition bonds totaling €2.3 billion were also
placed, mainly in respect of index-linked policies issued
by CNP Capitalia Vita.
At end-2006, Capitalia S.p.A. had a medium/longterm
euro deposit accounts opened for the purposes of
managing and balancing the interest-rate risk of Group
banks, settled on normal market terms, as follows:
€5,609 million of funding from Banco di Sicilia;
€126 million of lending to Banco di Sicilia;
€1,097 million of funding from Banca di Roma;
€2,751 million of lending to Banca di Roma;
€1,363 million of lending to Bipop Carire;
€225 million of lending to Fineco Group;
€112 million of lending to MCC.
The lending to Banca di Roma includes a loan of €706
million, paying a fixed yield of €7.3 million, from
Capitalia to cover a loan granted by Banca di Roma on
the same terms to Lehman Brothers as part of the
restructuring of the Keluma operation in June 2005.
On 15 March 2006, the surety issued by Banca di Roma
S.p.A. on behalf of Capitalia S.p.A. to “The Law Debenture
Trust Corporation plc – London” for a maximum of €800
million against a program of bond issues on the
international markets was renewed for one year.
In 2006, Capitalia provided appropriate economic
and financial support to subsidiary companies in
liquidation. Numerous agreements are in place between
Capitalia and the main Group companies to provide
consultancy and assistance services on an ongoing basis
and to manage certain operational activities more
efficiently.
Intercompany operations not conducted on normal
market terms include interest free shareholder loans to
Corit S.p.A. (drawn in the amount of €1.6 million), Gesett
S.p.A. (drawn in the amount of €0.55 million), Serit S.p.A.
(drawn in the amount of €41 million), Spaget S.p.A.
(drawn in the amount of €0.45 million) and Sanità Srl in
liquidazione (drawn in the amount of €3.6 million).
Aside from the intercompany transactions mentioned
above, Capitalia has no significant transactions
outstanding with related parties as defined by Article
2359 of the Civil Code, and International Accounting
Standard 24 issued by the International Accounting
Standards Board.

CAPITALIA
PART I – PAYMENTS BASED ON
OWN EQUITY INSTRUMENTS
A. Qualitative disclosures
1.DESCRIPTION OF PAYMENT AGREEMENTS BASED ON OWN EQUITY INSTRUMENTS
Information on payments based on own equity instruments is provided in the section “Information on stock option
plans” in the report on operations.
B. Quantitative disclosures
1. CHANGES FOR THE YEAR
Total 2006 Total 2005
Number Average Average Number Average Average
of options strike price expiry of options strike price expiry
A. Opening balance 48,488,984 3.5248 01 August 2010 16,355,000 1.711 25 August 2008
B. Increases
B.1 New issues 33,188,334 4.0884 13 May 2011
B.2 Other changes 3,466,650 4.24 31 December 2009
C. Decreases
C.1 Cancelled 2,531,667 4.0454 10,000 2.4743
C.2 Exercised 9,030,750 1.9034 4,511,000 1.6474
C.3 Lapsed
C.4 Other changes
D. Closing balance 36,926,567 3.8856 14 December 2010 48,488,984 3.5248 01 August 2010
E. Options exercisable
at end of the year 3,736,900 3.1571 6,544,000 1.214
2. OTHER INFORMATION
The exercise of the options described in the previous table had no material impact on the income statement or the
balance sheet and financial situation of the Bank. The cost recognized in the year in respect of share-based payments
amounted to €4.9 million recognized under staff costs. In addition, €6.9 million were recognized under other
administrative expenses in respect of non-employee beneficiaries. The value of the stock option reserve was €22.6 million
at the end of 2006.

APPENDIX

262 263
RECONCILIATION OF INCOME STATEMENT WITH RECLASSIFIED INCOME STATEMENT
Reclassified income statement Headings established in Bank of Italy circular no. 262 of 22 December 2005
Net interest income
10;20;130 a,b,c,d (portion for writeback of impairment-interest);
Net income (loss) on financial assets
and liabilities at fair value 80; 90;100 b (portion in respect of listed companies sold); 100 d; 110
Dividends 70
Net commissions 40; 50
Other operating income (expenses) 190
Gross income
Staff costs
Otter administrative expenses
150 a
150 b
Net value adjustments of tangible
and intangible assets 170; 180
Total operating expenses
Gross operating profit
Net provisions for liabilities and contingencies 160
Net impairment adjustments of loans and
other financial transactions
Net impairment adjustments of financial assets
130 a,d (net of portion for writeback of impairment-interest)
130 b,c (net of portion for writeback of impairment-interest)
Total provisions and value adjustments
Net operating profit
Gains (losses) on disposal of assets and from
equity investments 100 a,b (net of listed companies sold),c ; 210; 240
Net gain (loss) on measurement of tangible
and intangible assets at fair value 220
Profit before tax
Income taxes on continuing operations 260
Profit (loss) after tax from groups of assets being divested 280
Net profit for the period 290

ATTACHMENTS

CAPITALIA
ATTACHMENTS
CAPITALIA GROUP
EQUITY INVESTMENTS AND VOTING RIGHTS EXCEEDING 10% IN COMPANIES WITH UNLISTED SHARES OR PRIVATE
LIMITED COMPANIES AT 31.12.2006
(CONSOB RESOLUTION NO. 11971 OF 14 MAY 1999)
Investment Investor % of voting rights in respect of:
Shareholdings Pledge associated Group
with lending di total (*)
operations
ACROSERVIZI S.p.A. FINECOBANK S.p.A. 10,71 10,71
ADIBA 1981 S.r.l. MCC S.p.A. 50,00 50,00
ADV EQUITY LIMITED BIPOP CARIRE S.p.A. 100,00 100,00
AGENZIA REGIONALE PER GLI INVESTIMENTI
E LO SVILUPPO – SVILUPPO LAZIO S.p.A. CAPITALIA S.p.A. 14,47 14,47
AGITEC – AGENZIA PER L’INNOVAZIONE
TECNOLOGICA S.p.A. IN LIQUID. CAPITALIA S.p.A. 25,00 25,00
AGRIFACTORING S.p.A. IN LIQUID. CAPITALIA S.p.A. 20,00 20,00
AL.GIO.FIN. S.p.A. BIPOP CARIRE S.p.A. 60,00 60,00
ASTRIM S.p.A. CAPITALIA S.p.A. 34,78 34,78
ATB ACCIAIERIA TUBIFICIO DI BRESCIA S.p.A. MCC S.p.A. 50,00 50,00
ATHENA PRIVATE EQUITY S.A. CAPITALIA S.p.A. 23,88 23,88
BANCA DI CREDITO DI TRIESTE S.p.A.
IN LIQ. COATTA AMM.VA BIPOP CARIRE S.p.A. 44,29 44,29
BANCA DI ROMA S.p.A. CAPITALIA S.p.A. 100,00 100,00
BANCA D’ITALIA BANCO DI SICILIA S.p.A. 6,343 11,15
BIPOP CARIRE S.p.A. 0,043
CAPITALIA S.p.A. 4,761
BANCA IMPRESA LAZIO S.p.A. CAPITALIA S.p.A. 18,00 18,00
BANCA UBAE S.p.A. CAPITALIA S.p.A. 10,79 10,79
BANCO DI SICILIA INTERNATIONAL S.A.
IN LIQUID. BANCO DI SICILIA S.p.A. 99,996 100,00
BANCO DI SICILIA S.p.A. CAPITALIA S.p.A. 100,00 100,00
BASICA SOC. PER LO SVIL. DI SISTEMI INF.
COMP. AVANZATI S.p.A. IN LIQUID. CAPITALIA S.p.A. 100,00 100,00
BASINTEL S.p.A. IN LIQUID. BANCO DI SICILIA S.p.A. 75,00 75,00
BDR ROMA PRIMA IRELAND LIMITED CAPITALIA S.p.A. 99,90 99,90
BEMM GEARS S.r.l. IN LIQUID. E
CONCORDATO PREVENTIVO CAPITALIA S.p.A. 40,00 40,00
BIPOP CARIRE S.p.A. CAPITALIA S.p.A. 100,00 100,00
BOX 2004 S.p.A. CAPITALIA S.p.A. 100,00 100,00
C.D.F. CENTRO DIFFUSIONI
FONOGRAFICHE S.r.l. MCC S.p.A. 80,00 80,00
CALA DE MEDICI IMMOBILIARE S.r.l. MCC S.p.A. 100,00 100,00
CAPITALIA ASSET MANAGEMENT p.A.
SOCIETÀ DI GESTIONE DEL RISPARMIO CAPITALIA S.p.A. 100,00 100,00
CAPITALIA ASSICURAZIONI S.p.A. CAPITALIA S.p.A. 49,00 49,00

266 267
Investment Investor % of voting rights in respect of:
Shareholdings Pledge associated Group
with lending di total (*)
operations
CAPITALIA INFORMATICA S.p.A. CAPITALIA S.p.A. 100,00 100,00
CAPITALIA INVESTIMENTI ALTERNATIVI
SOCIETÀ DI GESTIONE DEL RISPARMIO S.p.A. CAPITALIA S.p.A. 95,00 100,00
FINECOBANK S.p.A. 5,00
CAPITALIA INVESTMENT MANAGEMENT S.A.
CAPITALIA
LUXEMBOURG S.A. 99,997 100,00
CAPITALIA S.p.A. 0,003
CAPITALIA LUXEMBOURG S.A. CAPITALIA S.p.A. 99,9999 100,00
MCC S.p.A. 0,0001
CAPITALIA MERCHANT S.p.A. CAPITALIA S.p.A. 100,00 100,00
CAPITALIA PARTECIPAZIONI S.p.A. CAPITALIA S.p.A. 100,00 100,00
CAPITALIA SERVICE J.V. S.r.l. CAPITALIA S.p.A. 51,00 51,00
CAPITALIA – SOFIPA SOCIETÀ DI GESTIONE
DEL RISPARMIO (SGR) S.p.A. CAPITALIA S.p.A. 100,00 100,00
CAPITALIA SOLUTIONS S.p.A. CAPITALIA S.p.A. 100,00 100,00
CASA BIANCA S.p.A. BANCA DI ROMA S.p.A. 100,00 100,00
CASSA DI COMPENSAZIONE E GARANZIA S.p.A. CAPITALIA S.p.A. 13,64 13,64
CENTRALE DEI BILANCI S.r.l. CAPITALIA S.p.A. 12,78 12,78
CINECITTÀ ENTERTAINMENT S.p.A. BANCO DI SICILIA S.p.A. 28,33 28,33
CISIM FOOD S.p.A. IN LIQUID.
CAPITALIA MERCHANT
S.p.A. 45,45 45,45
CNP CAPITALIA VITA S.p.A. CAPITALIA S.p.A. 16,92 38,80
FINECO VERWALTUNG
AG 21,88
CO.CE.ME. SICILIA SCARL ( FALLITA ) BANCO DI SICILIA S.p.A. 25,32 25,32
COFIRI S.p.A. CAPITALIA S.p.A. 100,00 100,00
COLONY SARDEGNA S.A.R.L.
CAPITALIA MERCHANT
S.p.A. 13,22 13,22
COMITOURS S.p.A. BANCA DI ROMA S.p.A. 80,00 80,00
COMMUNICATION VALLEY S.p.A. KYNESTE S.p.A. 100,00 100,00
COMPAGNIA ITALPETROLI S.p.A. BANCA DI ROMA S.p.A. 49,00 49,00
CONSORTIUM S.r.l. CAPITALIA S.p.A. 31,24 31,24
CORIT CONCESSIONARIA RISCOSSIONE
TRIBUTI S.p.A. IN LIQUID. CAPITALIA S.p.A. 60,00 60,00
CORMANO S.r.l. CAPITALIA S.p.A. 18,91 18,91
CORTINA BELLEVUE S.r.l. BANCA DI ROMA S.p.A. 60,00 60,00
DESENZANO 2002 S.r.l. MCC S.p.A. 65,22 65,22
DITTA FEDERICI & IGLIORI PER COSTRUZIONI
EDILIZIE S.p.A. BANCA DI ROMA S.p.A. 21,95 21,95

CAPITALIA
ATTACHMENTS
Investment Investor % of voting rights in respect of:
EDIPASS S.p.A. IN LIQUID.
BASICA S.p.A.
IN LIQUIDAZIONE 10,00 65,00
CAPITALIA S.p.A. 55,00
Shareholdings Pledge associated Group
with lending di total (*)
operations
ENTASI S.r.l. CAPITALIA S.p.A. 100,00 100,00
ENTE FIUGGI S.p.A. BANCA DI ROMA S.p.A. 80,00 80,00
EUROCLASS MULTIMEDIA HOLDING S.A. CAPITALIA S.p.A. 13,56 13,56
EUROFINANCE 2000 S.r.l. CAPITALIA S.p.A. 98,97 98,97
EUROMEZZANINE 2 SCA CAPITALIA S.p.A. 17,39 17,39
EUROPEAN TRUST SOCIETÀ FIDUCIARIA
PER AZIONI CAPITALIA S.p.A. 100,00 100,00
EUROPROGETTI & FINANZA S.p.A. MCC S.p.A. 39,79 39,79
EUROSANITÀ S.p.A.
CAPITALIA
MERCHANT S.p.A. 11,80 11,80
EXECUTIVESURF S.R.L. IN LIQUID.
CAPITALIA
MERCHANT S.p.A. 12,55 12,55
F.R.T. FROSINONE RISCOSSIONE TRIBUTI S.p.A. BANCA DI ROMA S.p.A. 100,00 100,00
FIDIA – FONDO INTERBANCARIO DI
INVESTIMENTO AZIONARIO SGR S.p.A. CAPITALIA S.p.A. 25,00 25,00
FIMOPER S.p.A. BANCA DI ROMA S.p.A. 99,93 99,93
FINECO FINANCE LIMITED CAPITALIA S.p.A. 100,00 100,00
FINECO LEASING S.p.A. CAPITALIA S.p.A. 99,99 99,99
FINECO MUTUI S.p.A. FINECOBANK S.p.A. 100,00 100,00
FINECO VERWALTUNG AG CAPITALIA S.p.A. 100,00 100,00
FINECOBANK S.p.A. CAPITALIA S.p.A. 99,99 99,99
FONDI IMMOBILIARI ITALIANI – SOCIETÀ DI
GESTIONE DEL RISPARMIO S.p.A. CAPITALIA S.p.A. 51,55 51,55
G.F. UNO S.p.A. BANCA DI ROMA S.p.A. 100,00 100,00
G.M.P. S.p.A. MCC S.p.A. 30,00 30,00
GAS OROBICA S.r.l. MCC S.p.A. 100,00 100,00
GE.S.E.T.T.-GESTIONE SERVIZI ESAZIONE TRIBUTI
E TESORERIE S.p.A. IN LIQUID. CAPITALIA S.p.A. 98,45 98,45
G.B.S. GENERAL BROKER SERVICE S.p.A. CAPITALIA S.p.A. 20,00 20,00
ICLA COSTRUZIONI GENERALI BANCA DI ROMA S.p.A. 26,02 26,02
IGM S.p.A. MCC S.p.A. 100,00 100,00
ILTE HOLDING S.p.A. BANCA DI ROMA S.p.A. 100,00 100,00
IMMOBILIARE PIEMONTE S.p.A. MCC S.p.A. 100,00 100,00
IMMOBILIARE SOPROZOO S.p.A. BANCA DI ROMA S.p.A. 10,39 10,39
IMPRESA ARMANDO TORRI S.p.A. BANCA DI ROMA S.p.A. 22,65 22,65
INDUSTRIA LIBRARIA TIPOGRAFICA EDITRICE S.p.A. BANCA DI ROMA S.p.A. 100,00 100,00
INIZIATIVE IMMOBILIARI S.r.l. CAPITALIA S.p.A. 13,87 13,87

268 269
Investment Investor % of voting rights in respect of:
INTERPORTO SUD EUROPA S.p.A. BANCA DI ROMA S.p.A. 23,29 23,29
IPSE 2000 S.p.A. CAPITALIA S.p.A. 50,00001 50,00
IRFIS – MEDIOCREDITO DELLA SICILIA S.p.A. BANCO DI SICILIA S.p.A. 76,26 76,26
ISTITUTO DELLA ENCICLOPEDIA ITALIANA
Shareholdings Pledge associated Group
with lending di total (*)
operations
FONDATA DA GIOVANNI TRECCANI S.p.A. CAPITALIA S.p.A. 12,00 12,00
ISTITUTO PER IL CREDITO SPORTIVO CAPITALIA S.p.A. 10,81 10,81
ISTITUTO PER L’EDILIZIA ECONOMICA
E POPOLARE DI CATANIA S.p.A.
IN LIQUID. BANCO DI SICILIA S.p.A. 20,00 20,00
ISTITUTO PER L’EDILIZIA ECONOMICA
E POPOLARE DI MESSINA S.p.A. BANKRUPTED BANCO DI SICILIA S.p.A. 33,33 33,33
ISTITUTO PER L’EDILIZIA ECONOMICA
E POPOLARE DI PALERMO S.p.A. BANKRUPTED BANCO DI SICILIA S.p.A. 16,67 16,67
KYNESTE S.p.A. CAPITALIA S.p.A. 100,00 100,00
LA GRANDE CUCINA S.p.A.
CAPITALIA
MERCHANT S.p.A. 12,68 12,68
LIMA S.p.A. IN LIQUID. BIPOP CARIRE S.p.A. 15,00 15,00
MARZOLI S.p.A.
CAPITALIA
MERCHANT S.p.A. 15,00 15,00
MCC S.p.A. CAPITALIA S.p.A. 100,00 100,00
MCC – SOFIPA INTERNATIONAL S.A.
IN LIQUID. CAPITALIA S.p.A. 100,00 100,00
MCM HOLDING S.p.A. BANCA DI ROMA S.p.A. 100,00 100,00
MCM MANIFATTURE COTONIERE
MERIDIONALI S.p.A. BANCA DI ROMA S.p.A. 91,47 91,47
MEDIOTRADE S.p.A. IN LIQUID. CAPITALIA S.p.A. 100,00 100,00
MIDA FOR INVESTMENT AND
CONSTRUCTION S.r.l. BANCA DI ROMA S.p.A. 84,00 84,00
MILANO EST S.p.A. CAPITALIA S.p.A. 34,63 34,63
MILARIS S.A. IN LIQUID. SOFIGERE S.A.S. 100,00 100,00
MOI MOSCHELLA S.p.A. BANCA DI ROMA S.p.A. 14,00 14,00
MONTE LUCENTE IMMOBILIARE S.r.l. BANCA DI ROMA S.p.A. 30,00 30,00
NET INSURANCE S.p.A. FINECOBANK S.p.A. 13,04 13,04
NITHER S.p.A. CAPITALIA S.p.A. 100,00 100,00
NUOVA GELA SVILUPPO S.c.p.a
IRFIS – MEDIOCREDITO
DELLA SICILIA S.p.A. 14,00 14,00
NUOVA TEATRO ELISEO S.p.A. CAPITALIA S.p.A. 41,01 41,01
OFI S.p.A. BANCO DI SICILIA S.p.A. 51,18 51,18
PARFIN – SOCIETÀ DI PARTECIPAZIONI
E SERVIZI FIN.RI S.p.A. BANKRUPTED BANCA DI ROMA S.p.A. 12,50 12,75
CAPITALIA S.p.A. 0,25

CAPITALIA
ATTACHMENTS
Investment Investor % of voting rights in respect of:
PAR-TEC S.p.A.
CAPITALIA
Shareholdings Pledge associated Group
with lending di total (*)
operations
MERCHANT S.p.A. 15,00 15,00
PIANIMPIANTI S.p.A. BIPOP CARIRE S.p.A. 15,00 15,00
POLICLINICO CASILINO S.R.L IN LIQUID.
SANITÀ S.R.L.
IN LIQUID. 100,00 100,00
QUANTA S.p.A. AGENZIA PER IL LAVORO
CAPITALIA
MERCHANT S.p.A. 25,00 25,00
REGGIO EMILIA INNOVAZIONE SOC. CONS. A R.L. CAPITALIA S.p.A. 18,60 18,60
REIMMOBILIARE S.p.A. CAPITALIA S.p.A. 100,00 100,00
ROMAFIDES FIDUCIARIA E SERVIZI S.p.A. CAPITALIA S.p.A. 100,00 100,00
ROME AMERICAN HOSPITAL S.p.A. BANCA DI ROMA S.p.A. 50,00 50,00
SANITÀ GESTIONI S.r.l IN LIQUID.
POLICLINICO CASILINO
S.R.L. IN LIQUID. 100,00 100,00
SANITÀ S.r.l. IN LIQUIDAZIONE CAPITALIA S.p.A. 99,60 99,60
SANT’ELISABETTA Sr.l. IN LIQUID.
POLICLINICO CASILINO
S.R.L. IN LIQ. 100,00 100,00
SERIT S.p.A. IN LIQUID. CAPITALIA S.p.A. 100,00 100,00
SETESI-SERVIZI TELEMATICI SICILIANI S.p.A. BANCO DI SICILIA S.p.A. 40,49 40,49
SIMEST S.p.A. SOCIETÀ ITALIANA PER
L’IMPRESE ALL’ESTERO CAPITALIA S.p.A. 11,01 11,01
SOCIETÀ DI GESTIONI ESATT. IN SICILIA
SO.G.E.SI. S.p.A. IN LIQUID. BANCO DI SICILIA S.p.A. 80,00 80,00
SOCIETÀ AMMINISTRAZIONE IMMOBILI
S.A.IM. S.p.A. IN LIQUID. CAPITALIA S.p.A. 60,00 60,00
SO.G.E.D. S.p.A. IN LIQUID. BANCO DI SICILIA S.p.A. 100,00 100,00
SOCIETÀ EDILIZIA PINETO-SEP S.p.A. BANCA DI ROMA S.p.A. 40,00 40,00
SOCIETÀ FIN. PER LO SVILUPPO
E LA VALORIZZAZIONE DELL’ECONOMIA
REGGIANA- SOFISER S.R.L BIPOP CARIRE S.p.A. 10,08 10,08
SOCIETÀ GESTIONE PER IL REALIZZO S.p.A. BANCO DI SICILIA S.p.A. 4,23 20,10
BIPOP CARIRE S.p.A. 0,08
CAPITALIA S.p.A. 15,74
IRFIS – MEDIOCREDITO
DELLA SICILIA S.p.A. 0,05
SOCIETÀ ITALIANA DI MONITORAGGIO S.p.A.
CAPITALIA
MERCHANT S.p.A. 33,33 33,33
SOCIETÀ ITALIANA GESTIONE ED
INCASSO CREDITI S.p.A. CAPITALIA S.p.A. 95,00 100,00
MCC S.p.A. 5,00
SOCIETÀ PER L’INGEGNERIA D’IMPRESA S.R.L CAPITALIA S.p.A. 33,33 33,33
SOFIGERE Société par Actions Simplifièe CAPITALIA S.p.A. 100,00 100,00

270 271
Investment Investor % of voting rights in respect of:
SOVAGRI SOCIETÀ CONSORTILE P.A.
Shareholdings Pledge associated Group
with lending di total (*)
operations
IN LIQUID. CAPITALIA S.p.A. 16,00 16,00
SPAGET S.p.A. IN LIQUID. CAPITALIA S.p.A. 100,00 100,00
SPEED S.p.A.
CAPITALIA
MERCHANT S.p.A. 19,19 19,19
SVILUPPI IMMOBILIARI PARMENSI S.p.A. BANCO DI SICILIA S.p.A. 100,00 100,00
SYNESIS FINANZIARIA S.p.A. BANCA DI ROMA S.p.A. 25,00 25,00
TECNOSERVIZI MOBILI S.r.l. CAPITALIA S.p.A. 49,00 49,00
TERME TAURINE S.p.A. BANCA DI ROMA S.p.A. 24,35 24,35
TESI COSTRUZIONI S.r.l. MCC S.p.A. 65,22 65,22
TODIMO 2000 S.p.A. BANCA DI ROMA S.p.A. 100,00 100,00
TREVI FINANCE N.2 S.p.A. CAPITALIA S.p.A. 60,00 60,00
TREVI FINANCE N.3 S.r.l. CAPITALIA S.p.A. 60,00 60,00
TREVI FINANCE S.p.A. CAPITALIA S.p.A. 60,00 60,00
VETEX S.p.A. BANCA DI ROMA S.p.A. 80,00 80,00
VILLA BIANCA S.p.A. BANCA DI ROMA S.p.A. 56,10 56,10
VINALCOOL S.p.A. BANCA DI ROMA S.p.A. 80,17 80,17
(*) rounded to second decimal point.

CAPITALIA
CHANGES IN THE EQUITY INVESTMENTS OF CAPITALIA S.P.A.
(thousands of euros)
OPENING BALANCE
INCREASES
Number of Nominal Book Purchases Writebacks Revaluations Other
shares/parts value value variations
A B.1 B.2 B.3 B.4
a) banks
1. Listed
–
2. Unlisted
BANCA DI ROMA S.p.A. 2,262,082,921 2,262,082,921.00 5,033,747 – – – –
BANCO DI SICILIA S.,p.A. 697,203,746 697,203,746.00 1,759,137 – – – –
BIPOP CARIRE S.p.A. 449,921,000 899,842,000.00 844,645 – – – –
CAPITALIA LUXEMBOURG S.A. 967,499 119,999,876.02 186,901 – – – –
FINECOBANK S.p.,A. 605,538,048 199,827,555.84 764,712 10 – – 1,151 d)
MCC S.p.A. 74,501,738 372,508,690.00 536,317 350,000 – – 126,490 e)
b) financial companies
1. Listed
–
2. Unlisted
ATHENA PRIVATE EQUITY S.A. 6,114,460 12,228,920.00 32,223 – – – 5,262 f)
BDR ROMA PRIMA IRELAND LIMITED 999 U S D 9,990.00 49,225 – – – 1,012 h)
CAPITALIA ASSET MANAGEMENT S.p.A.
Società di gestione del risparmio 12,000,000 6,240,000.00 482,520 – – – 690 d)
CAPITALIA INVESTIMENTI ALTERNATIVI
Società di Gestione del Risparmio S.p.A. 4,940,000 4,940,000.00 5,642 – – – –
CAPITALIA INVESTMENT MANAGEMENT S.A. 1 25.00 – – – – –
CAPITALIA LEASING & FACTORING S.p.A. 15,569,080 77,845,400.00 127,490 – – – –
CAPITALIA – SOFIPA Società di Gestione
del Risparmio (SGR) S.p.A. – – – – – – 6,688 i)
CAPITALIA MERCHANT S.p.A. – – – 307,002 – – –
CAPITALIA PARTECIPAZIONI S.p.A. – – – 1,250,638 – – –
COFIRI S.p.A. 6,910,151 6,910,151.00 7,717 – – – –
CONSORTIUM S.r.l. 144,344,200 144,344,200.00 188,046 – – – –
CORIT – CONCESSIONARIA RISCOSSIONE TRIBUTI S.p.A.
(in liquidation) 14,448 746,239.20 459 – – – –
ENTASI S.r.l. 10,200 10,200.00 9 – – – –
EUROFINANCE 2000 S.r.l, 2,771,022 27,710,22 23 – – – –
EUROPEAN TRUST Società Fiduciaria per azioni 1,000,000 1,000,000.00 1,454 – – – –
EUROPROGETTI & FINANZA S.p.A. 1,500,000 780,000.00 570 – – – –
FIDIA – FONDO INTERBANCARIO D’INVESTIMENTO
AZIONARIO SGR S.p.A. 7,500 3,900,000.00 2,982 – – – –

272 273
DECREASES
CLOSING BALANCE
Total Sales Writedowns Other Total Number of Nominal Book % Total Total
variations shares/parts value value holding revaluation Writedowns
C.1 C.2 C.3 D E F
– – – 404,536 a) 404,536 2,335,574,720 2,335,574,720.00 q) 4,629,211 100.00 – –
– – – 100,641 b) 100,641 739,328,517 739,328,517.00 q) 1,658,496 100.00 – –
– – – 25,810 c) 25,810 457,921,000 915,842,000.00 q) 818,835 100.00 – –
– – – – – 967,499 119,999,876.02 186,901 99.999 – –
1,161 – – – – 605,545,808 199,830,116.64 765,873 99.99 – 55,294
476,490 – – – – 144,501,738 722,508,690.00 1,012,807 100.00 – –
5,262 – – 9,067 g) 9,067 6,114,460 12,228,920.00 28,418 23,88 – 1,178
1,012 – – – – 999 U S D 9,990.00 50,237 99.90 – –
690 – – – – 12,000,000 6,240,000.00 483,210 100.00 – –
– – – – – 4,940,000 4,940,000.00 5,642 95.00 – –
– – – – – 1 25.00 – 0.003 s) – –
– – – 127,490 m) 127,490 – – – – – –
6,688 – – – – 120,000 6,198,000.00 6,688 100.00 – –
307,002 – – – – 10,000,000 10,000,000.00 307,002 100.00 – –
1,250,638 – – – – 102,550,000 102,550,000.00 1,250,638 100.00 – –
– – – – – 6,910,151 6,910,151.00 7,717 100.00 – –
– – 18,651 166,159 t) 184,810 2,696,680 2,696,680.00 3,236 31.24 – 18,651
– – – – – 14,448 746,239.20 459 60.00 – 2,958
– – – – – 10,200 10,200.00 9 100.00 – 3
– – – – – 2,771,022 27,710.22 23 98.97 – 128
– – – – – 1,000,000 1,000,000.00 1,454 100.00 – –
– 534 36 – 570 – – – –
– – 276 – 276 5,500 2,860,000.00 r) 2,706 25.00 – 1,168

CAPITALIA
ALLEGATI
CHANGES IN THE EQUITY INVESTMENTS OF CAPITALIA S.P.A.
(thousands of euros)
OPENING BALANCE
INCREASES
DENOMINAZIONE Number of Nominal Book Purchases Writebacks Revaluations Other
shares/parts value value variations
A B.1 B.2 B.3 B.4
FINECO FINANCE Limited 1,000,000 1,000,000.00 280,025 – – – –
FINECO LEASING S.p.A. 12,199,283 62,948,300.28 214,818 – – – 251 d)
FINECO VERWALTUNG AG 36,270,000 36,270,000.00 96,652 – – – –
FONDI IMMOBILIARI ITALIANI Società di Gestione
del Risparmio S.p.A. 55,650 2,873,766.00 61,092 – – – –
GE.S.E.T.T. – Gestione Servizi Esazione Tributi e
Tesorerie S.p.A. (in liquidation) 24,737 127,642.92 127 – – – –
MCC – SOFIPA INTERNATIONAL S.A. (in liquidation) – – – – – – 1,070 i)
ROMAFIDES – Fiduciaria e Servizi S.p.A. 600,000 600,000.00 1,301 – – – –
SCONTOFIN S.A. 1,000 516,500.00 – – – – 2,200 l)
SERIT S.p.A. (in liquidation) 2,000 1,000,000.00 329 – – – –
Società Esattorie Meridionali S.E.M. S.p.A. 599,942 3,095,700.72 4,265 – – – –
SPAGET S.p.A (in liquidation) 3.042 1,571,040.90 1,004 – – – –
TREVI FINANCE S.p.A. 120 61,920.00 59 – – – –
TREVI FINANCE N. 2 S.p.A. 120 60,000.00 63 – – – –
TREVI FINANCE N. 3 S.r.l. 6,000 6,000.00 7 – – – –
c) other
1. listed
–
2. unlisted
Agenzia per l’innovazione Tecnologica –
AGITEC S.p.A. (in liquidazione) (i) – – – – – – –
BASICA – Soc. per lo Sviluppo di Sist. Informativi
Computeriz. Avanzati S.p.A (in liquidation) 100,000 516,000.00 – – – – –
BERNINI IMMOBILIARE S.r.l. 240,000 240,000.00 2,167 – – – –
BOX 2004 Società per Azioni 4,682,000 4,682,000.00 9,066 – – – –
B.S.H. – BRUN SERVICE HOLDING S.p.A.
(in liquidation) (u) 253,085 253,085.00 – – – – –
CAPITALIA ASSICURAZIONI S.p.A. 5,200,000 5,200,000.00 8,117 – – – 51,860 v)
CAPITALIA INFORMATICA S.p.A. 120,000 120,000.00 84,986 – – – –
CAPITALIA SERVICE J.V. S.r.l. 765,000 765,000.00 789 – – – –
CAPITALIA SOLUTIONS S.p.A. 2,300,000 2,300,000.00 3,122 – – – 5,987 p)
CNP CAPITALIA VITA S.p.A. 30,166,420 15,686,538.40 119,882 – – – 178 d)
EDIPASS S.p.A. (in liquidation) 55,000 283,800.00 – – – – –
G.B.S. General Broker Service S.p.A. 100,000 52,000.00 52 – – – –

274 275
DECREASES
CLOSING BALANCE
Total Sales Writedowns Other Total Number of Nominal Book % Total Total
variations shares/parts value value holding revaluation Writedowns
C.1 C.2 C.3 D E F
– – – – – 1,000,000 1,000,000.00 280,025 100.00 – –
251 – – – – 12,199,283 62,948,300.28 215,069 99.99 – –
– – – – – 36,270,000 36,270,000.00 96,652 100.00 – –
– – – – – 55,650 2,873,766.00 61,092 51.55 – –
– – – – – 24,737 127,642.92 127 98.45 – 6,924
1,070 – – – – 600,000 1,000,000.00 1,070 100.00 – –
– – – – – 600,000 600,000.00 1,301 100.00 – 118
2,200 2,200 – – 2,200 – – – – – –
– – – – – 2,000 1,000,000.00 329 100.00 – 177
– – 385 3,880 n) 4,265 – – – – – –
– – – – – 3,042 1,571,040.90 1,004 100.00 – 389
– – – – – 120 61,920.00 59 60.00 – 6
– – – – – 120 60,000.00 63 60.00 – –
– – – – – 6,000 6,000.00 7 60.00 – –
– – – – – 25,800 258,000.00 – 25.00 – –
– – – – – 100,000 516,000.00 – 100.00 – 18,895
– 2,052 – 115 o) 2,167 – – – – – –
– – – – – 4,682,000 4,682,000.00 9,066 100.00 – 16,631
– – – – – – – – – – –
51,860 56,000 – – 56,000 2,548,000 2,548,000.00 3,977 49.00 – –
– – – – – 120,000 120,000.00 84,986 100.00 – –
– – – – – 765,000 765,000.00 789 51.00 – –
5,987 – – – – 2,300,000 2,300,000.00 9,109 100.00 – 591
178 – – – – 30,166,420 15,686,538.40 120,060 16.92 z) – –
– – – – – 55,000 283,800.00 – 55.00 – 327
– – – – – 100,000 52,000.00 52 20.00 – –

CAPITALIA
ALLEGATI
CHANGES IN THE EQUITY INVESTMENTS OF CAPITALIA S.P.A.
(thousands of euros)
OPENING BALANCE
INCREASES
Number of Nominal Book Purchases Writebacks Revaluations Other
shares/parts value value variations
A B.1 B.2 B.3 B.4
IPSE 2000 S.p.A. – – – 17.620 – – 3 d)
KYNESTE S.p.A. 641,247 6,412,470.00 24,774 – – – –
MEDIOTRADE S.p.A. (in liquidation) – – – – – – 547 i)
MILANO EST S.p.A. 257,130 3,599,820.00 4,796 – – – –
NITHER S.p.A. 5,000,000 5,000,000.00 21,166 – – – –
NUOVA TEATRO ELISEO S.p.A. 752,296 594,313.84 492 – – – –
REIMMOBILIARE S.p.A. 1,000,000 1,000,000.00 10,241 – – – –
SANITÀ S.r.l. (in liquidation) 5,143,876 5,143,876.00 – – – – –
SOCIETÀ AMMINISTRAZIONE IMMOBILI S.A.IM. S.p.A.
(in liquidation) 300,000 300,000.00 54 – – – –
SOCIETÀ GESTIONE PER IL REALIZZO S.p.A. 4,524,353 452,435.30 2,334 – – – 61 i)
SOCIETÀ ITALIANA GESTIONE ED INCASSO CREDITI S.p.A. 988,000 988,000.00 981 – – – –
SOCIETÀ PER L’INGEGNERIA D’IMPRESA S.r.l. 12,500,000 6,375,000.00 6,456 – – – –
SOFIGERE Société par Actions Simplifièe 40 40,000.00 40 – – – –
TECNOSERVIZI MOBILI S.r.l. – – – – – – 51 i)
Total 10,983,076 1,925,270 – – 203,501
(a) Partial demerger of purchasing operations to Capitalia Solutions (4,536) and demerger of real estate holdings to Capitalia S.p.A. (400,000)
(b) Partial demerger of purchasing operations to Capitalia Solutions (641) and demerger of real estate holdings to Capitalia S.p.A. (100,000)
(c) Partial demerger of purchasing operations to Capitalia Solutions (810) and demerger of real estate holdings to Capitalia S.p.A. (25,000)
(d) Incidental expenses
(e) Merger of Capitalia Leasing & Factoring S.p.A.
(f) Payment in sahre capital
(g) Repayment of share capital
(h) Exchange rate difference
(i) Company formed after partial unproportional demerger of MCC to Capitalia S.p.A.
(l) Gain on sale
(m) Partial demerger of real estate holdings to Capitalia S.p.A. (1,000) and merger into MCC (126,490)
(n) Transfert to “Non current assets and groups of assets being divested” (3,394) and Share Capital (486).
(o) loss on disposal
(p) Partial demerger of Banca di Roma S.p.A., Banco di Sicilia S.p.A. and Bipop Carire S.p.A.
(q) aumento del capitale sociale mediante utilizzo di riserve
(r) Lowering of share capital
(s) Capitalia Luxembourg SA holds 99,997%
(t) Share capital repayment (141.648) and distribution of share premium account (24.511)
(u) Cancellation from Registry of firms
(v) incidental expenses (223); gain on sale (51,637)
(z) A further 21.88% is held by Fineco Verwaltuing AG
(y) A further 4,36 is held by group companies

276 277
DECREASES
CLOSING BALANCE
Total Sales Writedowns Other Total Number of Nominal Book % Total Total
variations shares/parts value value holding revaluation Writedowns
C.1 C.2 C.3 D E F
17.623 – 12.272 – 12.272 6.250.001 6.250.001.00 5.351 50,00001 – 12.272
– – – – – 641,247 6,412,470.00 24,774 100.00 – –
547 – – – – 100,000 1,000,000.00 547 100.00 – –
– – 2,686 – 2,686 150,768 2,110,752.00 r) 2,110 34.63 – 21,192
– – 358 – 358 5,000,000 5,000,000.00 20,808 100.00 – 21,287
– – – – – 752,296 594,313.84 492 41.01 – 1,969
– – 3,647 – 3,647 1,000,000 1,000,000.00 6,594 100.00 – 3,647
– – – – – 5,143,876 5,143,876.00 – 99.60 – 4,990
– – – – – 300,000 300,000.00 54 60.00 – 8
61 – – – – 4,638,265 463,826.50 2,395 15.74 y) – –
– – – – – 988,000 988,000.00 981 95.00 – –
– – 4,393 – 4,393 2,062,958 2,062,958.00 r) 2,063 33.33 – 4,393
– – – – – 40 40,000.00 40 100.00 – –
51 – – – – 24.500 12.740.00 51 49.00 – –
2,128,771 60,786 42,704 837,698 941,188 12,170,659 – 193,196

REPORT OF THE INDEPENDENT AUDITORS

280 281

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